In the current hospitality sector, many restaurant owners are considering strategic growth options such as equity investment or acquisition. With increased interest from private equity and venture capital firms, restaurants that demonstrate strong financial performance and scalability are becoming attractive targets for investors.
Maclain Joyce, a partner at Messner Reeves, notes that the lower middle market in food service is experiencing heightened investor attention. According to Joyce, “Investors aren’t just offering cash; they’re bringing strategic partnerships, operational support, and industry connections to help you grow faster and smarter.” He adds that both private equity firms and venture capitalists seek brands with innovative concepts or untapped market potential.
Private equity firms often help restaurant brands scale by streamlining operations and expanding market reach. Venture capitalists tend to focus on early-stage concepts with digital-first models or unique customer experiences. Joyce emphasizes, “In both cases, investors are looking for one thing: a compelling story backed by real results.”
Citing recent high-profile deals such as Inspire Brands’ $11.3 billion acquisition of Dunkin’ and JAB’s $7.1 billion purchase of Panera, Joyce points out that significant transactions also occur at smaller scales, ranging from $5 million to $50 million. These deals often begin with strong local performance and scalable operations.
To prepare for investment or sale, Joyce advises restaurant owners to begin preparations 12 to 18 months in advance. This includes organizing financial records, protecting intellectual property, reviewing contracts for potential risks, clarifying ownership structures, and demonstrating scalability through technology and management systems. Joyce states, “Investors want to know they’re buying or funding a defensible brand, not just a storefront.”
He also outlines what investors typically look for: a differentiated concept, data-driven business plans, effective use of technology, and a capable team. Trends such as tech-enabled operations, delivery optimization, sustainability initiatives, ghost kitchens, eco-friendly sourcing, and loyalty programs driven by data are increasingly important.
Joyce recommends working with legal counsel early in the process to navigate term sheets, due diligence, negotiations, and documentation. “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 says.
Messner Reeves offers services to help restaurant owners prepare for investment or acquisition opportunities.
