Ace Hardware, No. 5 on the Franchise Times Top 200+ ranking, is known for its 4,500-plus retail stores across the United States. Early next year it will roll out Ace Handyman Services, the new name for Handyman Matters, which Ace acquired in September.
First comes a rebrand for Handyman Matters, with 57 franchisees across 23 states. Ace CEO and President John Venhuizen figures there is massive room for more units, and he cites early interest from about 50 current Ace Hardware operators who want to add a service offering, plus Handyman Matters operators who like the idea of being nearby Ace Hardware stores to eliminate those time-consuming supply runs.
Ace Handyman Services franchisees will get access to customer leads at the stores as well as preferred rates on supplies. "It’s a nice strategic fit for us, we believe," said Venhuizen in an interview.
Although he declined to give a number as to how many units of the new brand Ace expects to sell, he said, "The opportunity is significant. Right now those 57 franchisees really only cover about 10 percent of the United States households, whereas our retail base covers 85 percent. We don’t want to set numeric goals. There’s easily 10 times the number" than are open now.
The founder of Handyman Matters, Andy Bell, will continue to be the CEO. "I hope he stays until he’s a hundred years old. We like what they’re doing," said Venhuizen. "The reasons we were interested, we really liked their system and their training, and it’s scalable."
Although Ace Hardware was founded in 1924, this will be the first time it will operate a franchise in the traditional mode. "It’s interesting, that’s a little new to us," he said. "In the United States we don’t charge our franchisees any royalties or fees, it’s a different model."
Average unit volume at Handyman Matters was $868,000 for the top quartile of operators and $488,000 for the second quartile. The franchise fee is $20,000; the territory fee is $35,000 to $40,000; and other costs of investment range from $91,000 to $137,000, according to the franchise disclosure document.
Beth Ewen reports mergers and acquisitions news in the franchise space in the monthly Dealmakers e-newsletter. Sign up at Franchisetimes.com/e-newsletter.
Jimmy John’s final exit, plus more audacious deals
The last time we talked with Jimmy John Liautaud, founder of the eponymous sandwich chain, he was on stage at the Franchise Times Dealmakers event in 2017 after selling a majority stake to Roark Capital for a cool $1 billion. Now he’s out completely, scooped up by Inspire Brands. Other recent movers and shakers range from Home Franchise Concepts to Huddle House and beyond.
- Pivotal Growth Partners added Jeremiah’s Italian Ice, a Florida-based frozen treats franchise, to its portfolio, which also includes Vitality Bowls and Conrad’s Grill. Launched in 2018 by Bryon Stephens and Cameron Cummins, Pivotal Growth Partners targets brands below $5 million in EBITDA or gross income and works to help them grow to attract private equity investment. Jeremy Litwack founded Jeremiah’s Italian Ice, with 23 locations, in 1996.
- Private equity firm Trilantic North America sold its majority stake in Home Franchise Concepts, a home improvement goods and services brand, to JM Family Enterprises, which ranks No. 21 on Forbes’ list of America’s Largest Private Companies. Trilantic acquired HFC in 2015 to support the company’s growth strategies, expand its core franchise base and service concepts and further invest in its operating platform. The firm also elevated HFC’s then-CFO, Shirin Behzadi, to her current role as chief executive officer. Harris Williams was the financial adviser to HFC and Kirkland & Ellis provided legal advice.
- MarshallMorgan completed the sale of the Eastlake Foods Michigan KFC market, including both business and real estate assets, to Pac Management of Michigan, a wholly owned subsidiary of the Kirmani Group that owns and operates 16 KFC restaurants in two Northeastern states. Kirmani Realty of Michigan, an affiliate of Pac Management, purchased the real estate assets.
- JunkLuggers attracted Contractor Nation as a minority shareholder, marking the first private equity investment for the sustainable junk-hauling franchise and its founder, Josh Cohen. The deal will allow access to expanded sales and marketing capabilities, professional development and training modules, among other assets.
- Puroclean’s CEO and Chairman Mark Davis and Vice Chairman Frank Torre are now 100 percent owners of the restoration and remediation franchise, completing a four-year overhaul of the brand since they became majority owners in 2015.
- WKS Restaurant Group acquired 94 Denny’s locations previously owned by QK Holdings, making WKS the largest franchisee in the Denny’s system with 127 locations across 10 states. Founded by Roland Spongberg in 1987, WKS Restaurant Group began with one El Pollo Loco location and 25 team members in Long Beach, California.
- Premium Service Brands bought Kitchen Wise, a kitchen, bathroom and pantry organization company with locations predominantly in the Midwest. It’s the second acquisition following the purchase of Maid Right for the firm’s founder, CEO Paul Flick, who also started three other companies under the brand’s umbrella: 360 Painting, ProLift Garage Doors and Handyman Pro.
- Inspire Brands, the parent company of Arby’s, Buffalo Wild Wings and Sonic, will acquire Jimmy John’s Sandwiches from Roark Capital Group, which bought Jimmy John’s in 2016. Following completion of the deal, Inspire will be the fourth-largest restaurant company in the United States with more than $14 billion in annual sales and more than 11,200 restaurants in 16 countries.
- Best Life Brands acquired Blue Moon Estate Sales, the estate sale franchise with 22 locations, marking the third brand on the parent company’s roster along with ComForCare and CarePatrol.
- Unbridled Capital provided sell-side advisory services to Papa John’s USA on the refranchising sale of 19 locations in the Macon, Georgia, area. The market was sold to existing franchisee Paul Passafiume and related entities.
- Huddle House is buying Perkins Restaurant & Bakery, which filed for Chapter 11 bankruptcy protection in August, in a deal expected to close in October. Huddle House CEO Michael Abt will helm both brands, and there are no plans to convert any existing Perkins to Huddle Houses or vice versa, the company said.
- Dennis McKinley of Detroit Equities and Greg George of Rising Phoenix Group closed a deal to form Empire Franchise Group. In this agreement, they will acquire 100 percent of Franchise Genies, the franchise development company owned by George. Rising Phoenix will invest in current Detroit Equities brands and together they will develop corporately own brands and will also seek to acquire brands under five units. The deal will bring 12 brands under their management umbrella, including Roll On In Sushi Burritos & Bowls, Buzzed Bull Creamery and Carolina Hemp Company.
- iCRYO Cryotherapy attracted experienced franchise owners and operators Joseph Pepe Sr. and Matthew Pepe as equity partners. Joseph Pepe is one of the first Planet Fitness franchise owners, owning 34 locations before selling in 2017 and entering the cryotherapy niche.