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Exit Strategies

Feature Story:

The Other Side Of The Table: Successful Buyers Understand Sellers »

By Dean Zuccarello

As we work our way out of the current recession, we are already starting to see early signs of life in the merger and acquisition market.

2010 is evolving into the year of the transition buyers and sellers have been looking for. The significant unit contraction retail establishments have experienced in the current recession is causing companies to act more prudently when thinking about their growth strategies. Many brands have recognized the limitations of new-unit expansion and the inherent risks that accompany greenfield growth. Companies that have been on the sidelines with their growth plans are now starting to reemerge with a revised strategy for growth focused on acquisition and conversion, and enhanced availability to capital to fund growth...

Feature Story:

Timing CAPEX To Valuation: Plan Capital Expenditures To Maximize ROI »

By Dean Zuccarello

Historically, franchising has accepted EBITDA as the benchmark for establishing valuation. However, as seen over the past several years, valuations can vary widely across franchisors, franchisees, and company-owned concepts.

Franchising has seen transaction multiples ranging from the low single digits up to lofty double digits. So what is the justification for this wide range in transaction multiples? What makes a buyer willing to pay 8x for one deal, but only 4x for another?

In franchising, EBITDA multiples vary for several key reasons. This article explores the effects of capital expenditures (CAPEX) on franchise company valuations, and how CAPEX factors into the ultimate value a franchise owner receives in a transaction...

Feature Story:

Is There A Merger In Your Future?: Why Mergers Could Become A Hot Strategy This Year »

By Dean Zuccarello

Mergers and acquisitions (M&A) have been an instrumental component in franchising over the past two decades, particularly as a growth vehicle for expanding companies. Historically, most transactions in franchising have concentrated more on the "A" than on the "M." Some of the primary drivers for this have been cultural and business trends deeply entrenched within franchising. However, the current global financial crisis and franchising's own changing dynamics may alter this.
Why acquisitions have dominatedHistorically, the franchise industry has been predominantly represented by entrepreneurs in the form of franchisees and emerging franchisors. Given this fact, franchise companies often have a "lifecycle" pattern similar to that of the founding entrepreneur...

Feature Story:

Restaurants Face New Reality: Operating In A Changed Economic Environment  »

By Dean Zuccarello

Since mid-2008, the economy, consumers, and the restaurant industry have been in the vice grip of the country's deepest and longest recession since the Great Depression.

Finally, a light at the end of the tunnel is beginning to emerge. Most economists are now saying we have reached or passed the bottom. While the going is certainly still rough, business conditions are beginning to improve, unemployment is stabilizing, and consumers are dipping their toes back in the spending pool. Capital flow is increasing, with equity investors coming off the sidelines and lenders beginning to seriously pursue new debt facilities for borrowers.

The economic recovery will bring increases in consumer spending, restaurant traffic, transaction counts, and sales levels...

Feature Story:

How To Sustain Your Business Growth So You Can Exit Successfully »

By Nicholas K. Niemann and Andrew Horowitz

Robert came to us to help him develop a 5-year Transition Growth Plan so he could sell his company and retire. He had high expectations for what the sale would net him financially, based on his presumed growth rate. Unfortunately, his presumptions were well beyond business reality. He had never utilized a written strategic growth plan or a business model innovation program. And the stagnant state of affairs which made up his company were proof of this.

The Next Step Program identifies the top 12 principal reasons which have caused business owner transitions and exits to be unsuccessful. Each of these reasons impacts the company's ongoing annual profitability as well as an owner's transition and future exit results. This article addresses the 7th of these 12 reasons:

Feature Story:

Managing Your Personal Wealth »

By Nicholas K. Niemann and Andrew Horowitz

Jake was visibly upset when he came to see us. He had been planning to retire in 3 years by age 55, based on the combined value of his personal investments and his company. This was now on hold for an indefinite period of time. Like many, he had suffered a significant hit in the 2008 through 2009 stock market declines. He wanted to visit about the benefits of a comprehensive wealth plan - something he hadn't taken the time to explore in the past.

The Next Step Program identifies the top 12 principal reasons which have caused business owner transitions and exits to be unsuccessful. Each of these reasons impacts the company's ongoing annual profitability as well as an owner's transition and future exit results. This article addresses the 6th of these 12 reasons:



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