Susan Black-Beth is a Chicago-area franchise executive (COO of Super Wash) who is known around the industry for letting nothing stand in her way. Susan is about to accomplish what others have thought was impossible — opening up financing to mid-level companies whose growth has been stunted as a result of limited access to capital.
Today, many mid-level companies are finding themselves without the proper funding that they desperately need to grow and expand. These companies are frequently overlooked when private equity firms, venture capitalists, and other investors are seeking companies to invest in. To fix this growing problem, Susan has created a ground breaking event that will connect private equity with mid-level franchisors and multi-unit franchisees who are actively seeking funding.
The event, Dealmakers’ Summit | Franchising Capitalized (Aug. 28-29, 2012 * Chicago, IL * Hotel Sofitel), will place money in the hands of companies focused on growth, innovation, and profitability. This event is a perfect opportunity to bring capital to the table for small, up-and-coming brands that are trying to reach the next level.
Franchise Chatter (FC): Can you give us a brief background on yourself and on Super Wash?
Susan Black-Beth (SBB): Super Wash is the largest franchisor of self-serve car washes in the country, with 300 locations in 21 states. My parents, Bob and Mary, are the founders of the company, and they are still involved in the business on a day-to-day basis.
I came back to work at Super Wash with my family when we made the decision to switch from a licensing model (which we had from 1987–2001) to a franchise business format model, that was in 2000. I worked directly with our attorneys on drafting our first UFOC and Franchise Agreement. To gain more franchise knowledge, I enrolled in the International Franchise Association’s Certified Franchise Executive (CFE) program and started participating in IFA meetings and committees.
I was fortunate enough to be presented with the opportunity to co-found the Chicago Women’s Franchise Network, and then to Chair the IFA’s Women’s Franchise Committee. I now serve on IFA’s Board of Directors, speak nationally to a wide variety of franchise groups, including multiple franchisee annual conventions, and was the lucky recipient of the 2011 Bonny LeVine award.
FC: How did you get the idea to organize a Dealmakers’ Summit to match mid-level franchisors and multi-unit franchisees with private equity firms and angel investors?
SBB: As the COO of Super Wash, I had been looking at different opportunities for our company over the last several years, and private equity is an option many of us (franchisors) think about. It became very obvious very quickly that the path between the money and the people who need the money is neither short nor efficient.
So, during an early morning workout, I got to thinking about how we could shorten the path so we can keep some of these private equity dollars in the franchise sector. This seemed like a good idea because this would help franchisors keep growing, would help Americans get into business as franchisees, and would also provide additional employment opportunities when these new locations open up.
The more research I did, the more I learned about the amazing multi-unit franchise operators out there who could also use these private equity dollars to grow their operations and achieve the same objectives mentioned above.
FC: What are your specific goals for the inaugural Dealmakers’ Summit?
SBB: I want to see meaningful connections made between the private equity firms and the franchise community. I want those meaningful connections to result in deals, if the terms/conditions are right. I want the attendees to walk away saying, that was the highest and best use of my time and dollars, and I won’t miss the next one! And, I want the sponsors, like our Titanium Sponsor Cheng Cohen, who have placed their trust in me and in this event, to recognize a very high ROI.
FC: What activities do you have planned for the actual event?
SBB: This Summit is not about speeches being made, it’s a very action-oriented event all about making deals happen. As a matter of fact, there are only two panels for the whole event, and those run concurrently at the opening of the program.
The main feature will be the “Spotlight” presentations where the presenting franchisors and multi-unit franchisees have 15-20 minutes to present their concept/business plan to the private equity firms. This is the “Shark Tank” part of program, if you will. Then, there will be time for one-on-one meetings for the private equity firms to take a closer look at the companies that intrigued them.
Finally, we’ll enjoy some quality networking time and a progressive dinner organized a bit like a miniature Taste of Chicago. I’m not sure we’re going to be able to pull off the Taste of Chicago, but the executive chef and pastry chef at the Sofitel are phenomenal and we’re going to do our darndest!
FC: What is your criteria for selecting the franchisors and multi-unit franchisees that will present at the summit?
SBB: We definitely want the private equity companies to feel comfortable they are coming to see franchisors and multi-unit franchisees that are actively seeking private equity funding. In order for that to happen, we do have a qualifying process. The main qualifier is the EBITDA of the company – they must be generating between $1MM-$10MM in EBITDA. Those are the companies this event is focused on.
FC: Can you walk us through the application and selection process? What is the cost involved for participating?
SBB: One of our event partners/sponsors, Boefly, created a proprietary online qualification form for Dealmakers. It is up on our website (www.dealmakersummit.com) and must be completed before the company can register to attend. The questionnaire asks all the questions companies have to answer before they go to market in search of private equity funding, i.e. average unit volume, total gross sales, number of units, geographic reach, etc.
Cost to attend the event for presenting companies is $699. I think there is great value here because the companies will have access to multiple private equity firms in one place for approximately the same cost as a flight and hotel for one night, if they do a road show.
Cost for private equity companies to attend is $1599. We feel this is a super value for them as well because of the pre-qualification work, chance to view multiple companies in one place, the opportunity to have one-on-one meetings, and the secure online deal rooms which could expedite transactions.
FC: How are you reaching out to qualified private equity firms and angel investors to attend the summit? How many investor groups do you expect to be present?
SBB: Our goal is to have 50-60 private equity representatives at the Summit. The Summit is intentionally being kept on the smaller side so there are more opportunities for meaningful connections. We have multiple private equity lists we are working from; additionally, we are using Twitter and LinkedIn quite a bit. We are also relying heavily on word of mouth.
FC: How can private equity firms and angel investors learn more about the presenting franchisors and multi-unit franchisees prior to the summit?
SBB: We are doing our best to be sensitive to the fact that not all companies can publicly “go to market”. I think that is part of what makes this event so special; it is being organized by people who understand franchising and the nature of these transactions. That being said, our intention is that the private equity firms will receive an electronic “book” consisting of the information we gather through the qualification process for the companies that will be presenting. This should allow the private equity firms an opportunity to research the companies they most want to focus on at the Summit.
FC: What industries do you think are most attractive to today’s investors interested in the franchise space?
SBB: At the end of the day, the most attractive segments are those that can generate a high enough EBITDA to be enticing. My inclination is that restaurants are probably still top of the list. There are certainly some really exciting service-based concepts out there too that are generating some really nice EBITDA numbers. One of my many hopes for Dealmakers is that it really showcases for private equity the breadth and depth of
FC: What advice can you offer the presenters to help them craft their written prospectus and actual presentation for the summit?
SBB: This is not a “wing it” type of presentation. They will want to be very prepared and focused on why they are pursuing funding, what their 1-3-5 year business plan looks like, and what the management team will look like to achieve the goals set forth.
Additionally, we will host a webinar in advance of the Summit for the presenting companies. They will be coached through what to include in the presentation and how to put their best foot forward by some of the best M&A specialists involved in franchising.
FC: Is there anything else you wish to share about the Dealmakers’ Summit?
SBB: Franchising has never seen an event like this before, so it may be a little hard for franchisors and multi-unit franchisees to wrap their arms around this Summit. Those who have even the slightest interest should call me at (815) 222-1894 and I’ll walk them through the event.
As for the private equity firms, we are doing some things at Dealmakers all in an effort to make this a “must attend” event for them, i.e. the
one-on-one meetings and the online secure deal rooms post-event. The deal rooms will be secured by a password which is controlled by the presenting company. If an agreement to share confidential documents (i.e. FDD, tax returns, etc.) is reached, then the presenting company will give the private equity firm the password and they have instant access to the company’s due diligence docs. This is real value-add when firms/
companies are trying to close deals before fiscal year end.
Visit us at www.dealmakersummit.com for more information and to register to attend!