Non-Restaurant Franchising

By Rick Ormsby
Managing Director
502-252-6422
[email protected]

I have been a restaurant franchise guy for over 15 years. And until recently for me, it has been restaurant franchising and everything else as a distant second.

In the past few months, however, I have had several conversations with industry insiders and private equity funds that are urging me to consider that the future growth in franchising is outside of restaurants. They contend that restaurant competition is just too much – there is a new concept on every street corner, and organic industry growth is almost nil.

In non-restaurant franchising, however, there appears to be several pockets of tremendous growth potential. Planet Fitness is a darling in the current market, and Unbridled Capital is starting to put dedicated efforts toward developing deep expertise in that brand. Their unit economics are phenomenal in many cases, and their business model does not have the intense level of competition seen in restaurant franchising.

As a matter of fact, the entire franchise fitness industry appears to be growing – whether by 1-2 unit operators or larger, private equity-focused investors. Labor costs are much lower, and the quality of employee is much different. As an industry insider, I can tell you that non-restaurant franchisees generally appear to be happier people with less stress!

Roark Capital evidently sees the same thing – they recently acquired Massage Envy with plans to accelerate its growth. I also have a good buddy whose PE fund owns a tax franchise – they love the unit economics and growth opportunities.

I have another friend from the Naval Academy and a yet another in Louisville who own cleaning franchises. Both seem to be happy with their investments and prospects for the future.

It will be goal of Unbridled Capital to capture deep and meaningful relationships in non-restaurant franchise brands. We think non-restaurant franchising will eventually attract the eyes and wallets of larger, growth-oriented capital.

We believe there is substantial room for growth through development and acquisition, and we see mispricing opportunities nationwide until this segment of franchising gets more attention and consideration on a larger stage. Call us anytime for further perspective or to get plugged into these types of deals, investments or to find a competitive lender in these brands.

Rick Ormsby
Managing Director
502-252-6422
[email protected]