A Franchisee's Advice on Private Equity: Choose the Partner, Not Just the Capital

For multi-unit operators looking to scale, working with private equity is an attractive path. But not all PE partnerships are created equal.

After partnering with Seattle-based Rainier Partners in late 2023, Omega Fitness grew the business from 65 locations to nearly 200. Before partnering with PE, the business had the car, the driver, the will, and the skill, but that level of growth required a different kind of fuel.

Here’s what franchise operators should know before, during, and after a private equity deal.

Start by knowing the company’s ceiling

The path to a PE partnership isn’t always paved with urgency. More often, it’s driven by a simple grow-or-go moment: a recognition that the team and operational structure that carried the business to where it is can’t carry it to where it needs to go.

At that point, the options are familiar. Reinvent the business from the inside out or find a partner who has already solved the problems ahead and can foster growth efficiently and competitively.

Do the homework

Private equity is a culture, not just a vocabulary. Operators who walk into early conversations without fluency in how PE firms think are at a disadvantage. Before meeting with any firm, invest time in understanding the fundamentals. One useful starting point is The Private Equity Playbook by Adam Coffey, which is an extremely helpful resource for preparation before shaking hands.

The clearest sign of a misaligned partner is one who evaluates a company through a spreadsheet without first understanding how the business works. When that happens, they’re likely looking at the operation like a melting ice cube: something to acquire at a favorable valuation and extract value from over time.

That’s not a partnership. That’s a transaction.

Look for management experience in multi-unit operations, a strong track record of both investments and exits, and financial metrics, specifically multiple on invested capital (MOIC) and internal rate of return (IRR), that signal real value creation. But more than anything, look at character.

Bad character with good experience is a dangerous combination. The goal is to be surrounded by smart people: not just book-smart, but practical, strategic, and genuinely invested in the business.

What a good partner does after the deal closes

For the most part, things stay the same after the deal closes. The right partner wants to understand how the business fits its investment thesis. A good partner shows up with sleeves rolled up. They’re patient when management is learning and direct when it’s drifting.

The right partner focuses on refinement, identifying friction points that quietly cap a business’s potential and removing them. They also bring a network of operational specialists, advisors, and marketing partners. That kind of Rolodex opens doors that many operators don’t know exist.

It’s possible to generate strong revenue across dozens of locations and still lack true visibility into the health of the business. It’s like having the budget to build a rocket, then realizing nobody knows what questions to ask when interviewing astronauts. A valuable partner should be focused on strengthening financial infrastructure and reporting capabilities, creating greater clarity around performance and future growth opportunities.

Gaining control of the market

One of the biggest fears surrounding private equity is losing control of the business.

The reality is that the right partner changes the conversation. Most operators think inward: locations, team members, and day-to-day execution. A strong PE partner helps leadership think outward: about market share, competitive position, and where the brand can go.

When market share is growing, relationships tend to stay healthy. Conversations stay productive. Decisions stay focused on growth. When a firm stays involved, builds needed infrastructure, and removes barriers to growth, they become partners, not just an investor.

PE is not universally additive. The partner matters more than the platform. Do the homework, ask the uncomfortable questions early, and choose wisely. If franchisees find the right partner, they may discover PE doesn't just help them grow; they’ll help expand what’s possible.

Russ Allen is co-founder of Omega Fitness, the second largest Anytime Fitness franchisee in the United States, with nearly 200 locations across multiple states. Omega Fitness partnered with Seattle-based Rainier Partners in late 2023.