PRIVATE EQUITY INVESTING
In Franchise Companies
Tue, Jun 16 @ 8:00 am - 5:00 pm
Fast Growth Start-ups, or Fixer-Uppers? Navigating Extremes
In Franchise Investing
Private Equity Investing in Franchise Companies
Private equity investors face complex choices nowadays when they study deals in the franchise industry.
- Buying company-owned vs. franchises
- Buying franchisors vs. franchisees
- Buying multi-concept franchises or single concept
- Buying off-the-shelf technology or bespoke tech that’s been developed in-house
Growth strategies are also varied. Look at start-up fitness chain F45. It commanded a >20x ebitda multiple when singer-actor Mark Wahlberg and his colleagues bought their stake, thanks to factors like a millennial-friendly business model and strong growth prospects.
On the other hand, look at an old-school company with a defining theme like Hooters, whose concept these days feels decidedly dated. The company was bought by Nord Bay Capital and TriArtisan Capital Advisors, whose premise was that they could transform Hooters by expanding its “Hoots” model to appeal to both genders and use different uniform requirements.
Now look again at F45. More conservative investors might have called the 20x multiple paid by Wahlberg’s group outrageous. But that price grabbed the deal out of the hands of every other buyer, including Blackstone, which is hardly known for throwing money down rabbit holes.
So what did Wahlberg’s group see that other investors didn’t?? Look closely—consider all that F45 had going for it —
- Millennial friendly format — especially a female millennial friendly format — that taps into that generation’s desire to connect “in real life” with DJs and events outside the gym
- Human coaches — who meld technology on video monitors when they demonstrate each move, and correct any misalignments in real time
- Smart use of celebrity and social media marketing. As company founder Rob Deutsch told Fast Company magazine, “What’s been really powerful for us is that we’ve actually had professional athletes and sports people—and now Mark Wahlberg—pays us (!) to be associated with our brand as opposed to, in ordinary circumstances, expecting to be paid to endorse our brand .”
- International potential — classes are already offered in 40 countries!
- A strong blog-centered communication strategy targeting the franchisees. A recent post offers tips on how to do more with digital. It offers goal-setting franchise-by-franchise goal setting.
- The model combines convenience and speed, clean online booking, and IT systems with the right info
- Last but not least, it’s a true growth play. Last July 2019, F45 signed 84 studios in just a single month!!
Maggie Todd Prager
Bregal Partners LP
Tuesday, June 16, 2020
8:00am – 5:00pm
Midtown Manhattan, NY
Three Key Reasons Why You Should Join Us
- Explore the key criteria to keep in mind when considering a growth franchise investment versus a “re-tool”
- Understand the current landscape for franchise investing, including declining real estate costs, high valuations, and the industry’s recession resistant characteristics
- Hear which sectors are in favor, out-of-favor, and up and coming
- How franchises fit into the era of high-growth, sometimes money-losing, millennial friendly businesses
- What kinds of franchises are best suited to generate foot traffic in the stay-at-home age
- For more mature concepts, how to rationalize expenses, lower churn rate, and modernize offerings
- For startup plays, how to sell new franchises and grow internationally
- How top investors are addressing the issue of rising labor costs
- The outlook for sectors including restaurants, health and beauty, education, auto parts, and home maintenance
- Whether to use off-the-shelf tech solutions or build them internally
- The technology that’s most important, from easy to use customer-facing systems to back-office data collection that enables viewing of unit by unit PNL
- The importance of strong communication with your franchisees to keep them motivated
- How to tailor your data collection and marketing strategies for the social media age
- The regulatory issues, including accounting changes, that are top of mind for franchise investors
- Where multiples are headed
- How franchises may fare in an economic slowdown
- Whether multi-concept platform investments are succeeding
Recent Middle-Market Franchise Deals
- General Atlantic acquired European Wax Center, Inc. a leading beauty lifestyle brand franchise from Brazos Private Equity Partners.
- Brentwood Associates acquired a majority interest in Atlanta-based Chicken Salad Chick restaurant franchise parent company SSRG Holdings from Eagle Merchant Partners.
- Roark Capital Group-sponsored multi-concept group Inspire Brands agreed to acquire Jimmy John’s Sandwiches.
- Carrolton, Texas-based FASTSIGNS International Inc., a sign and graphics franchise backed by Freeman Spogli and Lightbay Capital, did an add-on of Sign Me Up Signs & Advertising.
- Bloomfield Hills, Mich.-based Alline Salon Group, backed by Vision Growth Partners, acquired 133 salon locations from Regis Corp.
- Nothing Bundt Cakes, a portfolio company of Levine Leichtman Capital Partners, acquired six NBC franchisee bakeries in the San Diego market.
- ICV Partners agreed to purchase Diversified Restaurant Holdings Inc., one of the largest franchisees for Buffalo Wild Wings with 64 sports bars across five states, for about $130 million.
- Atticus Franchise Group, a private equity firm that already owned multiple Massage Envy franchises, acquired 18 more Massage Envy locations in Colarado from Novarus Capital Group.
Maggie Prager is a director of Bregal Partners. Her investment focus primarily targets consumer products and services, multi-unit and business and information services. Mrs. Prager currently helps oversee the firm’s investment in Ju-Ju-Be International, a leading lifestyle brand in the juvenile products industry, and provider of premium diaper bags, backpacks, and accessories.
Before she joined Bregal Partners, Mrs. Prager was a principal at TZP Group, where she originated and led investments in the consumer products and services, multi-unit and business services industries. Before that, Mrs. Prager was an associate at Summit Partners, where she focused on consumer, education, and tech-enabled businesses. She started her career at J.P. Morgan as an investment banking analyst in the mergers and acquisitions group.
She earned an AB in Economics with certificates in finance and theater at Princeton University, and an MBA from Kellogg School of Management at Northwestern University.
This Capital Roundtable conference in midtown, New York City, is all-business, all-targeted, all-designed to be a completely focused day of practical information and revealing insights about franchise companies. You’ll gain valuable insights from —
- Three informative panel discussions
- Two revealing keynote presentations
- Real-world perspectives from company investors
- Industry outlooks from noted sector experts
- War stories and lessons learned from experienced hands
- Maggie Todd Prager, Director, Bregal Partners LP
- Burt Alimansky, Chairman & CEO, The Capital Roundtable
Preliminary Speaker List
7:30am – 8:30am
Networking & Registration & Breakfast
8:30am – 9:00am
Welcoming Remarks & Audience Self-Introductions
9:00am – 9:30am
Conference Chair’s Introduction —
- Maggie Prager, Bregal Partners
9:30am – 10:30am
First Panel —
10:30am – 11:15am
Networking & Coffee
11:15am – 12:00pm
Morning Conversation —
12:00pm – 12:30pm
Morning Keynote — TBA
12:30pm – 1:30pm
Networking & Luncheon
1:30pm – 2:30pm
Second Panel —
2:30pm – 2:45pm
Networking & Dessert
2:45pm – 3:30pm
Afternoon Conversation —
3:30pm – 4:30pm
Third Panel —
Networking & Adjournment
Space at this conference is limited, so register as soon as possible to assure yourself a seat. To avoid disappointment, please contact Chris Agar today to confirm your attendance at 212-832-7300 ext. 0 or email@example.com.
Please note that Capital Roundtable limits the number of registrants from a single firm to three.
Best Rate – Early Registration
Save $300 off the standard fee of $1,495 when you register by Friday, April 24. Just $1,195.
Save $200 of the standard fee! Register by Friday, May 15, and the fee for the conference is $1,295.
$1,495 increasing to $1,595 day of conference, space permitting.
$1095 each until Friday, May 15, when you register two or more people to attend from the same company. This rate increases to $1295 each after Friday, May 15.
You can pay by credit card (using the links above or below) or by check. Mail your check and business card to: New York Business Roundtable Inc., 747 Third Avenue, Suite 200, New York, NY 10017.
Can’t attend but want to hear the program? You can buy the audio package along with the handounts.
This event is sponsored by:
BKBR Growth Capital
Bradley Arant Boult Cummings
Brightwood Capital Advisors
Cassels Brock & Blackwell
Centre Partners Management
Davis Wright Tremaine
Ernst & Young Capital Advisors
Faegre Baker Daniels
Franchise Business Review
Franchise Growth Solutions
Franchise Performance Group
Gray Plant Mooty
International Franchise Association
Liberty Mutual Group Inc.
NRD Capital Management
New Harbor Capital
Oak Hill Capital Partners
OMERS Private Equity
Palladium Equity Partners
Peak Franchise Capital
Plave Koch PLC
Saltz Family Office
Starboard Capital Partners
Stonington Capital Advisors
Sentinel Capital Partners
Texas Capital Bank NA
The Riverside Company
Trilantic Capital Partners
ZT Private Equity