PRIVATE EQUITY IN FRANCHISING

Transcription

1 1 Shawn M. Caric Vice President Franchise Development Hollywood Tans

2 2 Moderator Shawn Caric Vice President; Franchise Development, Hollywood Tans, LLC Director of Franchising; Dunkin Donuts ( ) Regional Sales Manager; Hallmark Cards ( ) Mkt Development Mgr; Hallmark Cards ( ) Guest Lecturer; Seton Hill College & Mount St. Mary s University CFE (2006) BS from Penn State University (Quantitative Business Anaylysis)

3 3 Panelist Suresh Rajan CEO Java Nova, LLC; Dunkin Donuts Franchisee Multi-Unit Developer of Dunkin Brands in the Mid-Atlantic Former President of SPD Ventures LLC a Multi-Unit, Multi-State Quiznos Sub Operator From was a Consultant with McKinsey & Company From Lobbyist and Executive Director of the John Quincy Adams Society in Washington, DC MBA from Harvard Business School

4 4 Panelist John Rigos - Managing Partner, Five Points Partners Multi-Unit Developer of Several Brands, Including: Five Guys Famous Burgers & Fries (NYC) Dunkin Donuts (Washington, DC & MD) Entrepreneur-in-Residence, Idealab! Founded Two Internet Companies MBA, INSEAD BA Economics, University of Pennsylvania

5 5 Private Equity/Franchising In The News Dunkin Brands; Bain, Carlyle, THLee ($2.4b) liberated Dunkin Brands. CEO Jon Luther Friendly s; Sun Capital Partners ($337.2m) to quiet activist investors. Franchise Times 9/07 Hollywood Tans; ACI Capital (undisclosed) proven record of success in growing franchised consumer-service businesses. HT Founder Ralph Venuto Sr. ServiceMaster, Johnny Rockets, Cartridge World, Back Yard Burgers, etc. popular targets in large part due to their steady cash flow. Franchise Times 9/07

6 6 What is Private Equity? Professionally Managed Pools Of Capital Focused On Investing In Private Companies Fund Managers Family Offices Angel Investors Typically Longer-Term Investment Horizons Active And Passive Management Participation

7 7 Why Is Private Equity Interested In Franchising? Significant Growth / Expansion Potential Proven Business Models Reliable Cash Flows Seasoned Operating Partners Availability Of Debt Financing Various Exit / Liquidity Options

8 8 Is Private Equity Right For Your Network? What Are Your Company s Objectives? Growth Capital Or Liquidity? What Are PE Expectations For Returns And Timing? Can Your Network Meet Those Expectations? Are There Other Financing Options More Attractive For Your Network? What Role Do You Want PE To Play In Your Organization? Is Their Industry Expertise / Knowledge Relevant To You? What Is Important To You? Capital, Counsel & Contacts

9 9 Preparing A Business Plan For Private Equity Partners Enterprise Level Economic Model Cash Burn, Time To Cash Flow, Valuation Metrics Timing Of Infrastructure Development, Growth Potential Experienced Management Team Supporting Evidence Of Due Diligence Reasonable Exits and Liquidity Events Private Equity Role In Governance And Control

10 10 Ownership Structures And Their Effect On Franchise Documents? Compatibility With Franchisor Preference In Capital Structure Follow On Capital Board Composition Corporate Governance Guarantees Anti-Terrorism

11 11 Still Interested? Where To Start? Networking/Referral PE/Venture Capital Directories Fund Managers Broker/Dealer Networks High Net Worth Friends & Family Internet

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