There is an art to executing successful M&A and the biggest advantage is in being thoroughly prepared to demonstrate exactly why a given deal makes strategic and financial sense — or why it doesn’t. Thorough due diligence can challenge the investment thesis and the assumptions on which it is built. These are some of the reasons why you should conduct commercial and operational due diligence when buying a restaurant chain. It may seem like a big investment, but the ROI makes it worth it.

1. Why You Should Do Proper
Due Diligence in Your Next Investment

2. © 2023 Aaron Allen & Associates | www.aaronallen.com 2
There is an art to executing successful M&A and the biggest advantage is in
being thoroughly prepared to demonstrate exactly why a given deal makes
strategic and financial sense — or why it doesn’t. Thorough due diligence can
challenge the investment thesis and the assumptions on which it is built.
In essence, it’s a pressure test of where the investment target is strong, and where
it is weak (in terms of financial, legal, commercial, operational, and technological
standards) and, further determining how it could grow down the line.
Without Exception Due Diligence Reveals New
Perspectives and Insights Into the Target

3. © 2023 Aaron Allen & Associates | www.aaronallen.com 3
MITIGATE RISK
1
Commercial and operational due
diligence helps identify and assess
potential risks associated with
investments in the restaurant and
foodservice industry, enabling
private equity firms, family offices,
and restaurant investors to make
informed decisions and mitigate
risks effectively.
TO MAKE SURE WHAT YOU
THINK THEY’RE BUYING…
…IS NOT THIS

4. © 2023 Aaron Allen & Associates | www.aaronallen.com 4
VALIDATE ASSUMPTIONS
2
Thorough due diligence validates
key assumptions and projections
related to market potential,
customer demand, competitive
landscape, and operational
efficiency, providing a solid
foundation for
investment strategies.

5. © 2023 Aaron Allen & Associates | www.aaronallen.com 5
UNCOVER GROWTH OPPORTUNITIES
3
A specialized consulting firm can
uncover untapped growth
opportunities within the target
market, helping investors identify
areas for expansion, diversification,
and innovation.
INDEPENDENTS CHAINS
FOR EXAMPLE, EXAMINING THE UAE QSR FOODSERVICE
LANDSCAPE WE FIND UNTAPPED OPPORTUNITIES FOR CHAINS IN
SEGMENTS WHERE INDEPENDENTS ARE SUCCESSFUL
Source Aaron Allen & Associates based on industry sources
Burger
Bakery Chicken
Burger
Chicken
Bakery
WHITE
SPACE
The Largest Segment
Among Independent
LSRs is Untapped
for Chains

6. © 2023 Aaron Allen & Associates | www.aaronallen.com 6
GETTING DEALS DONE
Whether you are buy-side or sell-side, the market is full of opportunities, the stakes are high, and
quality advisors are worth their weight in gold. This will prove to be an extraordinarily important
vintage year for parties on all sides of a deal.
BUY SIDE ADVISORY SELL-SIDE ADVISORY
Industry Intelligence
Investment Thesis
Deal Origination
Commercial Due Diligence
Operational Due Diligence
Post-Acquisition Strategy
Operating Partnerships
Advisory Board
Readiness Audits
Valuation Opinions
Value Enhancement
Strategic Planning
Financial Models
Buyer Identification
Investor Presentations
Deal Management
https://aaronallen.com/services/restaurant-mergers-acquisitions

7. © 2023 Aaron Allen & Associates | www.aaronallen.com 7
ENHANCE DECISION-MAKING
4
By conducting
comprehensive due
diligence, investors gain
access to reliable market
intelligence and expert
insights, enabling them
to make data-driven
decisions with
confidence.
Geopolitical Impacts
What regulations are targeting
foodservice operators (business
regulations, trade policies, etc.)?
Macroeconomic Trends
Are conditions generally favorable or
unfavorable for current operations?
What are the forecasts?
State of the Industry
How are competitive operators
performing relative to other
industries and segments?
Opportunity Identification
What are the biggest areas of
opportunity (for growth, expansion,
optimization, etc.)?
Risk Mitigation
What are the risks posing a threat
relative to the business, now and in the
future? How can we address them?
Technology Innovations
What are the predictions of and
implications for existing and
emerging technologies?
Competitive Trends
Which companies and competitors
will pose the most substantial
threats, now and in the future?
Dining Trends
How will consumer dining behavior
and consumption patterns be
different in five years?
Decision Influencers
How is the decision-making
process changing within
modernized organizations?
Societal Trends
How will emerging and anticipated
societal trends impact the
organization? How should we adjust?
Market Landscape
Which markets are growing fastest?
How is this expected to change and
evolve? How should we adapt?
Environmental Forces
What proposed environmental policy
changes could impact the costs
within the business model?
Geopolitical
Impacts
Macro-
Economic
Trends
Competitive
Trends
Tech
Innovations
Risk
Mitigation
Dining
Trends
State of the
Industry
Environmental
Forces
Decision
Influencers
Opportunity
Identification
Market
Landscape
Societal
Trends
The better the question, the better the answer…
Part of the content is redacted, full
information is available only to clients.

8. © 2023 Aaron Allen & Associates | www.aaronallen.com 8
OPTIMIZE OPERATIONAL EFFICIENCY
5
Operational due diligence helps
identify opportunities for cost
optimization, process improvement,
and enhanced operational
efficiency, leading to increased
profitability and scalability.
TAKING AN EXTRA STEP, WITH INDUSTRIAL ENGINEERING
PRACTICES WE ARE ABLE TO IDENTIFY AREAS TO OPTIMIZE
PERFORMANCE, FROM THE P&L TO THE FLOOR PLAN

9. © 2023 Aaron Allen & Associates | www.aaronallen.com 9
EVALUATE THE MANAGEMENT TEAM
6
Specialized consulting firms can
assess the capabilities and
effectiveness of the target
company's management team,
ensuring they have the necessary
expertise to drive success and
deliver on strategic objectives.
Board
CEO
CTO
CFO
CMO (Brand)
R&D
Advertising
PR
Creative
CDO COO
President
International
CAO

10. © 2023 Aaron Allen & Associates | www.aaronallen.com 10
VALIDATE FINANCIAL PERFORMANCE
7
Thorough financial due diligence
validates the accuracy and reliability
of financial statements, ensuring
investors have a clear
understanding of the target
company's financial health and
performance.
REVENUE
COSTS
PROFITS &
PRODUCTIVITY
INVESTMENT
OTHER DRIVERS
LEVERS
Unit Growth
AUV
Franchising
Other Considerations
Food Cost
Labor Cost
Occupancy
SG&A
Others
Margins
Productivity Metrics
Returns Ratios
ENTERPRISE
VALUE
DRIVERS
Internal
External
Valuation Multiple
DCF
Metrics
Part of the content is redacted, full
information is available only to clients.

11. © 2023 Aaron Allen & Associates | www.aaronallen.com 11
ASSESS THE COMPETITIVE LANDSCAPE
8
A consulting firm can analyze the
competitive landscape, providing
insights into market positioning,
competitive advantages, and
potential threats, enabling investors
to develop effective market entry or
expansion strategies.
*
Part of the content is redacted, full information is available only to clients.

12. © 2023 Aaron Allen & Associates | www.aaronallen.com 12
IDENTIFY POTENTIAL SYNERGIES
9
Commercial due diligence helps
identify potential synergies
between the target company and
existing portfolio companies,
facilitating post-acquisition
integration and maximizing
value creation.
Horizon 1 Horizon 2 Horizon 3
… … …
$0M
$50M
$100M
$150M
$200M
$250M
WE USUALLY WORK WITH THREE SCENARIOS TO ASSESS DIFFERENT
LEVELS OF RISK/REWARD AND ORGANIZING INITIATIVES AND
SYNERGIES GAINED ACROSS THREE TIME HORIZONS

13. © 2023 Aaron Allen & Associates | www.aaronallen.com 13
EXPERTISE AND INDUSTRY KNOWLEDGE
10
Hiring a specialized consulting firm
brings in-depth industry
knowledge, experience, and
expertise, enabling private equity
firms, family offices, and restaurant
investors to benefit from the
insights and recommendations of
seasoned professionals who
understand the unique dynamics of
the restaurant and
foodservice sector.
DISCOVER
DEVELOP
DESIGN
DEPLOY
DEBRIEF
We find that a process of iterative refinement is often the best approach when
engaged in commercial and operational due diligence.

14. SUPPORTING THE ENTIRE DEAL PROCESS
SOURCING DUE DILIGENCE INVESTMENT ENHANCE EV EXIT
Country Market and
Industry Landscape
Operational Due
Diligence
Concierge Service,
Deal Management
Portfolio
Rationalization
Identifying Potential
Buyers
Valuation
Benchmarks
Commercial Due
Diligence
100-Day Plan/ Value
Creation Strategies
Growth and
Expansion
Maximizing Value
at Exit
Target Identification
(List & Priority)
Assemble DD Team
(Legal, Financial,...)
Post-Acquisition
Integration
Performance
Optimization
Negotiations
Deal Sourcing,
Introductions
Manage Diligence at
a Country Level
Management Team
Assessments
On-Going Support/
Operating Partner
https://aaronallen.com/services/due-diligence
DEAL PROCESS AND AA&A PHASED SUPPORT

15. Make Smart Investments with Better
Buy-Side Intelligence

16. Aaron Allen & Associates works alongside senior executives of the
world’s leading foodservice and hospitality companies to help
them solve their most complex challenges and achieve their most
ambitious aims. We help businesses identify, size, and seize
opportunities within a division, a brand, a company, a country, or
on a new continent, finding markets and segments that
accentuate the organization’s strengths and mitigate its risks.
Our clients span six continents and 100+ countries, collectively
posting more than $300b in revenue. Across 2,000+
engagements, we’ve worked in nearly every geography, category,
cuisine, segment, operating model, ownership type, and phase
of the business life cycle.
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Suite 3500
Chicago, Illinois 60601
+1-312-701-3500
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+1-407-936-1010
www.aaronallen.com