Rob Lauer in Law360: Franchise Dining Deals Get Supersized in Development Boom

04/22/2014


Pent-up private equity, increasing development demands from restaurant brands and a sweet spot in the real estate cycle are all helping to fuel large-scale, multi-unit franchise development deals, experts say.

Several key market factors — including brands increasingly searching for financially sophisticated companies to partner with and a real estate boom creating new demand for restaurants — has the franchise dining sector jumping with multi-unit development deals, experts say. And operators, many with private equity cash to burn, are heeding the call...

Over the last few months, the sector has seen many brands announce development deals for more than 10 units with one single franchisee. For example, last month Dunkin' Brands Group Inc.-owned company signed a development agreement with current franchisee Sizzling Donuts LLC to bring as many as 46 new units to California. And earlier this year, Dickey's Barbecue Restaurants Inc. inked a deal with a developer group led by former Kentucky Fried Chicken Corp. franchisees to build up to 100 new units, also in California.

The deals are in part the result of an upswing in the commercial real estate sector in general, which is creating a greater opportunity and need for restaurants in or around new office, retail or mixed-use projects, according to Rob Lauer, a partner in Haynes and Boone, LLP's franchise and distribution group.

Excerpted from Law360, April 22, 2014. To view full article, click here (subscription required).

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