Why Isn't Roark Investing in Restaurants?

Managing Director Steve Romaniello offers a glimpse into private equity firm Roark Capital Group's investment strategy. In the past, the parent of Focus Brands has snapped up franchise chains as diverse as BatteriesPlus, FastSigns and Schlotzky's. Trade journal Chain Leader asks Romaniello why Roark has stopped investing in restaurants. Roark's managing director answers that although 2009 has been dead in restaurant franchisor purchases, the company is looking to renew activity in 2010.

Roark's last investment was a $100 million investment two weeks ago in Waste Pro.

... We hope to be much more active and substantially increase our restaurant holdings in 2010.

Are you still looking at franchise models?

We like franchising. That's an expertise of the firm, in general... Roark does "love restaurants," as you put it. We like to invest in areas we know well. We have well over 100 years of operating experience among the CEOs, CFOs and heads of development who are part of the Roark team. As we get more excited about the restaurant space, we have added the two individuals [Vice Presidents James Collins and Jamie Wall] you referred to.

The head of Roark doesn't really discuss why the firm has laid low on restaurant franchisor purchases and why 2010 looks different for the firm.

Roark Capital Group was founded by Neal Aronson. The private investment firm was named after the fictional protagonist of Ayn Rand's The Fountainhead.