Franchise stars, supporting teams help drive M&A deals
For years my husband, Doug, coached our sons in both basketball and baseball, and he loved it. He loved coaching kids, finding the diamonds in the rough and smoothing out their skills, looking for talent and bringing it to the forefront while inspiring them to do better.
He nicknamed one boy on a junior high basketball team “The Pest,” because he did just that: pestered the opposing team up and down the court. The kid loved the moniker, and by the end of the season became well versed in stealing the basketball from his opponent.
Not everyone was a star, but you can’t have a team consisting entirely of stars, Doug says. Someone has to be the rebounder.
And that’s why I love this issue of Franchise Times: We have a plethora of stories about teams who shepherded M&A deals to their conclusion. Our coverage of the Franchise Times Dealmakers Awards celebrates creative M&A transactions that made it to the finish line. Sure, there are the people in the forefront, but also people in the background who make it all work.
Senior Editor Beth Ewen’s cover story on Chicken Salad Chick, which garnered the Deal of the Year, is no garden-variety transaction. The company was sold last year to a second private equity firm, Brentwood Associates, which has $2.4 billion under management with brands such as Orangetheory and Blaze Pizza.
Every deal has a colorful story at its core, and company founder Stacy Brown has her share of tales about risk taking, falling down and getting back up. We profiled her a few years ago, including documenting her story of selling chicken salad door to door while trying to make ends meet before opening her first restaurant.
It’s inspirational, but there’s more: Behind the scenes is a management team, led by CEO Scott Deviney, a former banker and Wendy’s franchisee. Deviney teamed up with Eagle Merchant Partners back in 2015 to make an investment in Chicken Salad Chick. Small, but decidedly calculated, changes by Deviney through the years brought average unit volumes up, and boosted the unit count from 32 when he joined to the 150 they have today. Being a former franchisee himself, “…means I have a franchisee perspective, the P&L, profitability,” he says. And, as Beth writes, at the same time he knew how to “safeguard” the things that made the brand what it is. You will want to read Brown’s story, and Deviney’s, too.
That team approach is evident in another dealmaker’s story, the Wenesco Group, where change was forced when the company’s majority owner died. Wenesco partner Kevin Woodside wanted to buy out his former partner’s spouse and at the same time merge with another entity. “There was a loss of the face of the firm,” said Chris Kelleher of investment banking firm Auspex Capital, who engineered the deal, “but the guts of the firm were still there.” Woodside “would sit with the bankers and he knew every detail of every store.” You will want to read every last word of Dealmakers coverage. I learned a lot, and you will, too.
We also have our Legal Eagles feature, an annual listing of the best and brightest in franchise legal circles. Not only are they featured, they give their best advice and predictions for upcoming trends in franchising. It’s good to know advisors who can help steer the ship.
As I write this, the baseball season has been delayed and the NBA season suspended, so people like my sports-loving husband are going to have to find their inspiring stories from another source. He may not quote franchise stats to the future “pests” he coaches, but we can all learn about tenacity, keeping your eye on the ball and rebounding from the many superstars in franchising.