Multi-Unit Restaurants Deals: Equity Rollover Done Right
Securities and M&A counsel for independent sponsors structuring multi-unit restaurants transactions, from LOI to close to the capital markets that open up afterward.
Every multi-unit restaurants acquisition has its own gravity. Equity Rollover is the workstream where independent sponsor counsel earns the seat.
The typical multi-unit restaurants platform sits at $8M to $80M EV with EBITDA in the $2M to $14M range. The thesis runs on franchisee roll-up or regional concept acquisition. The franchisor consent letter is the deal. Get it lined up before you spend money on diligence.
How Equity Rollover actually gets structured.
Anchor on 15 to 25 percent rollover for a clean alignment story.
Treat rollover as tax-deferred under Section 351 or 721 where the structure allows.
Document tag-along and drag-along rights at the rollover level, not just at the LP level.
Cap exit veto rights for rolled equity to avoid future deadlock.
In multi-unit restaurants, layer in franchisor LOI letter requested before market as part of the Equity Rollover workstream.
Rolling at the wrong entity level, triggering an immediate tax event on what was supposed to be deferred.
"Rollover is the cheapest alignment tool on the table. Use it; do not abuse it."Jason Powell · Equity Rollover
The deal is one thing. The capital that opens up after close is another.
Capital after close is where the IRR actually gets made. The right introductions at month nine through month thirty are where this practice works as hard as it does at the LOI.
Related deal pages.
LOI Negotiation for Multi-Unit Restaurants
The 4 to 8 page agreement that frames the deal economics, exclusivity, and diligence period.
Independent Sponsor Economics for Multi-Unit Restaurants
The package of deal-by-deal carry, management fees, and transaction fees that compensates the independent spo…
Management Fee Structuring for Multi-Unit Restaurants
The annual fee paid by the deal entity to the independent sponsor for ongoing oversight, board service, and p…
Earnout Structures for Multi-Unit Restaurants
Deferred purchase price contingent on post-close performance, used to bridge buyer-seller valuation gaps.
Equity Rollover for Healthcare Services
roll-up of physician practices and ancillary service lines
Equity Rollover for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
Equity Rollover for Multi-Unit Restaurants, on independent sponsor terms.
Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.