Is Roark Capital Building a Franchise Bubble?
The Private Equity Stakeholder Project published a report on Atlanta-based Roark Capital Partners IV, which specializes in buying and running franchise businesses, especially within the food and restaurant industry. The performance of Roark, which closed at $2.5 billion in 2016, might give investors pause. As of September 2020, Roark Capital Partners IV had generated an annual return (IRR) of just 0.09% and 1.0x multiple. Roark raised at least $10.5 billion from investors between 2012 and 2018. Yet as of September 2020, Roark had only returned around $1 billion of that to investors. Some of the largest private equity investors have either exited investments in Roark Capital funds or held off on new investments.