Multi-Unit Restaurants Deals: Representation & Warranty Insurance Done Right
When the deal is multi-unit restaurants and the question is Representation & Warranty Insurance, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Representation & Warranty Insurance 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 Representation & Warranty Insurance actually gets structured.
Get to non-binding indication within two weeks of LOI sign, with carrier diligence to follow.
Negotiate retention to 0.5 percent of EV, dropping to 0.25 percent after 12 months.
Confirm policy follows form on the purchase agreement, not the other way around.
Carve out tax indemnities and known liabilities, priced separately if needed.
In multi-unit restaurants, layer in franchisor LOI letter requested before market as part of the Representation & Warranty Insurance workstream.
Treating R&W as a commodity. Carrier appetite varies sharply by industry and deal size.
"R&W is no longer optional on most independent sponsor deals over $20M. Price it into the LOI."Jason Powell · Representation & Warranty Insurance
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.
Transaction Fee Structuring for Multi-Unit Restaurants
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for Multi-Unit Restaurants
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Indemnification for Multi-Unit Restaurants
The seller's contractual promise to compensate the buyer for breaches of representations, covenants, and spec…
Quality of Earnings for Multi-Unit Restaurants
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
Representation & Warranty Insurance for Healthcare Services
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Representation & Warranty Insurance for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a multi-unit restaurants target, and a Representation & Warranty Insurance question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.