Carolina Family Restaurants Associates

Carolina Family Restaurant Associates was the third largest franchisee of International House of Pancakes (IHOP) Restaurants, operating 25 units in North Carolina, South Carolina and Tennessee.

Engagement Goals

Brookwood advised CFRA as its management sought a partner that would allow the Company to take advantage of compelling growth opportunities.

Engagement Process and Outcomes

The Situation – CFRA had opportunities to enter into several exclusive multi-store development agreements (MSDA’s) with IHOP International. Management was interested in finding a partner that gave them the wherewithal to aggressively develop under the “new IHOP model.” Brookwood had to convince non-management LPs that they performed a thorough market check and maximized value.

Successful Marketing Approach – Brookwood primarily contacted financial sponsor groups along with selected multi-unit operators. Though the fact that CFRA owned no real estate and had an “old model” structure with IHOP Corporation added complexity to the transaction, Brookwood helped CFRA attract strong financial buyer interest.

The Result – The winning bidder offered a very compelling price and closing structure. CFRA signed an MSDA prior to close while other MSDAs were under negotiation with IHOP Corporation at the time. Brookwood managed a unique and complex financing structure due to the lease structure of “old model.”