Deal Breakers for Investors Looking to Acquire Franchise Systems
Corporate / M&A Law, Franchise & Distribution Law

10 Potential Deal Breakers for Sophisticated Investors Looking to Acquire Franchise Systems

The investment community has been increasingly interested in franchise systems as potential targets. They present a valuable investment proposition for strategic and financial investors. The appeal of robust, long-term, and diversified royalty income streams, proven business concepts, potential for scalability and expansion, shared expansion costs (i.e. with franchisees), and the goodwill and strength of an established brand has caught the attention of private equity funds, family offices, and other sophisticated acquirers. The strategy and structure of investments is also becoming more creative and flexible as investors get more comfortable with the franchise business model, including investments at the master franchise level, and aggregation of brands in the same industry (or similar industries) to achieve economies of scale. However, sophisticated acquirers (as many know), explore, consider, and pass on far more opportunities than they take up. So what are the critical franchise specific considerations that raise red flags for sophisticated investors looking to acquire a franchise system?

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Franchise Times Legal Eagle
Franchise & Distribution Law

Andrae Marrocco named a 2018 Franchise Times Legal Eagle

Andrae Marrocco, Partner in the Toronto office of cross border law firm Dickinson Wright, has been selected as a 2018 Legal Eagle by Franchise Times. The annual list of Franchise Times Legal Eagles recognizes the best attorneys in franchising (across the US and Canada) as nominated by their clients and peers, and selected by the editorial board after additional research by Franchise TimesContinue reading

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Franchise & Distribution Law

International Comparative Legal Guide – Franchise 2018 – Q&A Chapter on Franchising in Canada

ICLG 2018In Canada, six of the 13 provinces and territories have adopted franchise specific legislation: Alberta; British Columbia; Manitoba; New Brunswick; Ontario; and Prince Edward Island. Each provincial franchise statute defines a ‘franchise’ in a similar manner to include the following key elements: the grant of a right to sell or distribute the goods and services of the franchisor in return for (indirect or direct) payment or ongoing payments where: Continue reading

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Doing Business in Canada
Corporate / M&A Law, Franchise & Distribution Law

Doing Business in Canada Series – Part 5: Securities Law and Corporate Governance in Canada

Securities Law

Canada has a sophisticated capital markets system. Securities of both Canadian and foreign public companies can be listed and traded on several of Canada’s stock exchanges. The largest stock exchange in Canada is the Toronto Stock Exchange (TSX). Continue reading

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Corporate / M&A Law, Franchise & Distribution Law

Getting the Deal Through – Franchise 2018 – Franchise M&A

Franchise 2018 GTDTFranchise systems present a valuable investment proposition for both strategic and financial investors. The franchise business model as an expansion strategy has been on the rise across the globe for many years, and its growth together with its contributions to national gross domestic product (GDP) and job creation have outperformed other sectors and business models. Moreover, franchise systems have progressed well beyond traditional quick service restaurants to many other industries and sectors. Unsurprisingly, franchise businesses have increasingly become a focus for M&A deals, some of them large and complex. Take, for example, the recent Burger King C$14.6 billion acquisition and tax inversion involving Tim Hortons. Continue reading

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Corporate / M&A Law, Franchise & Distribution Law

Getting the Deal Through – Mergers & Acquisitions 2017 – Franchise M&A

GTDT Mergers & AcquisitionsFranchise systems present a valuable investment proposition for both strategic and financial investors. The franchise business model as an expansion strategy has been on the rise across the globe for many years, and its growth together with its contributions to national gross domestic product (GDP) and job creation have outperformed other sectors and business models. Moreover, franchise systems have progressed well beyond traditional quick service restaurants to many other industries and sectors. Unsurprisingly, franchise businesses have increasingly become a focus for M&A deals, some of them large and complex. Take, for example, the recent Burger King C$14.6 billion acquisition and tax inversion involving Tim Hortons. Continue reading

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