Multi-Unit Restaurants Deals: Management Fee Structuring 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.
Management Fee Structuring on multi-unit restaurants deals is one of those workstreams that looks routine on a checklist and decides outcomes in practice.
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 Management Fee Structuring actually gets structured.
Set the fee at 2 percent of invested capital, stepping to 1.5 percent after year three.
Carve out portfolio-company services so add-on diligence is reimbursable.
Allow accrual if cash flow does not support payment, with later cash catch-up.
Make the fee subordinate to debt service, not to LP preferred return.
In multi-unit restaurants, layer in franchisor LOI letter requested before market as part of the Management Fee Structuring workstream.
Pricing the fee on enterprise value instead of invested capital. EV-based fees punish you on the first add-on.
"The management fee pays for the firm. Underprice it and you will run a hobby, not a platform."Jason Powell · Management Fee Structuring
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
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…
Equity Rollover for Multi-Unit Restaurants
The portion of seller proceeds reinvested into the post-close entity, aligning seller with buyer.
Earnout Structures for Multi-Unit Restaurants
Deferred purchase price contingent on post-close performance, used to bridge buyer-seller valuation gaps.
Management Fee Structuring for Healthcare Services
roll-up of physician practices and ancillary service lines
Management Fee Structuring for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
Management Fee Structuring 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.