Case Studies

Refinancing a Restaurant Franchisee

J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida

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Home·Refinancing a Restaurant Franchisee

The Situation

21 location Sonic Restaurant franchisee. $20 million in sales. $15 million in mortgage debt.

  • Florida had suffered through four years of over 10% same stores sales declines.
  • Six banks, no bank group, no inter-creditor agreement.
  • Major bank holding $10 million had hard maturity and usage fees were mounting.
  • Given four years of same store sales declines of over 10% each year, Florida units were barely able to make contributions to mortgage debt.
  • Senior lender was seeking an exit and had a hard maturity.
  • Line usage fees and expenses were increasing the cost of debt service.
  • Global restructuring would require six banks to negotiate an agreement.
  • Management had talked to all of the current lenders and several regional banks and had not found anyone interested in a refinance.

How We Advised

  • Our experts were engaged to assist management with the development of a refinancing package and to seek alternative sources of funds.
  • A package of financial information on the company including projections and detailed analyses of store level profitability was quickly developed.
  • Several larger regional and national banks and financial groups that focused on franchise lending were brought in to review the package.
  • We were able to use its national exposure to bring in five larger franchise industry lenders
  • The team helped the lenders understand a complex ownership and real estate organization.
  • The complete package of financial information and analyses allowed the national franchise lender quickly got up to speed.
  • Letter of Intent within two weeks, commitment letter at week eight and closing at eleven weeks with all title work, appraisals, surveys and Phase I’s completed.

Related Practice Areas

> Debt Restructuring Services
When a company is in financial distress, our Strategic Advisory experts design and implement debt restructuring and refinancing strategies tailored to the company’s unique circumstances. We help middle-market businesses stabilize operations, improve liquidity, and optimize their capital structures.

 

> Turnaround and Restructuring Services
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation.

Key Contact

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