Case Study: KFC/Taco Bell MO (7)
Hans Management, LLC was a 7 unit KFC Franchisee, with two Taco Bell combo units (2 in 1’s), operating in Missouri. Out of the 7 units 3 were fee properties and the remaining 4 were leasehold interest. Hans Management, LLC faced adversity in their quest to sell their existing restaurants. They were upside down with their lender and the Seller along with the lender wanted to dispose of these assets and remove them from their books.
National Franchise Sales (“NFS”) was engaged by Hans Management, LLC in order to 1) value the businesses, 2) effectively market the sale of the restaurants, 3) find a ready, willing and able buyer 4) help guide/assist the Buyer & Seller through the sale process including the negotiation of APA 5) and work closely with the Seller, the bank, the landlords and both franchise brands along with the attorney’s and legal departments of each of the parties throughout the process.
Through an extensive and challenging transfer process, a prospective buyer group, KBP Investments, LLC was approved by KFC (Franchisor) to acquire the 5 KFC locations that included 1 fee property. Due to Franchisor changes occurring regarding the 2 in 1’s, these 2 combo units were not part of the acquisition and the properties (not the franchises) at those locations were offered for sale to be sold separately.
Through an extended sale process, NFS was able to garner the trust & confidence from all the parties to understand that the finish line was attainable. Either the landlords, the secured lender, the Seller, the Buyer or the Franchisor could have pulled the plug and given up, causing all the locations to likely be shuttered. These locations are now in the hands of a proven/successful operator that is putting plans into remodeling the restaurants and improving overall quality of service.
· Most of the locations remained open for the Franchisor, employees and customers.
· The Seller was able to clear his debt on this entity and still remains a KFC franchisee with other unrelated KFC locations.
· A frustrating and challenging process was mitigated by NFS regular (almost daily) steering/leading of the project over a 2+ year period.