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Is Roark Capital building a franchise bubble?
The report examines the financial health of Roark Capital, noting that despite raising billions for funds like Roark Capital Partners IV and V, the firm has returned relatively little to investors. It highlights the underperformance of the Roark Capital Partners IV fund, which had an annual return (IRR) of just 0.09% as of September 2020. The document details declining sales and store growth at Jimmy John’s and slow expansion at other portfolio brands such as Orangetheory Fitness and Miller’s Ale House. Additionally, it notes that several large institutional investors, including the Canada Pension Plan Investment Board, have exited or avoided new investments in Roark funds.
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Document type: Report