Dealmakers are telling us that the franchise sector has untapped M&A potential for private equity firms, as it is a growing part of the economy and consumers are seeking reliable convenient food options. Orangewood Partners has a craving for Taco Bell franchise acquisitions.

“The Taco Bell system has proven to be resilient in all market conditions,” Orangewood founder Alan Goldfarb tells Mergers & Acquisitions. “This is something we have seen over the years, and we think this resiliency will continue going forward. The Taco Bell system remains very fragmented and there’s ample opportunity to acquire new stores or new operators in our system as well.”

“Consumer and multi-unit investments along with the theme of food service sophistication and convenience are core areas of focus for Orangewood,” Goldfarb adds.

Earlier in November, Orangewood said it acquired a majority stake in Pacific Bells, one of the largest Taco Bell franchise operators in the U.S. with over 250 restaurants. Orangewood has another Taco Bell franchisee in its portfolio called ABTB.

The franchise space is attracting buyers because it allows them to buy a piece of an established brand that already has been operating for a while, has growth growth potential and generates attractive cashflow.

This is why Goldman Sachs veterans Michael Esposito and Scott Romanoff decided it is a good time to launch Franchise Equity Partners in November, which will offer permanent, minority capital to franchises.

Time to order up some franchise deals.

– Demitri Diakantonis