PE Profit Ladder Articles
PE Profit Ladder Market Watch Newsletter: Roark-Backed ServiceMaster Teams with Ace Hardware
Mark Twain is reported to have said, "During a gold rush, its a good time to be in the pick and shovel business." Home services is probably the biggest gold rush in US franchising at the moment. This week Roark-backed ServiceMaster announced that it struck a multi-year agreement with Ace Hardware. ServiceMaster franchisees can now buy equipment and supplies through Ace. This one is interesting because Ace outlets are locally owned and the company itself is a cooperative. Ace has made acquisitions including the Handyman Matters franchise in 2019 and a portfolio of HVAC companies in 2023. There is also private equity activity at the unit level. For example, JPB Partners owns a number of stores and consolidated additional units last year. Could this be a "try before you buy" opportunity for the Ace co-op to see what it's like to work with Roark? Will this prompt other home services franchise platforms to get more aggressive around supply chain initiatives? #bigmoneyinfranchising #franchising #privateequity
PE Profit Ladder Market Watch Newsletter: Two Roark-Backed Fitness Giants Plan to Merge
Orangetheory and Self Esteem Brands - both already backed by Roark Capital - announced their intent to merge. Once the deal closes, this will create one of the largest fitness and wellness platforms, with a combined $3.5 billion in systemwide sales, and 7,000 locations across 50 countries. It is a potential set-up to take the larger platform public, possibly in 2025. #bigmoneyinfranchising #franchising #privateequity #mergersandacquisitions #peprofitladder
Future of Franchising - McDonald Hopkins
This panel discussion talks about the future of franchising and current trends, including legal aspects related to third party sellers, joint employer, lender and underwriting guidelines, the impact of private equity and other topics. The panel also talks about which sectors of franchising are growing fastest and what franchise candidates are looking for. The webinar includes a detailed transcript. Registration on the McDonald Hopkins site is required to view the webinar.
Pizza Night Looks Like A Pile of Cash: How PE Discovered Franchising
Franchising came of age before private equity even existed as an industry. But eventually a confluence of factors conspired to make franchising suddenly both attractive and visible to PE dealmakers looking for new ideas. The following is an excerpt from the upcoming book, Big Money in Franchising: Scaling Your Enterprise in the Era of Private Equity #bigmoneyinfranchising #franchising #privateequity #peprofitladder
PE Profit Ladder Market Watch Newsletter: Largest franchisee in the world seeks majority exit? No, it's just the 6th recap.
A great example of the PE Profit Ladder to accelerate growth. Although the press initially hinted that Flynn Group was for sale, in reality this is just a recap (the 6th)...and happens to be an excellent example of the PE Profit Ladder. Goldman Sachs Capital Parters invested from 2001-2005, Weston Presidio 2005-2011. GS returned in 2011 to invest again. The Ontario Teachers Pension Plan and Main Post along with management invested in 2014. After ten years it is time to return some funds to pension investors (OTPP and MP may roll some forward). Direct investing by pension funds and sovereign wealth funds grew 16% per year from 2009 to 2017 according to Boston Consulting Group. OTPP's good outcome here will likely inspire more direct investment in the franchise sector. But given the deal backlog we'll also see more LPs and direct investors pushing for good exits like we're seeing here with Flynn....hold times have extended and there is a bit of a backlog. This is not an exit and the management team is staying in place The existing investors are exiting and new investors are coming in. #peprofitladder #qsr #franchising #privateequity
PE Profit Ladder Market Watch Newsletter: Camp Bow Wow Acquired by PE-Backed Propelled Brands
When franchise brands sell to non-franchise strategics they often tumble back out (in a fairly predictable way) if/when the strategic's priorities change, especially if franchising is outside their core business model. Camp Bow Wow was acquired by pet hospital chain VCA back July 2014 when CBW had 152 locations...today CBW has around 230. Coming back into the franchise family and especially into a multi-brand platform will likely be very positive for this great brand! Dogtopia in particular likely benefitted from a 10 year run where CBW had 52% unit expansion under VCA while Dogtopia enjoyed 800% unit expansion during the same period. Does Dogtopia have a history of private equity support? You bet. At both the brand and multi-unit owner level. #bigmoneyinfranchising #privateequity #franchising
Big Money in Franchising Is #1 New Release on Amazon
Big Money in Franchising: Scaling Your Enterprise in the Era of Private Equity achieved the distinction of being the #1 New Release hardcover title in the Business Franchise category on Amazon, while still in pre-order. The book will be available March 12, 2024. #bigmoneyinfranchising #franchising #privateequity #peprofitladder
Crowded Field, Consolidation, Proactive PE Owners Among 2024 Franchise Trends
In the franchise sector we have much to be optimistic about heading into 2024. There are also clear opportunities: franchise sales & private equity's impact on franchising.
PE Profit Ladder Market Watch Newsletter: Carve Outs, Private Equity & Franchising
I expect to see more carveouts in 2024 as private equity firms selectively prune portfolios and look to return at least some capital to investors. Recent example - Empower Brands (backed by MidOcean Partners) sold Intelligent Office (first acquired in 2019) to United Franchise Group. #peprofitladder #mergersandacquisitions #privateequity
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PRIVATE EQUITY’S IMPACT ON FRANCHISING
EMERGING BRANDS
TRENDS
BUILDING SMART
PROSPECTIVE FRANCHISEES
TURNAROUNDS & CASE STUDIES