In the current hospitality industry, many restaurant owners are considering growth strategies that go beyond traditional expansion, such as seeking outside investment or positioning for acquisition. According to Maclain Joyce, a partner at Messner Reeves, now may be an opportune time for thriving and scalable restaurant concepts to attract investors or buyers.
Investor interest in restaurants is increasing, particularly in the lower middle market. Private equity (PE) and venture capital (VC) firms are actively looking for restaurant brands with strong financial performance, innovative concepts, or untapped market potential. These investors often provide more than just capital, offering strategic partnerships, operational support, and industry connections to facilitate growth.
Private equity firms typically play an active role in scaling restaurant brands, aiming to streamline operations, improve margins, and broaden market reach. Venture capitalists, on the other hand, focus on early-stage concepts that show disruptive potential, such as fast casual chains with digital-first models or unique customer experiences. Both types of investors seek businesses with compelling stories and proven results.
Recent high-profile acquisitions illustrate the range of deals in the industry. While Inspire Brands acquired Dunkin’ for $11.3 billion, many valuable transactions occur at smaller scales, between $5 million and $50 million. Notable examples include Panera’s $7.1 billion acquisition by JAB and Sonic Drive-In’s $2.3 billion deal, both of which began with strong local performance and scalable operations.
Restaurant owners interested in attracting investment or selling should begin preparations 12 to 18 months ahead of time. This includes organizing financial records, protecting intellectual property, reviewing key contracts, clarifying ownership structures, and demonstrating scalability through technology and management systems. Transparent financials, registered trademarks, solid vendor agreements, and clear equity arrangements all contribute to a smoother due diligence process and stronger negotiating position.
Investors are particularly interested in differentiated concepts with unique value propositions, realistic business plans supported by data, effective use of technology such as mobile ordering or AI-based inventory systems, and capable management teams. Concepts that emphasize tech-enabled operations, delivery optimization, or sustainability—such as ghost kitchens or eco-friendly sourcing—are especially attractive.
Joyce advises restaurant owners to engage legal counsel early in the process to navigate term sheets, due diligence, negotiations, and final agreements. “At Messner Reeves, we’ve helped restaurant owners across the U.S. prepare for and close successful deals. From term sheets and due diligence to negotiating final documents and protecting your future, we understand the unique challenges hospitality businesses face when entering the investment world. Whether you’re exploring equity funding, negotiating a buyout, or acquiring another concept, legal insight early in the process can protect your interests and maximize your return.”
He encourages those considering their next steps to reach out for guidance: “Ready to take the next step in your restaurant’s growth journey? Contact Messner Reeves to learn how we can help you prepare for an investment or acquisition the right way.”
