21 Jan Franchise Times | When outside investors call, choose carefully, says Slim Chickens CEO
A few hours after our interview Tom Gordon headed to London, where the CEO of Slim Chickens visited the brand’s newest restaurant in the United Kingdom and its sixth to open there since signing a master franchisee agreement with Boparan Restaurant Group in 2018.
It’s a far cry—and a continent away—from Arkansas, where Gordon and co-founder Greg Smart were drinking beer in Smart’s garage, testing fried chicken recipes and dipping sauces.
The duo, along with an ever-expanding team, eventually built Slim Chickens from a single restaurant in Fayetteville in 2003 to an 89-unit franchise system that last summer attracted an investment from private equity firm 10 Point Capital.
Attracted largely by the stable revenue stream of royalties, private equity’s growing presence in franchise investments and acquisitions has in turn driven many founder-led and emerging brands to target such groups for third-party capital.
Though the money is alluring, brand leaders must first know what they want from outside capital and have a plan for how they’ll deploy those funds long before they bring it in.
They should be prepared, too, for the intense due diligence process and understand what that outside partner is getting in return for their capital. How much equity is the franchisor giving up? What’s the impact of this outside influence?
Read the full story at Franchise Times: https://bit.ly/3gUsvf7