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How’s it going, everyone? Today, we’re covering some highlights from Lincoln Archibald’s interview with Todd Recknagel from Three20 Capital Group about investing in franchise companies!
Todd is Managing Partner at Three20 Capital Group, a private investment firm focused on franchise, distribution and multi-unit investments (See company website).
Smaller Checks & More Deals
Lincoln: Tell me a bit about Three20!
Todd: We are a family office that invests heavily in franchise companies, in which I’ve had more than 30 years of experience. We look for deals between $20M and $100M, but we often partner up with a private equity firm and write a smaller check. Three20 sources most of its own deals, but we have some franchises come to us when they’re looking to scale. In order to diversify our portfolio, we also invest in GP stakes and Mezzanine funds.
Unused Cash
Lincoln: As you’re waiting for various capital calls, are you placing your cash in treasuries, equty markets, or something else?
Todd: We have been buying 3-month CDs or have invested in CD funds that diversify with various banks. They’re currently paying 5.25% in interest, so we’ve taken advantage of that while the Fed has high interest rates.
Funds That Won
Lincoln: What makes a fund win?
Todd: I think funds win when they have their own sourcing; they win when they have proprietary sourcing of deals.
It’s so hard to capture good deals in today’s market, but there are funds out there that have an unfair advantage when it comes to sourcing, whatever it may be.
Conclusion
That’s all we’re covering from Lincoln and Tood’s interview from “Funds that Won“: Investing in franchises!
Click here to listen to the rest of the conversation!
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.
