Skip to Content

6 questions franchisees should ask before embarking on a PE partnership

March 14, 2024 Article 5 min read
Lisa Plonka
In Franchising Magazine USA, Partner Lisa Plonka offers valuable insights into the considerations franchisees should make before entering a private equity partnership.
Two franchisees in a conference room discussing questions to ask before a PE partnership.Private equity (PE) firms are increasingly investing in franchise brands. While that fact is no secret, the idea of partnering with PE investors can lead to many questions. The right PE partnerships can serve as an accelerant. The challenge, of course, is figuring out what the “right” PE partnership looks like.

This exercise should start with strategy and knowledge of the marketplace. It’s important to thoughtfully prepare for any potential transaction, which requires an analysis of your current and future state of operations. It’s even more critical now because although PE firms are still actively investing in franchises, the speed with which these deals are finalized has slowed.

In today’s transaction environment, many PE firms are taking a cautious attitude, asking more questions, and digging deeper into metrics than before to ensure an investment is based on accurate data and forecasts. This shouldn’t deter a franchisee from considering a transaction, but it heightens the need to be prepared.

Related Thinking

Group of business professionals gathered around discussing the employee retention credit.
February 8, 2024

Voluntary Disclosure Program: Reducing transaction risk related to the ERC

Article 4 min read
Business professionals in modern glass conference room discussing flow through entity tax elections.
February 6, 2024

Michigan flow-through entity tax election considerations before March 15 deadline

Article 3 min read
Business professional waling down concrete steps while checking their cell phone.
August 21, 2023

Almost too good to be true: The Section 1202 qualified small business stock gain exclusion

Article 8 min read