After 30-some years in finance, many of those advising multi-unit restaurant operators, Kevin Burke decided to retire, as we reported in the June issue of the Monitor. Burke retired as CEO of Trinity Capital, a restaurant industry investment banking firm he founded in 2000.
MINNEAPOLIS, MN, September 15, 2023 /Restaurant Finance Monitor/ — “I retired because I felt like I needed a new environment,” he said. Along with a move from Los Angeles to Florida, he was also contemplating “what to do with the rest of my life.”
Enter Franchise Equity Partners (FEP), and Burke has set aside retirement for now. He has joined FEP as a Partner.
FEP is a fund that makes minority and control investments in restaurant franchisees, as well as operators in other industry verticals in franchising. Burke is now a partner with the firm, and will focus his talents on their consumer vertical—chiefly restaurants, he said.
He joins another franchise finance alum, Robert Daniel, who headed up Regions Bank’s franchise finance group before he joined FEP as a Partner in 2021. Daniel is head of capital markets for the firm, and also works on restaurant sector investments, in addition to the firm’s other verticals.
“I did not intend to go back to work. I was getting outreach from Mike and Scott; we had common friends at Goldman Sachs,” Burke said of FEP founders Mike Esposito and Scott Romanoff. “A friend of mine said wonderful things about them, and the more I talked to them, the more I liked them. It just seemed like a great opportunity and a great fit.” Being an entrepreneur himself, he has settled in well with their entrepreneurial culture.
Right now, Burke is “chasing down relationships and deal opportunities, and responding to M&A opportunities via auctions or off-market transactions.”
And, he’s bringing past experience with him, but also thinking differently in his new role. “I’ll tell you a fun story,” he recalled. “I was going on a pitch with Mike and Scott; it was something I had set up with one of my past clients. I said to them, ‘We have to get busy on a pitch book.’ Scott told me, ‘We don’t do books; we do term sheets.’ It hit me that this wasn’t investment banking. We’re the investors.”
And while that may be the case, Burke reported that FEP also has three guideposts that help the franchisees in which they invest: MPP—minority, passive and permanent.
It’s a minority investment that is passive, and they generally don’t take a board seat. They invest in successful, growth-oriented franchisees who can run their own business without outside help. “We’re not going to get into their hair, although if they need a sounding board, we can be that,” Burke said. “And we’re permanent. We exit when the client wants to exit. We’re not afraid of the 10-year investment.”
Franchisors should like their brand of investing, too, he said. “One of the things franchisors worry about with private equity is these franchisees being flipped. There’s turnover and they are concerned about the performance of their franchisee’s business. They want to ensure PE isn’t causing franchisees to cut corners. We’re telling the franchisors: That’s our philosophy, as well.”
You can reach him at his office at 212-547-8729, or his cell at 310-254-5008. Or, email him at kevin.burke@ fep-us.com.
Source: Restaurant Finance Monitor - Volume 34, Number 9
