Practice Areas

Paul Woody Explores the Appeal of Franchises for Private Equity in M&A Deals in Recent PE Hub Article

November 13, 2023

Paul Woody HeadshotIn a recent article from PE Hub, Paul Woody, an attorney in Greensfelder’s Franchise practice group, emphasized the appeal of franchises for private equity. Franchises offer consistent revenue streams, making them attractive to lenders, and provide many opportunities for brand growth. Woody highlighted the importance of maintaining a strong franchisor-franchisee relationship, where franchisees retain the majority of gross revenue but pay royalties for brand usage. Private equity firms can securitize future royalties, often securing lower interest rates. Woody also noted that acquiring additional franchises in similar sectors can lead to cost efficiencies, such as shared warehouse or distribution space and streamlined management positions. For franchisees, partnering with leading brands and fostering good relationships with franchisors are key considerations for strategic growth.

Read the full article here.

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