After securing $1 billion in their second institutional private equity fund just before the economy began to worsen last year, Atlanta-based Roark Capital Group remains on the hunt for its next long-term Franchise system investment.
Yes, invest – the term least likely heard in business sectors over the past six months – is tossed around quite regularly by executives of Roark Capital Group, a private equity firm specializing in the franchise industry.
All irony aside, Roark is primed and ready to add proven, customer focused, and value added franchise systems to its large and growing franchise brand portfolio. Branded as the “trusted guys” of private equity in the franchise industry, Roark Capital Group’s team is confident that its 15th franchise investment will soon be in the pipeline. Yes, confident – another rare term in these uncertain times.
“While many firms are pulling back and cutting staff, we’re gearing up and actively seeking investment opportunities of all sizes and types, across all sectors, including franchisors and proven large-scale multi-unit franchisees,” said Steve Romaniello, a Managing Director who specializes in franchise acquisitions at Roark Capital. “Because of our conservative approach to capital structure Roark is not a heavy user of debt, we’re an ideal partner for franchisors and franchisees considering a liquidity event, seeking growth capital or other investment opportunities.”
Roark Capital has previously acquired 14 franchise/multi-unit brands that collectively have more than 13,000 points of distribution, 2,500 franchisees, and $3 billion in system-wide revenues across 50 states and 33 countries. Its current franchise portfolio includes such well known brands as Carvel, Cinnabon, Schlotzky’s, Moe’s Southwest Grill, Seattle’s Best Coffee International, McAlister’s Deli, Money Mailer, Fast Signs and Batteries Plus. Most recently, Roark Capital Group acquired Primrose Schools, the nation’s leader in educational child care, with more than 200 schools in 15 states.
What separates Roark Capital from other equity firms is patience. Roark actively supports management teams who want to make additional investments in people, process, and systems to generate long-term improvements, even if they have negative short-term impact. One example of this is the fact that Roark still owns Carvel Ice Cream, having increased its initial investment more than four fold since it bought the iconic brand more than seven years ago.
“We’re not the kind of firm that goes in and tries to turn a quick buck,” noted Romaniello, who also serves as Chairman of FOCUS Brands, the franchisor and operator of nearly 2,200 ice cream stores, bakeries, restaurants, and cafés. “We challenge the stereotypes of conventional private equity companies. We invest in companies with management teams that are motivated, committed to their corporate culture and dedicated to the success of their franchisees.”
Another key distinguisher is Roark’s balance of operating and financial team members. Roark’s 34 person team includes former Chief Executive Officers, Chief Development Officers, Chief Financial Officers, and Marketing executives which complement the financial team members. Collectively, the Roark Capital team has more than 100 years of operating and investment experience in franchising.
Neal Aronson, founder and Managing Partner of Roark Capital, said, “We do not run any of our companies, but since many of us have walked in the same shoes as our management partners, we understand the opportunities and challenges that a CEO faces each day.“
One significant perk of being a part of the Roark Capital family of franchise companies is information sharing and access to best practices, Aronson said. Each year, Roark holds a “Franchising Summit”, where executives of all Roark-owned franchise companies share success strategies and problem solving techniques.
About Roark Capital Group
Roark Capital Group is an Atlanta-based private equity firm that specializes in business and consumer service companies with attractive growth prospects and revenues ranging from $20 million to $1 billion. Roark Capital has previously acquired 14 franchise/multi-unit brands that collectively have more than 13,000 points of distribution, 2,500 franchisees, and $3 billion in system-wide revenues across 50 states and 33 countries. Its franchise portfolio includes such well known brands as Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, Seattle’s Best Coffee International, McAlister’s Deli, Money Mailer, Fast Signs and Batteries Plus. Most recently, Roark Capital Group acquired Primrose Schools, the nation’s leader in educational child care, with more than 200 schools in 15 states The firm has more than $1.5 billion of equity capital under management.
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