In a recent article from PE Hub, Paul Woody, a Franchise attorney at Greensfelder, highlighted the appeal of franchise deals to private equity (PE) firms. The franchisor-franchisee relationship's stability, where franchisees retain the majority of gross revenue but pay royalties for brand usage, creates a predictable revenue stream. This predictability is attractive to lenders, allowing PE firms to securitize future royalties, often securing lower interest rates. Woody underscores the significance of maintaining this relationship, emphasizing the financial advantages and stability associated with franchise models.
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