QSR roll-up

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September 27, 2024

by a searcher in New York, NY, USA

I have zero PE background, so curious for someone smarter than me to pick apart why a potential idea would clearly not make sense. I know of 3-4 off market independent ice cream shops with retiring owners that have a strong history of cash flowing. I have an experienced and awesome GM ready to go to manage these businesses.


At first I wouldn't do anything but look for efficiencies, but over time, I'd put the shops under one new brand/franchise concept with a more premium product. (Ice cream happens to be a product I know quite well). Beyond the obvious that any roll-up is operationally hard and risky...

Do I have a potential story here for investors/myself of a combo of 3 shops doing $500K EBITDA at $1.2mm acquisition (that would be the newco -- each shop def does NOT d that)? Or better just start with the best one for myself with an SBA and being the operator

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Reply by a searcher
from University of Texas at Austin in Dallas, TX, USA
No PE background either, but from a second pair of eyes. It sounds like acquiring all three is the way to go. If you see yourself going down that path regardless might as well jump in. If all are cash flowing well and the owners are retiring, I don't see the problem. Also by combining all three you immediately create more value for your ice cream shop. I'm curious what others have to say.
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Reply by a professional
from University of Notre Dame in New York, NY, USA
I’ve advised on a food franchisee roll up with a very similar strategy in NY (not ice cream, although I’ve also done an ice cream deal for a very well known east coast ice cream franchise). Happy to chat redacted or shoot me a DM).
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