Focus Brands' largest franchisee is on the cusp of becoming a lot bigger.
The Miami-based Fresh Dining Concepts, which owns approximately 160 Auntie Anne's, Carvel, Cinnabon, and Jamba locations in 17 states and Washington, D.C., received a $44 million capital injection from Franchise Equity Partners, a relatively new private investment firm looking to provide finances to growing franchise businesses. True to the company's philosophy, the multi-million-dollar investment is a minority stake and permanent in nature.
The $44 million will be used to continue M&A and supplement new store development.
“This new funding is a major milestone in furthering our aggressive growth strategy. In the last year, we’ve pursued our plans and added more than 100 units to our portfolio. We feel like the team at Franchise Equity Partners and our organization share a lot of the same perspective, making this a perfect fit,” Fresh Dining Concepts CEO Luis San Miguel said in a statement. “The fresh line of funding provides a pathway to build our franchise collection with additional high-performing concepts, while diversifying even further.”
Since April 2021, Fresh Dining Concepts has expand from 50 to 160 locations primarily through six acquisitions, including the purchase of 73 Auntie Anne's units on the West Coast and nine Auntie Anne's stores throughout the Washington, D.C. market. In terms of organic development, in late 2021, the operator agreed to develop 10 co-branded Auntie Anne’s and Cinnabon locations in New York City over the next four years. More recently it opened a Auntie Anne's/Jamba co-brand restaurant in Palm Beach, Florida, and debuted a Long Island-based Cinnabon location. The operator holds a presence in roughly a dozen DMAs across the East Coast, Midwest, West Coast, and Texas, and its stores are based in streestide outlets, malls and other nontraditional environments, and inline shopping centers.
Franchise Equity Partners announced its official launch in November, with aspirations of a $1 billion portfolio. The firm is led by co-founders and managing partners Michael Esposito and Scott Romanoff, who both spent nearly 30 years at Goldman Sachs in the investment banking division. In addition to chain restaurants, the company is looking to partner with auto dealerships, beverage distribution, consumer and business services, and heavy equipment dealers. Each investment will be between 20 percent to 49.9 percent.
Fresh Dining Concepts is Franchise Equity Partners' second investment since rolling out last year.
“Our goal at Franchise Equity Partners is to identify the best of the best when it comes to owner-operators in franchising, and Fresh Dining Concepts hits the mark,” Esposito said in a statement. “Luis and his team have been able to build a great portfolio and we are excited to partner with them to continue growing Fresh Dining Concepts.”