Yesterday, Restaurant Brands International announced they acquired Firehouse Subs for $1 Billion, despite Firehouse Subs reporting just $50M in adjusted EBITDA for 2021.
Here's why paying 20x EBITDA makes sense, & shows that RBI is playing the long game👇
First let's note that RBI currently owns Tim Hortons, Burger King, & Popeyes.
That's 2 pure-play fast food brands, and a coffee QSR.
Firehouse Subs is a QSR with fresh sandwiches that appeal to a customer base RBI currently isn't hitting with its existing portfolio.
Secondly - take a look at the dates these brands got started. Surprised at how old they are?
Don't be.
For 99% of franchises, scale + brand development take decades (most aren't F45).
Remember this if you're evaluating franchises that only started in the last few years.
Crumbl Cookies opened their first location in Logan, Utah in October 2017.
Today they have 260 stores operating in 36 states, and an average unit volume of $1.27M.
5 high level thoughts on what this franchise does really well (and what other brands should be doing too) 👇
1. Product
The founders A/B tested their way to the perfect chocolate chip cookie by using different ingredients, & asking people at local gas stations "which do you like better?"
After spending thousands of $$$ on recipes, they landed on a cookie they feel is truly special.
2. Branding
Crumbl uses iconic pink packaging for every take-out + delivery order.
The boxes are designed to fit each cookie side by side, whether in a 4-pack, 6-pack, or 12-pack box.
The unique shape + signature pink coloring make it recognizable and Instagrammable.