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Tin Drum Acquisition Shows Difficulty When Buying from Founder


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Entrepreneurs do not like to give up equity, points out Scott Pressly, managing partner with Buckhead Investment Partners in Atlanta.

Yet his private equity firm recently bought two concepts, Tin Drum AsiaCafe and Tropical Smoothie, from their founders. He detailed the delicacy of that task in an interview as the year waned, and nominated the deals for the new Franchise Times Dealmakers project.

“Price was not a main topic of discussion. When you buy from a private equity firm, price and liquidity are the big issues. Here, it’s their baby; it’s their brand. They have to believe that I’m going to grow this with the ideas we can bring,” Pressly said.

Steven Chan is the founder of Tin Drum, and he’s an architecture major from Georgia Tech who had never had a partner before talking with Buckhead, Pressly said. “It took six months explaining” what Pressly would do for the brand before Chan would agree to sell a minority stake.

Buckhead bought a majority stake in Tropical Smoothie from the founders, and moved the headquarters to Atlanta. They are working to "professionalize" the company to allow for faster growth, Pressly said.

 

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 
Nancy WeingartnerNancy Weingartner is editor-at-large of Franchise Times magazine and the editor of the Food On Demand media project. You can reach her at 612-767-3200 or at nancyw@franchisetimes.com.
Follow her on Twitter at http://twitter.com/nanweingartner.
 

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