Key Takeaways
- • Private equity dealmaking in the restaurant sector remains subdued through mid-2025, with only a handful of ten-figure transactions closing despite predictions of an active year; smaller deals are driving the majority of M&A activity as they attract a broader buyer pool.
- • Blackstone's $2 billion acquisition of Jersey Mike's in January represents a modern anomaly, as PE firms are now acquiring franchise brands at earlier stages of development—before they reach 3,000 locations—compared to historical entry points from a decade ago.
- • Roark Capital, the Atlanta-based PE heavyweight that acquired Subway for nearly $10 billion in 2024, purchased Dave's Hot Chicken for $1 billion in June 2025, demonstrating continued aggressive capital deployment in the restaurant franchise sector.
- • Bain Capital closed a $1 billion acquisition of Sizzling Platter, a restaurant franchisee, in July 2025, underscoring institutional investor appetite despite a broader slowdown in large-scale transactions.
- • Inflation remains contained despite concerns surrounding potential tariff policies, maintaining favorable conditions for deal structuring and valuation in the restaurant and franchise space.
Summary
Private equity investment in the restaurant sector continues to show significant capital deployment activity, though dealmaking velocity has not matched expectations set at the 2024 Restaurant Finance & Development Conference. As of mid-2025, the market has generated only a handful of ten-figure transactions, indicating a more selective and cautious approach than anticipated by M&A specialists heading into the year.
The dealmaking landscape has bifurcated into distinct tiers. While mega-deals have stalled, smaller restaurant transactions are accelerating, according to Northmarq Senior Vice President Daniel Herrold. "The reality is simple: the smaller the deal, the broader the buyer pool," Herrold noted in his monthly market newsletter. This dynamic reflects a shift in PE acquisition strategy, with franchisors attracting private equity attention earlier in their growth cycles than in previous decades. Alicia Miller, founder of Emergent Growth Advisors, observed in her July 2025 column that "unaffiliated franchisors today get PE attention earlier compared to what these same PE firms would have previously considered a prime entry point."
The $2 billion Blackstone acquisition of Jersey Mike's in January exemplifies this evolution. Miller characterized the deal as "a modern-day franchise anomaly, since brands today are typically picked off by PE long before they reach 3,000 locations." This represents a fundamental shift in acquisition timing and valuation strategies within the sector.
Among the year's significant closings, Roark Capital—the Atlanta-based firm that acquired Subway for nearly $10 billion in 2024—purchased Dave's Hot Chicken for $1 billion in June 2025. Separately, Bain Capital completed a $1 billion acquisition of Sizzling Platter, a restaurant franchisee, in July 2025. These transactions demonstrate continued institutional capital deployment despite the slower overall pace of dealmaking.
Macroeconomic conditions remain supportive for restaurant acquisitions. Inflation has remained contained or in line with historical norms, mitigating concerns that had emerged regarding potential inflationary pressures and tariff policies. This pricing stability has preserved favorable conditions for deal structuring and valuations in the restaurant franchise space.
The dealmaking landscape has bifurcated into distinct tiers. While mega-deals have stalled, smaller restaurant transactions are accelerating, according to Northmarq Senior Vice President Daniel Herrold. "The reality is simple: the smaller the deal, the broader the buyer pool," Herrold noted in his monthly market newsletter. This dynamic reflects a shift in PE acquisition strategy, with franchisors attracting private equity attention earlier in their growth cycles than in previous decades. Alicia Miller, founder of Emergent Growth Advisors, observed in her July 2025 column that "unaffiliated franchisors today get PE attention earlier compared to what these same PE firms would have previously considered a prime entry point."
The $2 billion Blackstone acquisition of Jersey Mike's in January exemplifies this evolution. Miller characterized the deal as "a modern-day franchise anomaly, since brands today are typically picked off by PE long before they reach 3,000 locations." This represents a fundamental shift in acquisition timing and valuation strategies within the sector.
Among the year's significant closings, Roark Capital—the Atlanta-based firm that acquired Subway for nearly $10 billion in 2024—purchased Dave's Hot Chicken for $1 billion in June 2025. Separately, Bain Capital completed a $1 billion acquisition of Sizzling Platter, a restaurant franchisee, in July 2025. These transactions demonstrate continued institutional capital deployment despite the slower overall pace of dealmaking.
Macroeconomic conditions remain supportive for restaurant acquisitions. Inflation has remained contained or in line with historical norms, mitigating concerns that had emerged regarding potential inflationary pressures and tariff policies. This pricing stability has preserved favorable conditions for deal structuring and valuations in the restaurant franchise space.
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