Shriram Chokshi, Managing Director at Auspex Capital, Provides Details and Insight into the Growth of Ampex Brands.
Mega YUM! Franchisee Builds Business with Acquisition/Financing Transaction
Dallas, Texas-based franchisee Ampex Brands, and it’s collective companies, has obtained a total of $60.5 million of financing including $51.5 million of business value secured term loans, $4 million of real estate secured term loans and a $5 million development line of credit. The loans were used to refinance the company’s existing debt, finance the acquisition of 76 Pizza Hut stores, including four fee properties, and provide capital for remodels and development of new restaurants. The transaction was financed by a threebank syndicate, led by Cadence Bank with participations from Regions Bank and First Fidelity Bank. Investment banking firm Auspex Capital provided debt-placement advisory for the transaction.
“This was a strategic acquisition in a strategic market and in an iconic brand…it puts him on the forefront of being a preferred buyer of restaurants for Pizza Hut and several other major QSR brands. I expect to see more acquisitions and further growth for Ampex in the near future.”
– Shriram Chokshi
Owned and operated by long-time franchisee Tabbassum Mumtaz, Ampex Brands now owns and operates 111 Pizza Hut restaurants, including the real estate underlying six of those restaurants, which are located in Texas, West Virginia, Kentucky, Ohio and Virginia. Ampex owns an additional 358 restaurants under the brands KFC, Tim Horton’s, Long John Silver’s and Taco Bell. Mumtaz has been on a bit of an acquisition tear in the last few months, as this was his third package of YUM locations acquired since October. “What I see for my business is growth,” he said. “And I don’t see it stopping, based on the team I have.” Team members often joke: “Let’s retire together.” Translation, they are having fun and want to keep growing, too. There’s no reason he and the team can’t take the company past 1,000 restaurants, he says. And, he’s looking at investments in smaller franchisor companies, as well.Part of that growth for him means incentivizing people by giving them ownership in locations, whether they are employees in the stores themselves, or in Ampex’s corporate headquarters. Employees can invest more in the locations, or exit at a certain time. They can even buy out Ampex altogether.“Imagine a restaurant manager’s dream is to own their own restaurant,” said Mumtaz. “If I can help them with that dream, why not?” It’s his mission to reward them and show them a future, he says.Mumtaz’s loyalty to his team of people is just one of many reasons the business is high on Cadence’s list. Cadence’s relationship with Ampex spans a couple of years, says Dan Holland, executive vice president and head of the restaurant group at the bank. “Tabbassum is very detailed oriented and looks at a number of transactions each year,” he said. “And he’s also willing to walk away from a deal if it doesn’t make sense for his business or his team.”
Auspex’s ability to bring things to light “I don’t even think of sometimes” like certain covenant details, has helped save money—more than their fee.”
– Tabbassum Mumtaz
Cadence likes to take an advisory role with their clients, as well, where “we can have open dialogue. We’ve looked at several deals with Tabbassum and he’s willing to listen to all viewpoints,” said Holland. “When it comes to how he looks at the business and how we look at the business, we find a common ground on a deal that works for both of us.”Shriram Chokshi, managing director with Auspex, said the Pizza Huts sites acquired in the deal were top in the nation for AUVs and “ops metrics.”“Tabbassum won the bid largely due to his credibility to deliver and close on a timely basis,” said Chokshi. “This was a strategic acquisition in a strategic market and in an iconic brand…it puts him on the forefront of being a preferred buyer of restaurants for Pizza Hut and several other major QSR brands. I expect to see more acquisitions and further growth for Ampex in the near future.”Both Cadence and Auspex help to set up Mumtaz’s business for growth. “Cadence has told me they will be there for me, and they have never backed off that commitment,” he said. “They are the type of people I like to do business with.” Auspex’s ability to bring things to light “I don’t even think of sometimes” like certain covenant details, has helped save money—more than their fee”, he said.
- Mega YUM! Franchisee Builds Business with Acquisition/Financing Transaction, Restaurant Finance Monitor, Page 2, Jan. 18, 2018
- Auspex Secures $60,500,000 in Financing for Ampex Brands, January 2018