Why private equity likes restaurant franchisees

Why should franchisees take private-equity investments?

This week’s episode of the Restaurant Business podcast A Deeper Dive features Mike Esposito, the cofounder of Franchise Equity Partners.

Franchise Equity Partners is a private-equity firm specializing in the franchise business. Mike helped found the firm in 2021 to invest in all kinds of franchisees. Before that he had an extensive career in investment banking, working 20 years with Goldman Sachs. He is also a Jersey Mike’s franchisee.

We talked with Mike about the state of the restaurant business, mergers and acquisitions and other issues, and the result was an extensive, interesting conversation about what kinds of investments work these days and what do not.

We talk about the necessity of restaurants’ value push and the impact it could have on margins. We talk about the kinds of concepts that have distanced themselves in today’s markets and how you can know whether an emerging chain has legs or not.

And we also ask why a private-equity investment is a good idea for certain franchisees.

But the biggest question we ask him is whether he is buying or not. His answer to that question is instructive.

It’s a wide-ranging discussion on A Deeper Dive, so please check it out.