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Movers & Shakers
Roark Closes $1 Billion Investment Fund, Sees Franchise Opportunities
Roark Capital has closed its Investment Fund II and now has $1.004 billion to invest, the company announced. Over the past few years, Roark Capital has become a significant player in the franchise industry through the purchase of numerous national and regional franchise brands: Ace Mortgage Funding, Batteries Plus, FASTSIGNS, McAlister's Deli, Money Mailer, and FOCUS Brands (Carvel, Cinnabon, Moe's Southwest Grill, Seattle's Best Intl., and Schlotzsky's).
Roark utilizes a combination of capital from its equity funds and capital from the debt markets to fund its acquisitions. While acknowledging that 'turmoil in the debt markets has caused the availability of debt monies to decline and the cost of debt financing to rise,' Neal Aronson, Roark managing partner, nonetheless said that the firm is in a strong position.
'We are long-term holders of companies, and we utilize significantly less leverage than is typical for the private equity industry,' he told FBLA. 'As a result, and when combined with $1 billion of additional equity capital to invest, the turmoil in the debt markets will not impact our strong interest in franchise companies or our ability to close transactions.'
Roark plans to invest Fund II over the next three to five years.
Although confident about the future of franchising, Aronson said that issues such as tax nexus ' the effort by individual states to tax a franchisor for activities of a franchisee within that state ' are having a negative impact on the industry as a whole. 'Increased taxation can hurt the ability of franchise companies to attract capital and to grow,' Aronson said. 'Since I believe that franchising has provided a significant amount of job growth and tax revenue growth naturally, I am very troubled to see states doing things that will hurt the franchise industry and ultimately their own economies.'
Roark Closes $1 Billion Investment Fund, Sees Franchise Opportunities
Roark Capital has closed its Investment Fund II and now has $1.004 billion to invest, the company announced. Over the past few years, Roark Capital has become a significant player in the franchise industry through the purchase of numerous national and regional franchise brands: Ace Mortgage Funding, Batteries Plus, FASTSIGNS, McAlister's Deli, Money Mailer, and FOCUS Brands (Carvel, Cinnabon, Moe's Southwest Grill, Seattle's Best Intl., and Schlotzsky's).
Roark utilizes a combination of capital from its equity funds and capital from the debt markets to fund its acquisitions. While acknowledging that 'turmoil in the debt markets has caused the availability of debt monies to decline and the cost of debt financing to rise,' Neal Aronson, Roark managing partner, nonetheless said that the firm is in a strong position.
'We are long-term holders of companies, and we utilize significantly less leverage than is typical for the private equity industry,' he told FBLA. 'As a result, and when combined with $1 billion of additional equity capital to invest, the turmoil in the debt markets will not impact our strong interest in franchise companies or our ability to close transactions.'
Roark plans to invest Fund II over the next three to five years.
Although confident about the future of franchising, Aronson said that issues such as tax nexus ' the effort by individual states to tax a franchisor for activities of a franchisee within that state ' are having a negative impact on the industry as a whole. 'Increased taxation can hurt the ability of franchise companies to attract capital and to grow,' Aronson said. 'Since I believe that franchising has provided a significant amount of job growth and tax revenue growth naturally, I am very troubled to see states doing things that will hurt the franchise industry and ultimately their own economies.'
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