Big Money in Franchising with Private Equity - With Alicia Miller

The Franchise Hot Seat Podcast with Dr. John P. Hayes - Director, Titus Center for Franchising

DESCRIPTION:

Alicia Miller, founder and managing director of Emergent Growth Advisors, discusses her book, Big Money in Franchising, and the role of private equity in the franchising industry. She highlights the success story of Tropical Smoothie, which grew from 315 to 1400 units through private equity partnerships. She also discusses the Dwyer Group, a home services giant, which transitioned from being publicly traded to partnering with private equity.

Miller points out that 700 franchise brands have partnered with private equity companies, with at least 2 trillion dollars available for investment in franchising. She explains that private equity in franchising began in the 1990s, with significant growth after the 2009 financial crisis. She emphasizes that successful private equity partnerships in franchising focus on franchisee satisfaction and investment.

There are 5,000 registered private equity firms in the United States, with 1,400 having invested in franchising. These firms often specialize in certain sectors or stages of brand development. Miller advises emerging brands to be prepared before engaging with private equity firms and to consider the implications of losing decision-making authority. She reassures franchisees that initial private equity transactions usually align with their growth goals.

-With Alicia Miller

TIMESTAMPS:

00:00 - Introduction of Alicia Miller and her background in franchising and private equity.

01:15 - Example of Tropical Smoothie's success with private equity, including recent transactions.

02:00 - Discussion on the Dwyer Group and its transition due to private equity involvement.

03:00 - Acceleration of private equity interest in franchising post-financial crisis starting around 2009.

04:30 - Challenges faced by publicly owned franchise companies with shareholder interests.

06:00 - Overview of the number of private equity firms and family offices in the United States.

08:00 - Potential conflicts between franchise operations and private equity decisions.

09:15 - Specialization of private equity firms in franchising and specific investment criteria.

10:30 - Exploration of how private equity firms actively seek out emerging franchise brands.

12:00 - Dynamics between franchisors and private equity firms in brand acquisition and growth strategies.

LINKS:

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