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Sun Capital buys HuHot franchisee

View Original Article by Jonathan Maze

Deal for 21-unit CCW LLC marks private-equity group’s entry into franchisee ownership

Sun Capital Partners Inc. has completed a deal for the largest franchisee in the HuHot Mongolian Grill system, Omaha-based CCW LLC, the companies accounced.

Terms of the deal were not disclosed, but the acquisition earlier this month continues a trend of private-equity groups buying up large franchisees, and in increasingly smaller systems. HuHot, a Mongolian grill chain based in Missoula, Mont., operates 56 locations.

“CCW has built a strong business on a unique concept and we’re excited to partner with this experienced management team to build on their tremendous success,” Mark Leder, co-CEO of Sun Capital, said in a statement. “The company is well positioned for continued substantial growth.”

CCW operates restaurants in Iowa, Nebraska, Kansas and South Dakota.

Sun Capital has considerable experience in the restaurant business. It owns Boston Market, Bar Louie and Smokey Bones, and has a long history of brand ownership.

Private-equity groups have bought numerous franchisee groups over the years. Franchisees don’t have the market value of restaurant brands, but they generate a lot of cash.

Franchisees that take private equity investment are intent on growing. And Sun has big expansion plans for CCW, beyond HuHot.

“We see significant opportunity for CCW to expand with the HuHot brand and beyond,” Sun Capital Managing Director Anthony Polazzi said in a statement. “We are actively exploring development partnerships with fast-casual franchisors, as our focus will be on working with the business’ outstanding operating team to scale this single concept franchisee into a multiple-concept platform.”