Recent news reveals Boost Juice is the latest Australian franchise brand to take on private equity in order to expand operations, selling a 70 per cent stake for around $65 million.

Boost Juice founders Janine and Jeff Allis, who will continue in the same roles, sold to US private equity firm, Riverside, which has stakes in other franchised businesses in America, and more than 70 businesses in total, globally.

The deal will provide the Boost Juice Group with international contacts, as well as the resources to continue to expand nationally and internationally, and to continue making acquisitions, like the recently acquired Salsa’s Fresh Mex Grill franchise network.

As Riverside Partner Simon Feiglin identified in Franchising, key things equity firms look for are:

• great systems;
• a great model; and
• great management team.

At the Australian National Franchise Convention in Perth last year, Dymocks CEO Don Grover identified similar qualities which attracted them to acquire the Healthy Habits franchise network.

So why are successful franchisors selling?

Having enough capital to expand is an issue faced by virtually all mature or maturing franchise businesses at some point.

While there are a few options available, which were outlined by Co-Founder of DG Capital Partners Adam Gallagher at our Franchise Forum 2009, bringing in private capital is one option.

The Coffee Club is another franchise brand which brought on private equity through a Thai consortium, a few years back.

At our Franchise Forum 2010 in June, The Coffee Club’s recently retired CEO, Rod Wakefield will discuss:

• the pros and cons of taking on private equity;
• what to expect; and
• how best to prepare.

Also speaking at the Forum is Franchise Advisory Centre Director Jason Gehrke.

Jason will discuss the trend towards corporatisation of franchising, and where he expects it to go in the future.

Jason said he expects recent buy-outs, like Cold Rock and Big Dad’s Pies being acquired by Retail Food Group in 2009, to continue.

Jason will also discuss the impact this will have on the franchise sector.

To find out more about the Franchise Forum click here.

The Franchise Forum is jointly hosted by the Asia-Pacific Centre for Franchising Excellence and the Franchise Advisory Centre.