Franchise Equity Partners
Where Are They Now? Robert Daniel
Article in Franchise Times by Mary Jo Larson, February 2022
“This is so complementary to what I did all those years-providing capital to good operators,” said Robert Daniel. “I looked at a lot of other opportunities, but this is the one I got most excited about, because it is so differentiated and compelling. I really like the alignment with the operators-providing capital and growing alongside them."
Daniel, who headed up the restaurant finance group at Regions Bank through December 2020, is now a partner leading the restaurant efforts for Franchise Equity Partners (FEP), a new fund that will make minority investments in restaurant franchisees, as well as other franchising verticals. The fund is the brainchild of Goldman Sachs investment banking alums Mike Esposito and Scott Romanoff.
Franchise Equity Partners is looking to invest a minimum of $25 million dollars with larger operators, those that have more than 50 locations. Funded by an alternative capital provider, it is targeting an initial deployment of $500 million in capital, which can be upsized to $1 billion when the need arises.
Key to their plan is having no specific required payments or coupon related to their investments. They earn a dividend as the operator performs and the company pays dividends. So as Daniel said, FEP’s goals align with the operators.
For the operator, this allows them to make decisions for the future without thinking about their investor having to exit in a five to seven year window, as is the case with most PE investments.
The firm will focus on making investments in other sectors, such as health and beauty franchises, automotive dealers and beverage distributors, with each silo having its own leader, like Daniel. His resume includes tenor with other restaurant finance powerhouses – Bank of America and the former GE Capital Franchise Finance.
“No one else is doing non-control investments as a core competency,” said Daniel. “The alignment with the restaurant operator is such a key part of our business plan. Our capital is designed to be minority, passive and permanent.”