In addition to financial capital, restaurant companies should consider the intellectual capital of the buyer when negotiating a transaction. Private equity firms with a proven track record in the hospitality space can use their knowledge of the industry and their operational expertise to help accelerate growth.
Cindy McLoughlin, CohnReznick’s hospitality industry practice leader, thinks that best-of-class restaurant companies will continue to fetch healthy valuations. Those restaurants with a scalable concept and talented management team that pays plenty of attention to culture, technology and the customer will capture the interest of investors.
McLoughlin advises restaurant clients to take meetings with prospective investors whether there is a near- or longer-term interest in a transaction. The meetings are great learning tools and there is no substitute for developing relationships with the investment community.