Changing Lending Practices In Franchise Transactions

Carty Davis is an area developer for Sport Clips in North Carolina with more than 70 units. He’s also a partner with a boutique investment bank and has experience with hundreds of transactions in the multi-unit franchise space.

Carty has observed changes and developments, including an extension of timelines for industry-related transactions, over the past few years. Everything from multi-unit franchisee approval, franchisee-to-franchisee transfers, and private equity/family office investments, to refranchising and recapitalizations with both regulated and non-regulated capital providers.

He says time kills deals and longer cycles can expose transactions to franchisor approval sentiment, changes in lending conditions, and macro or geopolitical events. But he says the deal process can be handled with the right focus, time, and effort up front.

Here he talks about the lending process and its evolution over the past few years.

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