Atomic Wings’ Post

Interesting article on the franchise M&A outlook for the second half of 2024 -- at least for those of us who find franchise and M&A trends interesting! While this might be true on a broader scale, we're still seeing M&A deals as a result of franchisors offloading underperforming units, seasoned franchisees looking to retire and sell off their options for additional territories, and a variety of other circumstances that exist regardless of interest rates and the market. With the PE interest franchise brands are getting right now, its hard to imagine franchise M&A will go anywhere in the coming years. https://lnkd.in/eMihjPSP

Co-op has sealed a major franchise deal with EG Group's 'On the Move' convenience stores. This strategic partnership will see Co-op products available in more locations, offering greater convenience to customers across the UK. The collaboration aims to bring Co-op's high-quality products to 35 EG Group sites initially, with plans for further expansion. This move not only enhances Co-op's presence but also strengthens EG Group's retail offering, creating a win-win situation for both brands and their customers. Read about how this deal marks a significant step in Co-op's growth strategy and what it means for the future of convenience retail. 🔔Subscribe to the UK's leading franchise news platform here: https://lnkd.in/eBbdRfKE 📚Read the full article here: https://lnkd.in/ebvqPQHm Jerome Saint-Marc, Co-op, Scott English  #FranchiseNews #Coop #EGGroup #RetailInnovation #EliteFranchiseMagazine

In 2024, the franchise industry is set to witness a remarkable surge, with projections from the International Franchise Association indicating a substantial increase of at least 15,000 establishments. 📈 This growth trajectory propels the total number of franchise units to an impressive 821,000 in the U.S. 🚀 Welcome to the definitive guide on franchise digital marketing, where we unravel the strategies to thrive in the fast-growing franchising landscape. https://lnkd.in/eTzNckwb

Appetite for growth: navigating franchise administration 🌮 In restructuring news, the UK's largest Taco Bell franchise, despite positive EBITDA, has been acquired out of administration by Karali Group. This follows a period of rapid debt-fuelled expansion, which ultimately led to liquidity challenges for the group. 📉 I found the case significant in that it demonstrates the need for robust financial planning in franchise models and shows the potential for pre-pack administrations to salvage value and protect employment. Begbies Traynor Group and FRP Advisory oversaw the pre-pack sale of 46 restaurants, preserving 600 jobs. It's a case that highlights the pressures facing UK businesses in the current climate, even those demonstrating profitability. 💼 #restructuring #insolvency #strategiccommunications #foodindustry 

🌍 The Role of the World Franchise Council in the Franchise Sector 🌟 In the ever-evolving landscape of global franchising, the World Franchise Council (WFC) stands as a pivotal force driving the growth and integrity of the industry. As an international federation of national franchise associations, the WFC plays a crucial role in fostering collaboration, setting high standards, and promoting best practices worldwide. 🔹 Fostering Collaboration: By uniting franchise associations from various countries, the WFC creates a platform for sharing knowledge and expertise. This collaboration helps franchise businesses navigate different markets and cultural nuances, leading to more successful and sustainable operations. 🔹 Setting Standards: The WFC establishes guidelines and ethical standards that member associations and their franchises adhere to. This ensures a level playing field and helps maintain the credibility and trust of the franchise model globally. 🔹 Promoting Best Practices: Through bi annual meetings, the WFC disseminates valuable insights and experiences. This knowledge transfer empowers local associations to help franchisors and franchisees to innovate, adapt, and thrive in their respective markets. As the franchise sector continues to expand, the WFC's role becomes increasingly vital. By fostering a collaborative, ethical, and innovative franchise community, the WFC is shaping the future of franchising and paving the way for countless business opportunities worldwide. To find out how this work can help you contact your National Franchise Association. #Franchising #GlobalBusiness #WorldFranchiseCouncil #BusinessGrowth #FranchiseSuccess #InternationalTrade #WFC 🔗 [Learn more about the World Franchise Council](https://lnkd.in/e98yfyyf)

I find it incredibly inconceivable that I Heart Mac & Cheese and More Corporate counsel Kevin Ayers says these are “technical reporting violations.” The attorney responsible for updating, maintaining, and issuing every I Heart Mac and Cheese FDD after 2018 says these are “technical violations.” It seems entirely clear to me that it was and remains his job to ensure that Franchisees were properly disclosed with an accurate disclosure document. How is it possible that Ayers was unaware of the omitted lawsuits? Not aware of the business experience of the individuals listed in Item 2? Not aware of not just one but TWO evictions of the same corporate location Erroneously reporting (for two years in a row) a franchisee lawsuit as SETTLED in August 2021 when it is very much still ONGOING. This situation is not just a matter of negligence, deception, and untruths. It has the potential to be seen as intentional fraud. This is a serious issue that requires immediate attention and action from everyone involved at corporate and their lawyers. The California Department of Financial Protection and Innovation (DFPI) seems to think so, and executed a Consent Order alleging such. AAFD Federal Trade Commission Kelly Spann Keith Miller Patrick Findaro 🗽✅ Jonathan Maze #Franchise #Franchising #IFA https://lnkd.in/eXp8aDUC

Buca di Beppo Files for Chapter 11 As a franchise attorney focused on the restaurant industry, Buca di Beppo's move to file for Chapter 11 bankruptcy comes as no shock. This is the latest in a troubling series of bankruptcies that signal deeper issues within the restaurant franchise sector. Key Facts: - Closed Locations: 13 out of 57 locations shut down, leaving just 44. - Financial Strain: Assets and liabilities between $10M and $50M. - Sales Dip: A 5% drop in sales this year alone. But Buca di Beppo is not alone. The entire sector is grappling with: - Post-COVID Recovery: Many are still reeling from the pandemic. - Rising Costs: Labor and supply costs are squeezing margins. - Consumer Shifts: A move towards takeout, delivery, and healthier options. Historical Context Founded in 1993, Buca di Beppo quickly became a beloved brand but faced a downfall with an SEC scandal in 2005. Acquired by Planet Hollywood International in 2008, it has since struggled to adapt to modern market demands. CEO Rich Saultz calls the Chapter 11 filing a strategic step towards a strong future, with plans to reorganize finances, streamline operations, and possibly find a buyer within 75 days. Industry Trends Our firm has seen a significant drop in Restaurant Franchise Disclosure Document (FDD) reviews this year, indicating: 1. Investor Skepticism: A growing reluctance to invest in the unstable restaurant space. 2. Consumer Hesitancy: Declining confidence in traditional dine-in restaurants. The Road Ahead The next 75 days are critical for Buca di Beppo. Goals include: - Finding buyers or strategic partners. - Restructuring financial obligations. - Implementing changes to boost profitability. While leadership remains hopeful, the industry’s challenges call for serious contemplation. Key Takeaway for Franchisees and Investors Now more than ever, due diligence is crucial. Potential investments in the restaurant industry must be evaluated with a sharp focus on both current realities and long-term prospects. Our firm remains dedicated to offering up-to-date information and expert guidance during these turbulent times. #franchise #franchisee

Buying Out of Bankruptcy In the franchise industry, RRG Inc., a Georgia-based franchisee of Restaurant Brands International, has filed for Chapter 11 bankruptcy. This franchisee, responsible for 17 popeyes restaurants, finds itself in a difficult financial position, as highlighted in a recent Franchise Times report. The filing reveals liabilities between $1,000,001 to $10 million against assets under $50,000. As a Crumbl Cookies franchisee, I have been surprised by bills many times. For example, Sysco won't let you set up your payment until you have your first invoice, but opening a new location is also the craziest time, so it's easy to miss the first invoice and get behind on payments. Hot Take: I think any business that doesn't let you set auto-pay when you open an account is stupid. RPG Inc was far behind on vendor debts, rent, taxes, and credit obligations, with substantial amounts due to Merchants Food Service and in rent payments. For the savvy investor or entrepreneur, acquiring businesses out of bankruptcy presents a unique set of advantages. The potential to renegotiate leases, shutter unprofitable locations, and either sell off or reallocate equipment offers a pathway to revitalization at a fraction of the initial investment cost. With strategic planning and an efficient cost of capital, these acquisitions can position one to capitalize on market recoveries, laying the groundwork for significant wealth creation! Would you consider owning a brand like Popeyes if the opportunity came at a bargain price? The current market conditions might just be the right time for such strategic acquisitions.

Franchise Group Crisis: What Retailers and Strip Mall Owners Should Know The Vitamin Shoppe, a supplement retailer; Pet Supplies Plus; American Freight Furniture and Appliance, a discount furniture store; Buddy’s Home Furnishings, a rent-to-own retailer; and Wag ‘n Wash, a small-format pet grooming franchise, are all part of the diverse group of franchise brands linked to the troubled Franchise Group, Inc. (FRG). Both FRG and its lender-owner, B. Riley Financial, are currently being investigated by the SEC. The exact number of retail locations affected is difficult to determine, as figures often vary depending on the audience, especially in cases involving franchising and multi-brand franchisors facing questions. FRG’s founder and CEO, Brian Kahn, is also under investigation in connection with the collapse of a hedge fund. B. Riley’s CEO, Bryant Riley, has indicated that his firm expects to write off its investment in FRG, estimating a loss between $330 million and $370 million once the filing with the SEC is completed (a filing that has been delayed for several recent quarters). Additionally, another B. Riley borrower, Conns—a Texas-based home furnishings chain—filed for bankruptcy in July and is closing all its stores after acquiring another troubled retailer, W.S. Badcock, from FRG. Short-sellers, the SEC, and the media are all closely monitoring the situation.

On Tuesday, IFA announced a new series of policy recommendations, aimed to improve pre-sale disclosure and strengthen the franchise relationship for the long term. As Jonathan Maze writes in Restaurant Business Online, "the disclosures, known as the franchise disclosure document, are complicated and cumbersome. They are also rarely enforced." These changes, recommended for all parties in franchising, include modernizing the FDD, improving franchisee due diligence, and strengthening third-party seller disclosures. Read more about the proposal and why it's necessary: https://lnkd.in/ebhZ9dDd