Global Franchise Group is eyeing possible acquisition opportunities with its sale earlier this month to two private-equity firms.
Los Angeles-based Levine Leichtman Capital Partners closed Nov. 19 on its sale of the Atlanta-based GFG Holding Inc. to two private-equity partners: London-based Lion Capital LLP and Toronto-based Serruya Private Equity Inc.
Terms of the deal were not disclosed.
Global Franchise Group holds such brands as Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery/MaggieMoo’s, Pretzelmaker and Round Table Pizza.
“It’s been a long process,” said Chris Dull, president and CEO of Global Franchise Group, in an interview Thursday. “It kicked off at the end of February, so it took some time to manifest itself into a transaction.”
Global Franchise Group was created in 2010 when Levine Leichtman bought the original franchised brands from NexCen Brands Inc. for $112.5 million.
“In the private-equity world, that was a long hold,” Dull said.
GFG has 1,485 locations among all its brands, including Great American Cookies at 379 units and Marble Slab Creamery at 346 stores. Pretzelmaker has 225 stores, and Hot Dog on a Stick has 75 locations.
The new owners bring “a great deal of experience in the franchising space,” Dull said.
Michael Serruya and his brother, Aaron Serruya, founded the Yogen Früz frozen yogurt chain in Canada in the mid-1980s. They acquired a controlling interest in Scottsdale, Ariz.-based Kahala Brands Ltd. in 2013, bringing such brands as Cold Stone Creamery and Blimpie under the Serruya umbrella.
They sold Kahala to MTY Food Group Inc., a publicly traded Canadian company, in June 2016 for about $310 million.
“Having Michael Serruya in the game with his connections and know-how as it relates to franchising is a real value-add for GFG,” Dull said.
Lion Capital, which holds private-equity investments in a wide variety of concepts that include Wagamama, has expertise in branding, Dull added.
“That aligns well with GFG,” said Dull, who has been GFG president and CEO since the Levine Leichtman acquisition in 2010 and was previously president of NexCen Brands.
“Both firms come to us with an aggressive strategy for acquisitions,” he added, “and we plan to build on that platform.”
Dull said the company is looking at possible acquisitions that could range from snack concepts to traditional quick-service, as well as concepts that share geography with existing brands, such as Round Table Pizza on the West Coast.
“We would not be opposed to looking at additional pizza concepts that are geographically differentiated,” he said, adding that brands could benefit from a shared supply chain.
GFG also owns a 45,000-square-foot facility in Atlanta where it manufactures and distributes cookie doughs and pretzel flour for its concepts.
“We’ll look at brands where we can leverage that manufacturing facility,” he said. “We think it’s a competitive advantage for the brands because it brings products at lower prices to our franchisees.”
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