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Exit Strategies

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Dogtopia
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During the initial stages of an exit strategy engagement with our clients, we spend considerable time gaining a full understanding the client's business.
  • Dean Zuccarello
  • 9,983 Reads 1,010 Shares
We have made progress digging our way out of the pit of economic meltdown we tumbled into in 2007, but we certainly have a long way to go before we experience the vibrant economy we enjoyed in much of the 1990s and the early to mid-2000s.
  • Dean Zuccarello
  • 5,797 Reads
When sellers are contemplating a decision regarding the sale of their business, they overwhelmingly select the bidder with the highest price, only to find afterward that this might not have been the best decision for their circumstances.
  • Dean Zuccarello
  • 5,495 Reads
Interest rates right now are low—very low. They've been low for a while. And they're expected to remain low for the foreseeable future
  • Dean Zuccarello
  • 5,270 Reads 1,017 Shares
Gordon Gekko, the main character in the 1987 blockbuster film Wall Street, quickly became a popular cultural icon of unrestrained greed.
  • Dean Zuccarello
  • 7,572 Reads 464 Shares
Over the past 25 years, franchising has continued to develop and become more sophisticated. The reins of the franchisor have passed from the pioneering founders to established management teams with significant industry experience. Today, many of these companies are publicly traded or majority-owned by institutional equity investors.
  • Dean Zuccarello
  • 5,163 Reads
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.
  • Dean Zuccarello
  • 3,782 Reads 69 Shares
When Cheryl Robinson went to work as a bookkeeper at a Southern California Supercuts salon in 1980, she knew nothing about franchising. Worse than that, she had "the world's worst hair. My idea of a good 'do' was a bikini scarf and hair tape on my bangs," she jokes. "I had curly, unruly hair and was using terrible products. I quickly learned that Prell--since it could hold up a pearl--was drying the holy hell out of my hair."
  • Debbie Selinsky
  • 9,710 Reads 372 Shares
In 1998, a young Canadian attorney named Fiorenzo Bresolin traveled to Florida to work on a large real estate transaction. It wasn't long before he fell in love with the state--and its booming real estate business. The outgoing corporate lawyer went on to develop, along with partners, a 500-acre corporate park in South Florida owned by the late Mel Simon of the Simon Property Group; today he's knocking on doors to place his restaurants in some of those malls.
  • John Carroll
  • 8,070 Reads 569 Shares
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?
  • Dean Zuccarello
  • 16,328 Reads 1,834 Shares
When Cheryl Robinson took over the bookkeeping responsibilities at a Supercuts location in 1980, she had little idea that she would one day own and operate her own Supercuts. Today, she and husband Joe, oversee an empire of 31 Supercuts throughout southern California. She's learned a lot about the salon business and franchising over the past three decades. One thing she fully understands is that hard work and customer service at a business are more important than ever during tough economic times.
  • Multi-Unit Franchisee
  • 5,688 Reads
Angry Crab Shack
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Angry Crab Shack
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Angry Crab Shack
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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.
  • Dean Zuccarello
  • 5,168 Reads 1,014 Shares
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.
  • Dean Zuccarello
  • 5,401 Reads 361 Shares
You've worked hard to build your multi-unit franchise business, and now it's time to step back--not only from the day-to-day operations, but perhaps from the business itself. Is it time to let go? Can you? Will the business continue without you?
  • Eddy Goldberg
  • 5,745 Reads 1,021 Shares
The big multi-unit rollers who convened in Vegas this April represented more than $1.6 billion in annual revenues, and they were playing to win. It was all part of the 2009 Multi-Unit Franchising conference, sponsored by Franchise Update Media Group this past April 15-17 at the Bellagio hotel. The annual event, which attracted a record 500-plus multi-unit franchisees, franchisors, and vendors from across the country, was a sure bet for attendees.
  • Kerry Pipes and Eddy Goldberg
  • 4,087 Reads 85 Shares
The historical consolidation of franchise finance sources (local and regional banks, and other institutions) has led to only a handful of major players financing franchised companies over the last several years. These institutions, all well-known household names, have dramatically decreased leverage multiples while increasing interest rates and, most importantly, are tightly preserving capital until general economic conditions show signs of stability. As these lenders limit the flow of debt capital to franchising (or shut off lending completely), there are some trends all franchise owners should consider to ensure their financing needs are met during this recession.
  • Dean Zuccarello
  • 3,515 Reads 60 Shares
Business cycles are the norm and while difficult to predict, peaks and valleys in our economy will always occur. However, the speed and magnitude of deterioration in worldwide business conditions and financial markets make the current recession especially severe. As everyone now knows, this is not a normal trough or business cycle; survival and success during these times will require extraordinary actions.
  • Dean Zuccarello
  • 3,402 Reads 27 Shares
When franchise sellers seek exit strategies, they most often look to strategic buyers, other franchisees, their franchisor, or financial investors such as private equity as potential buyers for their businesses.
  • Dean Zuccarello
  • 2,918 Reads 5 Shares
Amid the arid, bronze landscape of the Arizona desert, things heated up for Area Developer's 2008 Multi-Unit Franchising Conference on April 23–25 at the Hyatt Gainey Ranch Resort & Spa in Scottsdale. The annual three-day meeting of the minds, which once again set new attendance records, was packed with seminars, sessions, and speakers who provided multiple opportunities for personal and professional growth for multiunit franchise operators of all size and scope.
  • Kerry Pipes
  • 3,423 Reads 31 Shares
As we have highlighted throughout 2007, the change in the economy we anticipated is finally upon us.
  • Dean Zuccarello
  • 3,427 Reads 1,021 Shares
The legend is familiar: In 1950, Bill Rosenberg opens the first Dunkin' Donuts store in Quincy, Mass. In 1955, he licenses the first franchise. In 1960, his dream of franchisors and franchisees working together is realized in the founding of the International Franchise Association. In the coming years he would become involved in philanthropy and be called the "father of franchising as we know it today" by Nation's Restaurant News
  • 27,711 Reads 1 Shares
Jamba®
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Jamba®
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Jamba®
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For multi-unit owners, planning an exit strategy is something to consider long before investing in that first unit or concept. What are your long-term goals? Would you like to sell in five years? Ten? Pass the business to a family member? Make a clean break, or keep your hand in? Is trading your cash flow for a lump sum the best way to go? What about seller's remorse?
  • Eddy Goldberg
  • 4,290 Reads 11 Shares
Being a big fish always helps, especially in a big pond. But big fish still have problems-or opportunities as the more optimistic prefer to call them. And it certainly helps to have a positive outlook when you become an area developer. Topping the list of problems/opportunities are the usual items: location, hiring and retention, financing, etc.-but magnified by the number of units, as well as the number of concepts operating under one umbrella. Area Developer magazine asked four successful "Big Fish" to weigh in on what's tipping their scales as 2005 approaches.
  • Eddy Goldberg
  • 2,525 Reads 7 Shares
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