Franchise M&A Update: November 2024
Welcome back to Franchisor.com’s “Franchise M&A Update” column, your monthly inside scoop for all franchise M&A, industry rumors and bankruptcy stories.
After what felt like an eternity, the election came and went earlier this month. About 3 weeks removed from Trump’s victory, experts are predicting the era of “dry powder” will finally be over, with many sponsor-backed entities looking to transact in a hurry. Real estate will start to get easier, as lenders begin to build out a portfolio again. Franchise sales will start to flourish, with candidates feeling more confident in lending rates. Could this come crashing down? Absolutely. But hey, it sure is nice to dream for some times of stability, that’s for sure!
Major restaurant news this month, where one of franchising’s most notable unsponsored brands finally transacted after 50+ years. Additionally, some major rumors out of RFDC about another darling of the industry looking to transact in 2025. And finally, one of our most famous casual dining chains is under bankruptcy protection, joining quite a big graveyard of them this year. Happy reading!
Show Me The Money:
Commercial & Home Services
EverLine Coatings Lines Up Private Equity Investment, Plans For System Enhancements And Growth: A late October acquisition after this author turned in his October edition, this transaction is a major boon for emerging private equity group, Red Iron Group. Just coming off of their purchase of 100% Chiropractic a few months ago, this sees them getting into the commercial services space with a franchise sales juggernaut, EverLine Coatings. Hailing from the Great White North, this brand’s energetic, Millennial leadership combined with their burgeoning national accounts program should be a major win for all involved. Red Iron plans to use their investment in bolstering US operations, adding additional tech capabilities and continuing to bolster the brand’s national accounts program.
Largest Holiday Lighting Franchisor, Christmas Décor, Sells To Franchising’s Newest Brand Collector, Wonder Franchises: After building themselves a $75 million business for seasonal franchisees, Christmas Décor finally decided to take the plunge with Wonder Franchises, a new franchise platform started by some whip-smart Ivy Leaguers. From the outside looking in, I believe this could be an opportunity for Wonder to build out a collection of smaller home service franchisors into their own little franchise platform company. Although I don’t think Christmas Décor’s team would be the one running it (I’m presuming they’ll hire someone from the outside), keep your eye out for another potential franchise platform name to remember!
Food & Beverage
In Landmark Deal of 2025, Jersey Mike’s Is Sold To PE Titan, Blackstone, for $8 Billion: Back in April, we discussed the possibility of this deal getting done. At the time, CEO Peter Cancro played both sides of the coin, remaining coy but “open” to the idea. Just weeks removed from Election Day 2024, the landmark deal of the year was finally closed. One of franchising’s largest privately-owned brands, officially part of the private equity club. Considering the rapid rise of Jersey Mike’s in recent years, this will surely be a Harvard Business Review case study in short order. If I had to put my finger on why this deal is happening now, I think the answer is simple: international expansion. Considering their compatriots have seemingly failed in doing so effectively, Jersey Mike’s seems to be treading carefully in expanding outside of their roots “the right way”. To do, they need all of the ammunition they can get.
Craveworthy Brands Takes A Slice Out Of The Pizza Market With Investment Into California Pizza Brand, Fresh Brothers: Another month, another acquisition by Craveworthy. This time, Gregg Majewski has ventured into California to buy cult-classic pizza brand, Fresh Brothers, to add a QSR pizza brand to his portfolio. With low overhead, relatively few real estate requirements and a built-in fan base, this is a shrewd acquisition that will allow Craveworthy to grow their platform’s franchisee footprint out West through further franchise expansion of Fresh Brothers (which will be launched in 2025) and by tapping into their other franchise brands for growth on the West Coast.
On The Franchise Trade Block:
Industry Juggernaut Freddy’s Frozen Custard and Steakburgers Tipped For Next $1B+ Transaction In 2025: As I posted here, F&B is going to see a LOT of movement in 2025. First on the docket, another high-growth brand, Freddy’s. After their sale to Thompson Street in 2021, Freddy’s brought in industry-veteran and friend of this newsletter, Chris Dull, to become CEO. Since then, the brand has taken a massive leap in same-store sales, franchise growth and in technological innovation. So much so, that it has officially been dubbed “one of franchising’s next multi-billion dollar transactions”. Not bad for a brand out of Wichita, Kansas! Keep your eye on this newsletter, I’m thinking the whispers in the RFDC halls have some truth to them.
Bad, Bad News:
TGI Friday’s, Legendary Casual Dining Brand, Files for Chapter 11 Bankruptcy: Another casual dining chain falls prey to the great “casual dining correction” we’re seeing in 2024. As per usual, TGI Friday’s cites capital structure, COVID-19 and their failed acquisition for their recent woes. Earlier this year, TGIF lost control of most of their assets to creditors as well, making life particularly difficult when they cannot control their own destiny. As I have predicted before, don’t be surprised if this once-mighty brand sells for a fraction of the price in this presidential term to a value-brand collector, which are starting to emerge all over the casual dining segment.
Fast Casual Pizza Concept, Oath Pizza, Files For Liquidation: Wild story here, certainly worth the read here to caution you against what a “bad apple” can do in the franchise space. While this is a wonderful business model, sometimes people can take advantage of it. Sad to see this seemingly-innovative pizza concept go belly-up for good here. As we mentioned earlier this year, the assembly-line pizza space has faced their fair share of challenges for several, well-documented reasons. Compounding that with an investor lawsuits is a recipe for disaster, as you can see!
As always, thanks for reading! If you have any tips and have some comments you’d like me to quote you in here, please email me at zack@franchisesuppliernetwork.com. Happy Thanksgiving to all, looking forward to speaking to you all again come Christmas time.
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