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Restaurant M&A Model for Strategic Footprint Growth

Our client is an American fast-casual restaurant chain specializing in artisanal pizzas. They are present in 300+ locations across 38 US states and 6 countries.

What problem we were asked to solve


The client experienced phenomenal growth in franchisee store openings over the last decade. With a tightening economy and demanding customers, the leadership wants to have a razor-sharp focus to grow the brand while sustaining the brand quality. They engaged Gravitas as their trusted advisor to create a strategic and structured approach toward increasing company-owned stores.


Our approach


  •  We created a two-step approach – the first step pre-qualifies franchisee locations that are attractive for acquisition based on financial and real estate parameters, and the second step involves a deeper analysis of store performance to suggest an acquisition price to the leadership. 


  • We collaborated with the CFO’s office to identify key financial metrics and performance thresholds for a store to qualify for acquisition. In addition, we ran multiple iterations of increasingly complex analyses (based on Regression and Random Forests) to identify the most relevant real estate parameters and their impact on the sales performance of the stores. 


  • We partnered with the leadership and their PE advisory firm to gain buy-in for the devised approach


Outcomes


We combined the varied parameters into a singular framework to assign an Attractiveness and Cost of Acquisition score for each store by applying our Business Value Rating assessment. We validated the model’s performance with the CFO by testing it against the data for current company-owned stores. Using PowerBI, we created a visual dashboard for the leadership to ascertain the prioritization and ranking of acquisition opportunities with a glance. The next step will be to continue strategic analysis and data modeling to enhance long-term decision-making. 

Key outcomes

300+

Locations analyzed

$5mn

Identified improvement in EBITDA

87%

Improvement in M&A efficiency

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