In a move poised to make waves across the franchise industry, Flynn Group, renowned as the world’s largest operator of restaurant and fitness club franchises, is reportedly considering a majority stake sale that could exceed $5 billion, including debt. Sources familiar with the matter revealed that the company, which boasts an impressive portfolio encompassing brands such as Applebee’s, Taco Bell, Panera Bread, Arby’s, Pizza Hut, Wendy’s, and Planet Fitness, has engaged Bank of America to spearhead the sale process.
Based in San Francisco, Flynn Group is estimated to generate upwards of $450 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA), positioning it as a formidable player in the franchise arena. The potential sale has attracted interest from a spectrum of investors, including private equity firms and sovereign wealth funds, as disclosed by sources who opted for anonymity due to the confidential nature of the discussions.
Among the stakeholders involved in the potential transaction, Ontario Teachers’ Pension Plan (OTPP) and private equity firm Main Post Partners, both of which hold stakes in Flynn Group, are purportedly considering divesting part of their holdings while retaining a vested interest post-sale. Similarly, Flynn Group’s management, who hold significant ownership stakes, may opt for a similar strategy, according to sources privy to the matter. Currently, OTPP owns approximately one-third of Flynn Group, Main Post owns slightly over one-third, with Flynn management holding the remaining shares.
Representatives for Flynn Group, OTPP, Main Post, and Bank of America have declined to comment on the matter, maintaining confidentiality as discussions progress.
Established in 1999 by commercial real estate investor Greg Flynn, the eponymous company has carved a niche for itself by operating over 2,600 restaurants and fitness clubs across the United States and Australia. With an impressive annual sales figure exceeding $4.5 billion, Flynn Group has solidified its position as a dominant force in the franchise landscape.
This potential sale marks a significant juncture for Flynn Group, which witnessed an injection of approximately $300 million from Ontario Teachers’ Pension Plan in 2014, valuing the company at over $1 billion at the time. As discussions unfold behind closed doors, industry observers await with bated breath to witness the outcome of this landmark decision, poised to reshape the dynamics of the franchise industry on a global scale.
