Roark Capital Group founder Neal Aronson has led his company to be one of the biggest players in the franchise game.
$17 billion - that’s how much revenue Roark Capital Group’s portfolio currently brings in on an annual basis. Take a minute to think about that. Go on, you can even make one of those impressed whistle noises if you like.
So how did a relatively young private equity firm accomplish so much in such a short period of time? By focusing on franchising, among other things.
Roark investments include everything from Anytime Fitness to Wingstop, a wide variety of brands with one thing in common: franchising. It makes sense, as Roark founder Neal Aronson started the company after selling U.S. Franchise Systems, a hotel franchisor. In short, he knew how profitable the franchise world could be.
Additionally, unlike other private equity firms, Roark’s goal is not to buy and sell in quick succession for a fast profit. Aronson and his team instead look to help acquisitions improve operations and hold onto them for long-term return on investment.
“We believe in building these businesses,” Aronson told Nation’s Restaurant News. “We’re investing in people and brands. It just takes a long time to do that. When you do, when you can think for the long-term like we do, it allows us to do some things that maybe some other people can’t.”
With that said, there’s no one winning formula to which brands Roark seeks out.
“We’ve always invested in large-, small- and medium-sized brands,” Aronson continued. “But we’re thankful and lucky that investors have grown to be more excited about our approach over the years.”
By blazing its own path in the franchise and private equity fields, Aronson and Roark Capital have forced other major players to take notice.
Darren Tristano, vice president of restaurant market research firm described the company as a “major player” in the industry to QSR Magazine.
“These are very smart people,” Tristano said. “They keep their companies autonomous, but they understand how to control costs and focus on getting the profit margins up.”
Aronson , for his part, is quick to credit the company’s success to plain old-fashioned hard work.
“We’re just not big believers in shortcuts,” he told QSR. “It takes time to build a really good company, to make it sustainable, and make the growth something that’s long term.”
Whatever it is, it’s working.