The Transaction:
Carr, Riggs & Ingram Capital Advisors (CRI Capital Advisors) acting as the sole investment banking advisors, assisted two owners of Sonny’s BBQ franchises with the sale of their combined nine franchised locations. While the two parties owned separate franchise groups, CRI Capital Advisors helped the owners increase their value by combining their properties and selling to Argonne Capital Group, LLC.
The Company:
Sonny’s BBQ was founded in 1968 by Floyd “Sonny” Tillman in Gainesville, FL. Bob Yarmuth purchased the company in 1991 and continued to expand its operations. Sonny’s now includes more than 100 locations across the southeastern United States with a reputation of serving and catering authentic southern-style barbecue.
CRI Capital Advisors was initially approached by Sonny’s BBQ franchisees Bryan and Denise Smith, who expressed interest in the sale of their five Sonny’s BBQ locations. CRI’s initial research determined that a valuation premium may be achieved if eight to ten locations were grouped and sold simultaneously. Bryan and Denise reached out to Rick Thomas, a separate franchisee, who had previously discussed interest in selling his four Sonny’s locations. Both franchisees engaged CRI Capital Advisors separately, but chose to have them represent the sale of all nine locations as a portfolio.
The Objectives:
Although both franchise owners were passionate about the business that they had built, and were vested in the future of the employees, both parties’ primary decision-making factor was to secure their plan for retirement. The franchisees had spent years managing their locations and were ready to make the transition out of the restaurant business. With a target valuation in mind, CRI Capital Advisors identified four essential elements that would make this deal successful:
Strategically represent the interests of two unrelated ownership groups during this simultaneous transaction.
Achieve best possible total valuation for the combined portfolio of locations that would allow for all owners to smoothly transition into retirement.
Properly allocate that value across multiple ownership entities based on store-level statistics, financial performance, and real property values.
Navigate the appropriate channels with each franchisor to obtain not only consent but also the enthusiastic support of the proposed transaction.
The Outcome:
CRI Capital Advisors chose to aggressively market all locations for sale as a single investment portfolio. Multiple offers were received for the purchase all nine Sonny’s locations. CRI Capital Advisors advised the franchisees on the offers that would provide the best result for the owners. The final decision was to accept the offer received from Argonne Capital Group. CRI Capital Advisors expertly navigated simultaneous closing processes on behalf of both clients, while selling each location as a single portfolio.