FRM Solutions’ Stan Friedman Shares Take on Recent FranConnect Acquisition of Process Peak
Just before the holidays, I was asked to share my thoughts regarding FranConnect’s acquisition of Process Peak. Some of those comments (in an abbreviated form) found their way into January’s Franchise Times. Since then, I have fielded several more calls asking for my perspective on how this acquisition might impact the industry and I decided to just put these thoughts out there for public consumption.
In my 25 years in franchising I have had some direct contact with both of these companies as well as front-row seats for much larger, blockbuster mergers and acquisitions, as well as some others that were much smaller. What all of this experience has taught me is that some things are constants in any merger. So, what might franchisors expect or prepare for here? Seismic shift, or just an inconsequential blip on the radar? You can read what Franchise Times had to say, including my abbreviated comments in their “20 to Watch Trend-Setters in 2015.” The full text of my thoughts follows below.
“I congratulate FranConnect and Process Peak and thank Serent Capital for placing a spotlight on this software market segment and its viability. I can’t help but be reminded of a similar circumstance that I encountered almost a dozen years ago shortly after I became a partner at Wing Zone. Back then, Buffalo Wild Wings had just gone public. That big move created a powerful halo effect for the whole chicken wing industry and it had a very positive impact on our development plans at Wing Zone. Seemingly overnight, chicken wings went from being the throwaway part of the bird, or simply a party or tailgate commodity, to a center of the plate offering at restaurants around the globe. Needless to say, the rising tide caused by BW3’s IPO raised our ship at Wing Zone and was certainly a catalyst for the growth and prosperity that many chicken wing-based franchises also experienced.
Now, I don’t expect the halo effect here to rise to that level or magnitude, but this FranConnect’s acquisition of Process Peak, funded by third-party capital, certainly will serve as a catalyst for change. What might this mean in the marketplace and more directly for you? At the very least, software integration will soon be on the horizon, as different technology platforms are merged. Customers at both companies could also face changes to contracts, business practices and pricing, as the new combined entity works to establish new policies. Any or all of these circumstances could trigger change, which could be further exacerbated by shifting corporate cultures. Now, with all of that said, it’s not all bad. Nor does it spell doom and gloom for those caught up in the changes. After all, change means different, but different does not necessarily mean bad. For those feeling the need to reevaluate their options, remember to look beyond just the changes being served up by the protagonists and you should consider those as well.
As we enter this New Year, our expanding team at FRM looks forward to increasing our ever-growing footprint. We are blessed with high levels of activity, an ever-growing client roster of emerging and legacy brands and even more new members joining the team. We all stand ready, willing and able to serve your needs and look forward to seeing you in Houston for Franchise Expo South and/or in Vegas, at the upcoming IFA.