How CapitalSpring Helped The Saxton Group More Than Double the Value of Its Business

Kelly Saxton got his start in the restaurant industry in 1982 as the owner and manager of a Mazzio’s Pizza store in Clinton, Mississippi. As his company evolved, he created The Saxton Group with the intention of becoming a multi-unit restaurant franchisee, and before long, The Saxton Group had grown its Mazzio’s Pizza business to 50 locations across three states. In 2004, the Mazzio’s Pizza stores were sold, allowing the company to fully focus on growing the McAlister’s Deli brand. Today, they operate 80 successful locations across six states.

Now The Saxton Group’s Executive Chairman and Co-Owner, Kelly Saxton always knew he wanted to grow the business thoughtfully. “I’ve been the dishwasher, food runner, operator, owner, pretty much every position a restaurant has from the beginning,” said Saxton. “When you’re the first guy in a business, and over 25 years later you're still there, you’re the only guy like that. From my perspective, it’s all about making the business as successful as possible.”

In December 2012, The Saxton Group forged a partnership with CapitalSpring, a private investment firm that invests exclusively in the restaurant industry, to help grow and fine-tune the business. CapitalSpring provides structured financing and creative capital solutions to proven operators in the restaurant industry. Co-founded in 2005 by Managing Partner Richard Fitzgerald, CapitalSpring has grown to a 28-person team, with locations in Nashville, New York and Los Angeles.

Since partnering with CapitalSpring, The Saxton Group has more than doubled the value of its business, according to Saxton.

“We value CapitalSpring’s integrity and the way we work together,” said Saxton. “When they say they’re going to do something, they do it. Since 2012, we’ve had a real relationship that continues to thrive because we trust one another and have confidence in each other. We have a partner who supports and stands behind us and truly wants to see our business be successful.”

Saxton had a list of criteria he applied to his search for the right private equity partner, including the ability to retain substantial ownership of his franchise. “We weren’t looking to sell out of the business,” he said. “We were looking for equal ownership, which can be rare in the restaurant industry. Our expectations and continued involvement in the business demanded a different type of partner.” Because CapitalSpring tailors its financial solutions on a client-by-client basis as opposed to a traditional financial industry model of pre-determined investment products, Saxton knew the CapitalSpring would perfectly align with The Saxton Group’s goals.

Saxton also specifically desired a firm with a thorough understanding of the restaurant industry, which is unique in the world of private equity where firms typically build their portfolio across sectors. Further, he wanted a partner that would work side-by-side with his sons and the rest of The Saxton Group’s executive team and understand how to navigate the transitions that come along with family businesses.

“It worked out great,” said Saxton. “CapitalSpring is very specific in their investments—100 percent of their work is in the restaurant space. They also understand that, as an investor, they support their partners by empowering them to manage their own day-to-day operations. We are best in class in a lot of ways, so we didn’t need that kind of help.”

When it comes to private equity and reporting, Saxton said CapitalSpring is “the master of that universe.” He said the firm has been an invaluable resource when it comes to the way The Saxton Group looks at their finances and the sophistication of their financial analysis.

“At any given time, we always know exactly where we land numbers-wise. We are spot-on with our financial reporting,” Saxton said. “We’ve always had good financial tools, but CapitalSpring has really helped us fine-tune them and mature that piece of the business.”

Having refined reporting and strengthened financials has helped The Saxton Group to develop impactful new partnerships, such as one with BMO Harris Bank. “We now have the credibility needed to open the door to a group of middle-market, national partners that we didn’t have the opportunity to deal with previously,” Saxton said.

In the future, The Saxton Group’s financial strength could also help them acquire controlling stakes in other franchisee systems or franchise concepts. Saxton says that with CapitalSpring’s partnership, The Saxton Group will have the resources to act upon the right opportunity should it come along.

According to Saxton, The Saxton Group is more successful financially because of its partnership with CapitalSpring. “Having them involved in rounding out the pieces that we had in place helped us with the business immensely,” he said. “Their expertise helps us perform at a higher level at all times. That’s a huge win for us.”

To learn more about The Saxton Group, please visit https://www.saxtongroup.com, and to learn more about CapitalSpring, please visit http://www.capitalspring.com/.