RBS Citizens leads $98 million financing for Yum! franchisee

Since the end of the white-hot deal market we all witnessed during the fourth quarter, mainly fueled by operators taking advantage of tax laws expiring at the end of year, 2013’s first quarter seems to be a tame one in comparison. Most of the big deals were already done. But we’re seeing activity pick up in the second quarter with signs the fall could be hot and heavy.

Nothing says that like a gigantic deal closing a lá the Border Foods transaction recently completed: $98 million. Border Foods is one of the largest YUM! Brands franchisees, with about 175 restaurants and $175 million in sales each year.

RBS Citizens Franchise Finance lead the deal as sole lead arranger, book runner and administrative agent. Other lenders include BMO Harris Bank as documentation agent and City National Bank.

The transaction includes a $75.8 million term loan to refinance existing debt, a $17.2 million development line of credit that will be used to reimage existing locations and to finance potential real estate purchases, and a $5 million revolving line of credit to be used for working capital.

According to Dave Farwell, head of franchise finance for RBS Citizens, Border Foods could have had their pick of finance companies—and there is more competition to pick from, with new entrants continuing to arrive in the marketplace.

Having more finance companies in the mix competing for the business is a good thing, said Farwell. “We have to be on our toes more than we’ve ever been. We have to bring good ideas. We can’t just take something off the shelf and apply it to everyone. We had to up our game and convince them we were the right partner.”


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About This Blog

News, notes and commentary on franchise financing, including SBA lending, both the SBA 7(a) program and the SBA 504 program, franchise finance programs, development incentives, big deals and startup lending.

  Mary Jo Larson is the publisher of Franchise Times Magazine and its sister publication, the Restaurant Finance Monitor. She is a frequent speaker at meetings and conferences, and at the Restaurant Finance & Development Conference. You can find her on Twitter at @mlarson1011.
  Reporter Jonathan Maze covers restaurants and finance for Franchise Times. He also writes for our sister publication, The Restaurant Finance Monitor, and writes a daily blog on the restaurant industry at www.restfinance.com. You can also catch him on Twitter at @jonathanmaze.




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