Identify the perfect franchise for you! Take our short quiz Find your franchise match!
Identify the perfect franchise for you! Take our short quiz Find your franchise match!

Should Franchisors Consider Private Equity Investments?

Private equity investors have grown comfortable with the predictable cash flow and exciting growth opportunities in franchising. Today many franchise companies exploring financing alternatives are looking to private equity firms for growth capital, cash for buy-out’s, or liquidity for shareholders and management. Forming an equity partner relationship can have a dramatic impact on the long-term potential of a business.

How can you be sure it’s the right choice for you? We asked Glen Kaufman, Managing Director at American Securities, a private equity firm with a consistent track record in the industry. The middle-market firm invests in companies with revenues ranging from $100 million to $1 billion.

Q: What should you expect from the franchise/private equity investor relationship? 

Kaufman: You ought to expect a partner who understands your company and its culture, is supportive of the management team and its position, understands how to deliver value without infringing on management’s role, and is oriented towards the long-term successful building of your enterprise. The capital that a firm will bring is necessary, but what you really ought to be focused on are those other elements.

Q: How can you find the right equity partner?

Kaufman: There is no shortage of equity partners. You can seek equity capital directly through your relationships with law firms and accounting firms who will generally know the sources of equity capital. You can also retain an intermediary, a broker, or an investment banking firm that will connect you with potential providers of capital. Your job during the process is to effectively communicate your story and your vision in a candid way so that you ultimately get the right match.

Q: What can you do to make it succeed? 

Kaufman: The key to success as in all relationships is picking the right partner that matches your style, culture, and goals. Then nurture the relationship from the earliest stages. Avoid doing negative things like portraying yourself differently than you are, over-promising, or developing an attitude that does not promote constructive dialog such as blocking the other party from the discussion.

Q: When is the right time to begin the process?

Kaufman: People want capital for many reasons. Whatever your reason, the right time to raise capital is before you need it. You never want to be in a situation where you need to do anything in business. You want to act to raise capital when you feel no pressure to have that capital.

Contact info: Glenn Kaufman, Managing Director American Securities (212) 476-8029 www.american-securities.com

We'll Leave the Light On For You: Motel 6's Advertising Success

When Motel 6 conceived of the idea for a campaign in the mid-1980s, Bodett worked on NPR’s All Things Considered program. The Richards Group, a Dallas- based advertising agency, was hired by Motel 6 in 1985 and thought Bodett would be an excellent spokesman for the chain because of his warm and friendly vocal style. Hired in 1986, Bodett ad-libbed the line, “We’ll leave the light on for you”while in the recording studio for the first time and the slogan was both an instant and lasting success, staying with the chain for over 25 years and counting.

Look Out, Overhead: The Advantages of Buying an Online Franchise

Another advantage of an online franchise is that the ‘online shop’ is effectively open all day; revenue can be generated 24 hours a day, seven days a week.Also, an internet-based business is accessible by anyone, anywhere, reaching customers around the globe. Unlike conventional franchises, online businesses aren’t restricted by physical location or traditional hours of operation.

Chronic Tacos Serves Up New Bold Menu

“We take great pride in satisfying our customers in every which way and we’re thrilled to be able to apply what we learned from our guests to create an upgraded menu and offerings,” said Michael Mohammed, CEO of Chronic Tacos. “Not only will the new menu provide fresh and flavorful dish items, but we’ve also remodeled the layout to make ordering more efficient and improve the speed of service. We know when people come to Chronic Tacos, they expect delicious food at a reasonable price and quick pace, and that’s exactly what these modifications will bring!”