Pre-lending financial due diligence for a restaurant franchise group and the bank, facilitating the financing of new store capital expenditure 

Buy side due diligence services for an international distributor of passenger and commercial vehicle

Basil, a franchisee for a fast-food chain with branches in Central Europe, sought a €15 million revolving credit facility from a clearing bank to finance capital expenditure to grow the number of restaurants in their franchise portfolio.

The FRP Financial Advisory team consisting of:

Richard Sanfourche (Financial Advisory Partner);
Simon Longfield (Financial Advisory Partner);
Dominic Spiers (Financial Advisory Manager)

provided pre-lending financial due diligence services to evaluate whether the group could meet its obligations to the bank and comply with the terms of the franchise agreements. FRP conducted a detailed analysis of the historical performance of the existing store portfolio and reviewed management’s model to assess the likelihood of achieving the forecast. This analysis informed sensitivity testing, which explored the impact of various scenarios on the business and forecast covenant headroom. Additionally, FRP identified key risks to the business at both the micro and macroeconomic levels.

Sector:

Food & Beverages

Field:

Transaction services

Support:

Pre-lending financial due diligence

Date:

June 1, 2024

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