Franchise M&A Market Sees Renewed Activity and Confidence in 2026

The franchise mergers and acquisitions market is experiencing increased momentum in 2026, following a period of subdued activity and recalibrated valuations. This development is marked by greater buyer demand, especially among operators managing between 10 and 100 units.

Operators have rebuilt liquidity after recent inflation shocks, and many are now prepared to pursue acquisitions as borrowing costs decline from their 2023–24 highs. Franchisors are also increasing refranchising efforts, while expansion capital availability has stabilized, prompting more operators to re-enter the market.

Recent high-profile transactions, such as a private investor consortium planning to take Denny’s private and Bain Capital’s acquisition of Sizzling Platter, reflect renewed confidence in the sector. Other notable deals in 2025 included RaceTrac’s acquisition of Potbelly for $689 million and Rhone Group’s purchase of Freddy’s Frozen Custard & Steakburgers for about $700 million.

Valuations for owner-operated and capital-intensive franchise businesses have adjusted, creating new opportunities for buyers. The market now shows a division, with strong brands that demonstrate robust unit economics and digital capabilities achieving premium prices, while weaker systems are trading at discounts or seeing limited interest.

What the numbers show

• RaceTrac acquired Potbelly for $689 million in 2025
• Rhone Group purchased Freddy’s Frozen Custard & Steakburgers for approximately $700 million in 2025
• The 10- to 100-unit operator segment is a focus for current M&A activity

Three primary M&A approaches are observed among operators in the 10- to 100-unit range: generational transitions and family exits, growth-oriented acquisitions, and purchases of distressed or opportunistic assets. In growth acquisitions, lenders assess the operator’s readiness, cash flow strength, leverage, and the need for additional capital to support the transaction.

For distressed or opportunistic acquisitions, operators are required to plan for realistic turnaround periods and collaborate with lenders to determine capital needs for business stabilization. Those with comprehensive banking relationships are positioned to benefit from customized financial solutions and more efficient decision-making processes.

The franchise industry is entering a dynamic investment cycle in 2026, supported by stable interest rates, improved unit-level performance, and increased institutional confidence. Sectors expected to lead M&A activity include quick-service and fast-casual restaurants, health and wellness, home services, automotive services, and pet care and childcare businesses.

As franchisors increase refranchising and more operators return to the market, the environment is set for continued deal activity across multiple franchise segments. Buyers are finding opportunities as valuations settle and expansion capital becomes more accessible.

* This article is based on publicly available information at the time of writing.