
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: 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

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.

Perfect market timing is difficult to pull off, but excellent preparation and building a valuable business in the first place is much more under your control. Private equity firms are actively seeking high-quality franchise businesses, so it's crucial to have a solid plan in place. Avoid vague improvement ideas and instead, document your strategy, assign accountability, and execute it flawlessly.

All Things Considered Podcast - Private Equity's Impact on Franchising

Mastermind Minutes Interview - PE's Impact on Franchising

It is usually a good sign when PE invests at the outlet level - because it signals unit level economics are attractive. But what happens when PE investors later become the majority of franchisees in a system? How do relationship dynamics change? Are franchisor management teams (even brands PE-backed themselves) prepared?

How has private equity changed due diligence for prospective franchisees? Listen to my interview with Franchise Times Editor-in-Chief Laura Michaels to kick off the FT Investment Show.

With the $30M sale of Smokey Bones to FAT Brands, Sun Capital Partners has exited franchising. Sun Capital acquired Smokey Bones for $80M in 2007 from Darden Restaurants, and used to be a prolific franchise and restaurant investor. It had notable successes, but also a string of restaurant bankruptcies on its watch.
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PE Profit Ladder® Market Watch Newsletter
PRIVATE EQUITY’S IMPACT ON FRANCHISING
EMERGING BRANDS
TRENDS
BUILDING SMART
PROSPECTIVE FRANCHISEES
TURNAROUNDS & CASE STUDIES