Levine Leichtman Capital Partners, LLC’s Post

What's next for Tropical Smoothie Cafe after its acquisition? Private equity funds managed by Blackstone have successfully acquired Tropical Smoothie Cafe from Levine Leichtman Capital Partners, valuing the fast-casual chain at approximately $2 billion according to the Wall Street Journal. This acquisition also introduces Nigel Travis, former CEO of Dunkin’ Brands, as the new chairman of Tropical Smoothie Cafe, marking a significant leadership shift. Founded in 1997 and headquartered in Atlanta, Tropical Smoothie Cafe is a leading franchisor with over 1,400 locations across 44 states. With the new backing from Blackstone, the company is poised for accelerated expansion and innovation. “With Blackstone’s capital and resources, we look forward to accelerating the company’s continued expansion across the country and supporting innovation to further capitalize on the brand’s unique positioning,” said Blackstone executives Peter Wallace and Michael Staub. The acquisition follows significant growth under Levine Leichtman Capital Partners, who acquired the chain in 2020 when it had 870 locations. In 2023 alone, Tropical Smoothie Cafe opened over 175 new locations, with 70% launched by existing franchisees. 👉 Click link for details: https://lnkd.in/gyy7-s7k #NNN #retail #realestate #investment #investing #commercialrealestate #property #passiveincome #cre #investor #realestateinvesting #commercialproperty #netlease #retailrealestate #tropicalsmoothiecafe

When we first took on restaurant investment raises in 2015 there was a well trodden path for new concepts to follow. Use equity investment to get your first couple of sites open, use debt and some self funding to do the next couple and eventually you will be self funding to the point at around 8-10 sites there would be a private equity company waiting with open arms to turn the business into a national chain, to be sold again to an even larger private equity company. Is that still a thing? We always talk to new concepts who are looking for investment to have a fairly clear idea of what an exit may look like, at what point, what price and to whom. That's not so easy nowadays as the would-be buyers of 8 site restaurants have had their fingers burned, so where is the exit? That's one reason why investors are thinking long and hard before diving in. #hospitality #restaurants #finance #investment #angelinvestment #familyoffice #privateequity #exitstrategy

#JustFunded: #NNNAcquisition Michael Bucaro and Matthew Bucaro sourced the financing for the purchase of a Wendy’s #STNL fast-food restaurant. This is part of a #1031exchange across 21 different properties all over the US, and for this specific property, a local #creditunion was chosen as the best option. To learn more about how we can help with your #CRE investment, be sure to reach out. #CommercialRealEstate #TauroCapitalAdvisors #Tauro #retail

Hypothetical question (somewhat) Let's say you started a small restaurant business as an LLC and you are the manager. In addition to your ownership interest in the LLC, you have five investors who are also members of the LLC. What if you found out one of them was also a member of another LLC that owned a competing restaurant in the same area? Would that be a conflict of interest? If you think yes... What if both LLCs are manager-managed and the investor hasn't been involved in any management decision but just wanted to diversify holdings across multiple restaurant companies? Would that change the conflict of interest? #llc #corporategovernance

🍻 In the highly competitive world of craft beer, what was the turning point for our newest Operational Partner Mark Roberts and his business BeerHawk? 💡 Mark explains that, actually, the real lightbulb moment came when leaning into what he and his co-founder were uniquely good at...meetings! 🏆 "We became the number one craft beer online retailer in the UK." 👇 Check out the interview to learn more! #VC #VentureCapital #Founders

Private equity firm Bain Capital has agreed to buy Fogo de Chão, in a deal people familiar with the matter said valued the Brazilian steakhouse chain at about $1.1bn, including debt. The deal marks a win for private equity firm RHONE CAPITAL, which took Fogo de Chão private for $560m in 2018. Rhône made more than three times the money it invested in the restaurant operator, the sources said, requesting anonymity as the matter is confidential. Bain Capital has $175bn of assets under management and you can meet them at the London PE conference this September, where they will share their outlook on the industry looking 5 Years Ahead. Learn more here: https://lnkd.in/gWvspeST Under Rhone's ownership, Fogo de Chão's financial performance improved and it has posted annual revenue growth of 15% since 2021. #PEInsights #privateequity #acquisition #investment

Bain Capital has acquired Brazilian steakhouse chain Fogo de Chão in a deal valuing the restaurant at approximately $1.1 billion, including debt. This transaction is a notable success for private equity firm RHONE CAPITAL, which purchased Fogo de Chão for $560 million in 2018. Under Rhone's ownership, the steakhouse has seen a 15% annual revenue growth since 2021. Prior to its sale, Rhone had explored re-listing the restaurant's shares on stock exchanges, even submitting initial IPO paperwork; however, as the US IPO market collapsed in early 2021, Rhone began exploring sale options. The sale of Fogo de Chão aligns with Bain's history of investing in well-known restaurant brands and is part of a recent surge in restaurant industry dealmaking. Other recent notable restaurant deals: (1) Authentic Restaurant Brands added Fiesta Restaurant Group, Inc., including the well-known and beloved Pollo Tropical brand, to their portfolio for a value of $225m. (2) TDR Capital and Sycamore Partners are considering a joint bid for the globally recognized fast-food chain Subway, valuing it at an estimated $9 billion. #PrivateEquity #Investments #Acquisitions #Dealmaking

Caprice Holdings, led by Richard Caring, is back in profit with a remarkable 71% increase in turnover to £74m for the year ending 1 January 2023. This growth, driven by consistent restaurant and club trading and the opening of new locations, reflects the resilience of the hospitality industry. With adjusted EBITDA at £13.3m and a profit after tax of £840,000, Caprice Holdings' success adds to the positive momentum seen in other Caring-backed ventures like Bill's Restaurants and The Ivy Collection. This continued good news reaffirms the industry's steady recovery and future potential. #CapriceHoldings #HospitalityIndustry #Turnaround #PositiveResults #RetailSavvy #SavvyInsights

https://lnkd.in/ecQivcp2 Cost-cutting, private equity and piles of shrimp: What really drove Red Lobster into bankruptcy There has been much talk about the "All You Can Eat Shrimp" promotion that Red Lobster is well known for and made permanent contributing to their precarious financial situation and need to file bankruptcy. Further analysis of Red Lobster's financial debacle indicates there were other mitigating factors at play including the private equity owner selling the restaurant's real estate and collecting quick cash, putting the restaurant chain in serious debt with high real estate rent payments that it could not ultimately afford. In a wider sense, many commentators have claimed this saga as an example of how the private equity business model destroys viable businesses by treating them as short-term cash cows and selling off their assets. “Once they sell the real estate, then the private-equity company is golden, and they’ve made their money back and probably more than what they paid,” Eileen Applebaum of the left-leaning Center for Economic and Policy Research told Business Insider. Sound familiar: This sounds like the saga of Stewart Healthcare and Cerebus Capital selling the real estate to a real estate trust, leaving the healthcare system with large rent payments that it could afford. Meanwhile the PE vultures made out like a bandit, ultimately cashing in on $800 plus million. Another PE play, draw out the profits for the company and shareholders and leaves the business in shambles. #privateequityvulchers, #getthemoneywhileyoucan, #redlobster

The recent bankruptcy of Red Lobster, a stalwart in the restaurant industry, is a cautionary tale about the dangers of prioritizing short-term gains over long-term sustainability. The decision to sell Red Lobster's real estate assets for $1.5 billion and subsequently force the company to lease those locations back at above-market rents undermined a well-established business model that relied on owning real estate. As an advisor and investor to a restaurant business, this case serves as a stark reminder of the importance of sustainable financial strategies and the risks associated with short-term value extraction when it comes to access to capital It also prompts reflection on the need to prioritize businesses with solid, long-term foundations. The broader implications for the restaurant industry are also noteworthy, as other companies may need to reassess their financial structures and business models to ensure they are not similarly vulnerable. This case underlines the critical importance of maintaining a balance between capital access and business model integrity. The food industry is a key pillar of the global economy, and we must take a measured approach to ensure its long-term success. Enjoy this article on the subject: https://lnkd.in/g5XUCGSe