QSR Magazine: Is Venture Capital Right for Your Restaurant Concept?

When franchise brands are looking for ways to achieve aggressive growth, one solution that comes to mind is finding a venture capital firm that invests in businesses. However, according to a recent QSR article, the ways in which venture capital relationships are being formed today is different than in the past. When firms wait to partner with franchises when they’re already established brands, the deals are worth large sums of money. That’s why some deals are being struck sooner in the franchising process than ever before.

Dennis Monroe, co-founder and chairman of Minneapolis law firm Monroe Moxness Berg, told QSR Magazine, “People are going downstream and looking at earlier stage companies—things that in the past they wouldn’t have looked at. Something with four or five stores they’re looking at now because they realize if they get to 10, 20 or 30 units and are doing well, then their price is just out of sight.”

Whether you’re looking to work with a venture capital firm as an established or emerging concept, there’s one critical component of the process that stays the same: the relationship needs to be strong. Franchisors and venture capital firms agree that deals are only successful when the right partnership is formed.

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