Accelerating Multi-Unit Expansion

Sentinel was introduced to Checkers as part of an auction process. When the sellers decided not to sell at that time, Sentinel continued to track the business and maintain a dialogue with the owners. In late 2013, we learned that the owners were interested in a negotiated sale, and Sentinel was chosen as a result of our credibility in the franchising and restaurant sectors, our demonstrated interest in Checkers after the abandoned auction, and management’s favorable view of us during the initial due diligence.

To accelerate the growth of a proven concept with attractive ROIs by implementing and executing strategies to recruit new franchisees, grow the number of restaurants, and expand the brand in core markets

Improved Unit Economics: Sentinel worked with senior management to improve unit economics by (i) adjusting late-night operating hours, (ii) lowering food costs by reducing waste, and (iii) improving labor costs through productivity initiatives. In addition, Checkers was able to reduce its build-out cost for new units by launching lower-cost versions of its prototypes. With improved unit economics, new-unit openings became a more attractive business opportunity for franchisees and company-owned restaurants.

Improved Same-Store Performance: During Sentinel’s ownership, same-store performance improved each year. Senior management developed initiatives to launch new value-based products for late-night, dessert, lunch, and dinner occasions. These initiatives proved more sustainable than limited-time promotions and had a permanent effect across the Checkers system.

Built a Robust Pipeline: As a result of improved unit economics and consistent same-store performance, Checkers was able to rapidly grow its franchised restaurant base and build a robust pipeline for store openings. At the end of 2016, Checkers’ backlog of new franchised restaurants exceeded 100.

In each of the three years that Sentinel owned Checkers, unit economics and same-store performance improved, and the total restaurant count increased by 59 units. In 2017, with Sentinel having achieved its investment objectives, Checkers was sold to another private equity firm in a management buyout.