John Rotche and David Barr wanted to help emerging, often founder-led franchise brands grow, and they’ve been doing that since 2015 when they created brand acceleration and consulting firm Franworth. Now Franworth is getting its own boost in the form of a growth equity investment from Guideboat Capital Partners.
“What’s happened is we’ve seen brands that need working capital along with the resources of Franworth, our suite of services, our distribution company, but our model was not to provide capital,” said Rotche. Until now.
Guideboat is supporting Franworth, said Barr, by “allowing our position to expand, placing capital in other brands.”
Franworth has worked with dozens of concepts and is an equity holder in nine franchises, among them The Lash Lounge, CityRow and The Barre Code. It also partnered earlier this year with FrostFire, a wellness spa and cryotherapy concept, and it’s entering the restaurant industry with El Diablo Taco and Tequila Bar.
Franworth services range from franchise sales, real estate development and construction, and marketing to operations, legal and supply chain. Franworth has its own distribution arm, Liberty Fulfillment, which for example provides the eyelash extensions and related products to The Lash Lounge’s franchisees.
Franworth engaged investment banking firm Brookwood Associates as it sought to find a private equity firm “that aligned with our vision of growing emerging brands,” said Barr. “One that understood what it means to be a franchisor. One that was willing to place capital in these emerging segments.
“We thought Guideboat was the best aligned partner.”
Mike Sutton started Dallas-based Guideboat Capital in 2018 with an investment thesis “really focused on building great relationships with founders and management teams.” It backed retail plant-based soap concept Buff City Soap early on and the franchise recently opened its 200th store.
Buff City’s founder, Brad Kellum, “was really a product-focused guy who didn’t have a lot of business experience or franchise experience,” said Sutton, and with Franworth he liked the focus on niche beauty and wellness brands.
Sutton also knew Barr from their time together on the Twin Peaks board of directors.
“When we came across Franworth, we said this is an amazing platform,” with brands that are “proven at the unit level but need some help building out a full franchise system,” said Sutton. He called out The Lash Lounge, now with 120-plus locations, for its “great unit economics, great growth.”
“We think they’ve done a great job at selecting brands,” he continued.
Rotche said Guideboat’s investment will help Franworth have a greater impact on more franchises. “Mentorship is very near and dear to us,” he said. “Bringing in Guideboat, it’s going to allow us to scale that mission exponentially.”
“This is just rocket fuel to continue that journey,” said Barr.