Restaurant franchise groups growing through strategic stake acquisitions, like Spur Corporation’s staged acquisition of a majority stake in Nikos Coalgrill Greek in 2018, let an established franchisor scale a promising smaller brand faster than the original founders could alone, while giving those founders continued involvement and a path to further payout.
How staged franchise stake acquisitions typically work
Rather than acquiring a brand outright immediately, an established franchisor often takes a majority stake first, with founding operators retaining a minority share and continuing to manage day-to-day operations, supported by the acquirer’s franchising infrastructure and expertise. An option to acquire further shareholding after a set period, based on an earnings multiple, aligns both parties’ incentives toward genuinely growing the brand rather than simply cashing out immediately.
Why this benefits both the acquiring group and the original founders
The acquiring franchise group gains a fast-growing brand with proven customer appeal without having to build a new concept from scratch, while the original founders gain access to established franchising systems, supplier relationships and expansion capital that would take years to build independently. This structure has repeatedly turned small, single-city restaurant concepts into national franchise brands under the same acquiring group’s portfolio.
What this means for smaller restaurant and food brands considering growth options
Founders of a promising but resource-constrained restaurant concept should consider a staged stake sale to an established franchise group as a genuine growth path, rather than either staying small independently or selling out entirely too early. Retaining meaningful equity and operational involvement through the transition, as this kind of structure typically allows, gives founders a real stake in the brand’s continued success rather than a clean but final exit.
Frequently asked questions
How does a staged franchise stake acquisition typically work?
An established franchisor acquires a majority stake first, with founders retaining a minority share and continuing operations, with an option for further acquisition later.
Why would a franchise group acquire a stake rather than buying a brand outright?
It gains a proven, appealing brand without building a new concept from scratch, while founders retain involvement and incentive to keep growing it.
What do the original founders typically gain from this kind of deal?
Access to established franchising systems, supplier relationships and expansion capital that would otherwise take years to build independently.
Is this a good growth option for a small, resource-constrained restaurant brand?
Often, yes, as a middle path between staying small independently and selling out entirely too early.
Why does retaining equity through the transition matter for founders?
It gives them a genuine ongoing stake in the brand’s continued success, rather than a clean but final exit.
Originally published in June 2018. Updated September 2026.
Franchise sector support via the Department of Trade, Industry and Competition.
Further reading
Originally published in June 2018. Updated September 2026 to link a comparable South African restaurant franchising story, reinforcing that staged stake acquisitions remain a genuine middle path between staying small and selling out early.
