Capitalizing on favorable market conditions, Evening Star, Inc., completed a deal with GE Capital Solutions, Franchise Finance that enabled it to purchase Zebb’s Deluxe Grill & Bar brand, a casual dining concept in upstate New York that operates five units. The lender funded $7.2 million through a business enterprise loan and sale-leaseback on four properties.
“We worked with Evening Star to incorporate a sale-leaseback into the deal, allowing them to leverage the value of their real estate,” says Paul Cantieri, vice president, GE Capital Solutions, Franchise Finance. “We saw it as an opportunity to provide Evening Star with resources to acquire and grow the Zebb’s brand, and we were able to meet their needs in one transaction.”
The deal is another in a long line of sale-leaseback transactions funded by GE Capital Solutions, Franchise Finance. Existing market conditions make sale-leasebacks an effective method of financing, providing business owners the opportunity to free up capital at favorable rates to grow their business. Analysts predict sale-leasebacks to be a popular financing tool well into 2007.
Rochester, N.Y.-based Evening Star was formed in late 2006 by Brian Bergeron and Kent Schmidt, a pair of existing Papa John’s and Hardee’s franchisee owners. The company was incorporated with the express purpose of purchasing the Zebb’s concept and its locations in New Hartford, Mattydale, Amherst, Orchard Park, and Brighton (all of N.Y.).
“Having worked with GE Capital Solutions, Franchise Finance in the past, we knew they could provide a flexible financing package that met our needs,” says Bergeron. “We needed funding for only four of our properties and they didn’t disappoint. In fact, they were a great resource, acting as a one-stop shop so we could complete the loan and sale-leaseback.”
The transaction allows Evening Star to preserve its capital for future growth opportunities.
GE Capital Solutions, Franchise Finance offers three-store and larger independent chain customers a variety of financing solutions, providing funds for new construction, acquisitions, refinancing, reimaging, and more.