Individual franchise units are often owned by the local investors who run the business and reap the rewards of their efforts. But who owns the franchising system that local owners are licensing? Increasingly, private equity funds are investing in franchisors, drawn by the predictability of a proven business model, and the “skin in the game” model of local ownership.
Forbes recently examined the legal complexities that private equity must consider when investing in a franchisor. From joint-employment standards and anti-poaching restrictions, to purchasing arrangements and standards enforcement, it’s an interesting look at the changing world for franchising systems. Read more at Forbes