Prime Time for Franchising: Private Equity Climbs on Board
Big money, in the form of private equity, is finding a home in franchising, and bringing big promise to area developers and multi-unit operators-and to franchisors and franchise executives as well. For franchisees, it means a chance to build out an area more rapidly, or to expand geographically. For franchisors, especially new or smaller ones, it offers a way to grow their brand faster than through just bank loans and new franchise sales. And for franchise executives seeking bigger challenges (or salaries), it means expanded job opportunities as demand for their skills increases.
Lois Marshall, president of franchise executive recruitment firm the Marshall Group, has been kept busy lately by investment firms seeking to hire top-level managers with franchise and operational expertise to complement the financial and business expertise the equity firms provide.
Marshall, who has been observing the franchise industry for nearly 35 years, says some of the largest, most prestigious private equity firms are taking a new look at franchising-and not as short-term investments to strip and flip, but as investments to build over five to seven years. After that, the brand could be sold, retained as an annuity-type investment, taken public, or be subject to some other liquidity event. |
Deferred Annuity
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