As part of its Dealmakers project, Franchise Times recognizes those in the adviser category. These winners are investment bankers, consultants, M&A experts, attorneys, CPAs, lenders and similar professionals facilitating multiple deals in franchising. This year, Unbridled Capital and Harrington Park Advisors earn the spotlight. Check out more winners as we recognize the top players driving M&A in franchising.
Derek Ball is Unbridled Capital's senior vice president.
Unbridled brings sell-side wisdom
It’s not just about the price.
Derek Ball, senior vice president at investment bank Unbridled Capital, said less than half of the firm’s deals go to the highest bidder. Many other factors are in play when it comes to successful sell-side M&A.
“Obviously, price is up there. If you’re just way off on price, it’s probably not going to matter how good you are in other aspects,” said Ball as he talked important elements of evaluating buyers. “Then, do you have corporate support? Corporate support is infinitely more important today than it was even when I got into business eight-and-a-half years ago. Franchisors will have no shame in vetoing buyers anymore. They do it left and right.”
How a buyer will finance the acquisition is likewise becoming more important as banks tightened their lending standards, especially for restaurant deals. Three years ago, said Ball, you could call up a bank and have the money 45 days later.
“It’s not that way anymore,” he said. “I want to know how much equity a buyer is looking to put into a deal, how much debt they’re looking to put into a deal and the source of both.”
While buyers used to put 90 percent debt on businesses, to win franchisor approval, many brands want a minimum 20 percent equity infusion; some are pushing for 30 percent. A rise in restaurant bankruptcies, high construction costs, inflation and sluggish unit sales affect the M&A climate, said Rick Ormsby, managing director of Unbridled. For franchisees looking to sell, he emphasized supply and demand.
Rick Ormsby is managing director of Unbridled Capital.
“An operator will say, I’m only going to sell when it’s doing bad because I’m tired of operating it. That’s the wrong time to sell something. You should sell only when it’s doing really well,” said Ormsby. “The second piece is, I’m only going to sell when the overall market is
better. That’s not always the right time because you have higher supply of other restaurants out there for sale that compete against you.” In short: Sell when the business is performing well in a tough environment.
That was the case in two deals in 2024. Unbridled advised Primary Aim on its sale of 65 Wendy’s restaurants in three states to Delight Restaurant Group, a large existing franchisee led by Rich and Andrew Krumholz. And it represented Scottish Foods as it sold 28 KFCs in North Carolina to KBP Brands. The value range for each was $50 million to $125 million.
Primary Aim, led by brothers Ben, Tim and Steve Thompson, started with one Wendy’s in Ohio in 1999 and grew to 78 locations. They continue to operate 13 stores in the Columbus area. “There haven’t been that many truly healthy businesses that have come up for sale,” Ormsby said, and Primary Aim was one.
“They had no private equity and no family office backing,” he added. “They just did it themselves with their family gusto and a little bit of money and a lot of dedication.”
Scottish Foods, a third-generation KFC franchisee, was likewise among the top performers in its system, said Ball, with its stores doing $2 million a year in sales, 60 percent above the national average. Eight offers came in, Ball added, “a massive testament to how good that business truly was.”
Harrington takes ‘white-glove’ approach
Ashish Seth founded Harrington Park Advisors in 2023 to address what he saw as a gap in the investment banking space for middle-market, lower middle-market and emerging brands. Clients in those groups, he said, need an adviser in their corner, shepherding the deal with day-to-day service.
“The billion-dollar companies don’t need it, the $10 billion companies don’t need it,” he said of Harrington Park’s “high-touch, white-glove” approach. “But the middle, lower-middle, emerging growth brands, these people really need true advice, fair advice, integrity, but also with a focus on excellence and quality.”
Seth spent more than 20 years in investment banking at companies such as Merrill Lynch, Bank of America and, most recently, Arlington Capital Advisors. Harrington Park focuses on M&A in the multi-unit consumer services space, including restaurants.
When Seth and his team dig into a deal, they’re incredibly brand focused.
Ashish Seth is the founder of Harrington Park Advisors.
“My view is that if you’re a fried chicken brand, you’re not the only one out there. So how do we get you to rise above the other players in the market and drive a premium result for you?” he said. “You do that by differentiating what your brand means, what it stands for, how is it different and unique, and telling the brand story in its own voice.”
That’s the approach he took with Houston TX Hot Chicken in its sale to Savory Fund in November 2023. Founder and pro race car driver Edmond Barseghian grew the chicken concept to 11 corporate and franchise locations, and putting the brand’s young, colorful, edgy voice—in addition to its strong unit economics—front and center was essential to it standing out in the market.
“Part of our job is to communicate that to buyers and help them see the uniqueness,” said Seth. “This is not just one in 30 other chicken brands; this is one of one.”
Relationships, too, are important. Seth got to know Image Studios founder Jason Olsen in 2020 when he had a handful the salon suite locations. Post pandemic, “growth really supercharged,” said Seth, and unsolicited interest in Image Studios increased as Olsen sought the best path forward for a brand that had 76 units across 20 states and a pipeline of 220 units.
Harrington Park was the exclusive adviser to Image Studios as it sold a majority stake to MPK Equity Partners in March 2024. The key to that deal, said Seth, was constructing a transaction strategy that would convince a buyer to pay for growth yet to come.
“In a sea of other very successful salon suite businesses, where Image cuts through is that its brand is young and modern. It speaks to today’s salon professional and to today’s guests,” said Seth. Equally important was demonstrating with data a stable business with success in markets across the country, and leveraging Harrington Park’s expansive buyer network.
The firm last year also acted as the adviser to Untamed Brands (Taim Mediterranean and Hot Chicken Takeover) on its sale to Craveworthy Brands, and it advised Craveworthy on its purchase of Fresh Brothers Pizza.