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Sentinel Capital Acquires Captain D’s

Captain D'sSentinel Capital Partners announced Monday that it has acquired franchisor Captain D’s for an undisclosed amount. The private equity firm bought the seafood quick service restaurant franchisor from Centre Partners, which bought Captain D’s four years ago.

Regarding the acquisition, John McCormack, a Sentinel senior partner, states: “Captain D’s holds a unique market position and was recently recognized as one of the top 10 brands in America for consumer loyalty. Captain D’s continues to attract younger guests and is the clear category leader. Moreover, its same-store-sales growth over the past decade is in the very top QSR tier regardless of category.”

Captain D's has flat restaurant unit growth in the U.S.Captain D’s growth in restaurant outlets has been flat over several years. From the end of 2013 to 2016, the seafood restaurant chain has grown in net outlets by only one location (see chart), from 515 to 516 units. As of December 2017, globally, the firm states it currently operates 303 company-owned locations and watches over 227 franchised quick service restaurants. The Tennessee-based firm has locations largely in the southeast and midwest regions of the United States.

Sentinel has eight other franchisor and franchisee investments in its portfolio, ranging from Taco Bell franchisee Border Foods to franchisor Huddle House. In its franchise-related acquisitions, the New York-based private equity firm looks for midscale investment in which the prospect has an EBITDA of up to $40 million.

Captain D’s CEO, Phil Greifeld, a 22-year QSR industry veteran who has led Captain D’s for the past seven years, commented, “Sentinel’s more than two decades of experience in the restaurant franchising sector makes the firm an ideal partner for us as we enter a new phase of expansion. We see significant opportunities to grow inside our existing footprint as well as into new regions. Our brand has never been stronger.”

Captain D's comparable franchised restaurants grow average gross sales“Captain D’s provides highly attractive and consistent unit economics for its franchise partners,” added Michael Fabian, a Sentinel partner.

Although he did not cite specifics, disclosure documents to regulators and new buyers show Captain D’s comparable franchised restaurants grew their average gross sales by 4 percent to $1,127,105 in 2016 over 2015 sales. Fabian added, "This has fueled substantial growth in new franchise sales and openings over the last several years. We look forward to partnering with Phil and his talented team to help accelerate this growth in years ahead.”

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.