Multi-Unit Franchisee Magazine Issue I, 2015 | Page 51

FUND-AMENTAL CHANGE?
really participated on the franchisor side
because there really haven’t been many
avenues to do that. The only ones available were: 1) if your franchisor was one of
the few that was public, you could go out
and buy shares, and 2) a few franchisees
have actually purchased a franchisor. But
no one had really found a vehicle where
multiple multi-unit franchisees could have
an investment strategy. We’ve also identified that as a gap, and this fund is evidence
that, because of its popularity and its support for multi-unit franchisees, there was
pent-up demand there. So we solved that
problem as well.
The third thing is that there are challenges in franchise development, and a
lot of brands are struggling to identify
qualified franchisees.
How is this fund different? The
idea for the fund is to provide superior
return rates for the investors, as well as
for potential franchisees of the brands we
acquire. We’re doing it for both. That’s
what makes us different. Most funds normally are looking out primarily for their
investors. As I’ve said many times before,
if you look at franchising objectively,
there are diametrically opposed goals: the
franchisor makes money off the top line
and the franchisee makes money off the
bottom line, and those are not always in
sync. We’re looking out for our investors
and we’re going to give them a superior
return, but not at the expense of our franchisees. That’s not going to happen, and
that’s not what our franchisee investors
expect. Whether some of them happen to
be limited partners in the fund, and others happen to be franchisees of a brand
the fund buys, at the end of the day we’re
all franchisees.
Who are the investors? There are
almost 40 investors who operate a total of
at least 1,500 units. Most are multi-unit
franchisees, but some are individuals with
high net worth who may not be franchisees
but may have other holdings in franchising. Therefore our fund has the breadth
of the contact network of all our limited
partners, which extends to thousands of
franchisees. So when we invest in a brand,
our marketing is essentially internal. We

can just go to our investor base, and if
they want to develop (or if they don’t,
for whatever reason), they have access to
many franchisees in their network who
would be supportive of a brand that their
friend was a part owner in. For a lot of
multi-unit franchisees, the best source of
advice on franchise development is from
referrals from existing franchisees.
Why invest in the fund? First is diversification. If you’re in franchising as a
multi-unit franchisee and have built your
enterprise by paying royalties, it’s a very

R

INVESTORS SHARE THEIR THOUGHTS:
ROB BRANCA

ob Branca is a Dunkin’ Donuts franchisee based in Central Massachusetts
who operates more than 70 units.
• Why we invested. First, the investment idea is a sound one, and it’s in a space
we understa