With the restaurant industry being highly competitive, getting financial support from seasoned restaurant investment groups can make a big difference in the success of a restaurant concept. However, not all restaurant investors are created equal. Finding the best restaurant investment groups requires thorough research and analysis of factors like their past investments, typical deal terms, added value, and portfolio performance. This article will provide insights and tips on how restaurant operators and entrepreneurs can identify the top restaurant investment groups that are the best fit for their growth needs.
Assess investment focus and criteria
The first step is understanding the investment philosophy and criteria of the restaurant investment group. What types of restaurant concepts do they focus on – fast casual, full service, emerging brands? What markets or geographies are they most active in? Do they prefer multi-unit growth opportunities or single-location investments? Examining their past investments will reveal useful patterns. Also look for investor groups whose criteria aligns well with your restaurant concept and growth strategy.
Evaluate deal terms and value-added support
Beyond just capital, the ideal restaurant investor provides meaningful value-adds like industry expertise, unit growth support, and operations guidance. Analyze the typical deal terms offered – do they seem founder-friendly or overly dilutive? What governance rights do they require? Assess the level of post-investment support provided in areas like real estate, marketing, HR, and supply chain. The best restaurant investment groups are true partners that enable growth.
Research portfolio performance and exits
The track record of an investor’s portfolio says a lot about their capabilities. Try to assess metrics like same-store sales growth, unit expansion rate, and profitability for their existing investments. Also look for successful exits they have executed via M&A, PE sales, or IPOs. Higher performing portfolios indicate the investor provides meaningful value to their brands beyond just capital.
Prioritize local investors for geographic synergies
For restaurant brands with a geographic concentration in certain markets, local restaurant investors can provide invaluable benefits. They will possess in-depth knowledge of regional consumer tastes, local vendor relationships, and real estate opportunities. This can greatly aid successful expansion and operations in those territories. So restaurant brands should place high priority on investor groups with a strong regional presence in their key locales.
Identifying the best restaurant investment groups requires thorough due diligence across factors like sector focus, deal terms, value-added services, portfolio performance, and geographic synergies. Aligning with the right capital partner can greatly accelerate a restaurant brand’s growth and success. But it is crucial to take the time to find the investor that offers the ideal fit.