This week's newsletter brands
This week, a key theme shaping franchising heading into 2026 is renewed private equity interest in restaurant M&A, despite ongoing economic pressure.
High interest rates, rising labor costs, expensive real estate, and softer consumer spending continue to weigh on franchise performance, particularly in legacy restaurant brands.
Yet dealmakers point to a strong pipeline of transactions in the back half of 2025 as a sign that M&A activity could carry into 2026, supported by significant private equity capital still sitting on the sidelines.
Importantly, investors are becoming far more selective. Private equity firms are prioritizing brands with defensible unit-level economics, stable profitability, and a credible growth story, while struggling legacy concepts face increasing pressure to turn around performance or pursue a sale.
Within that framework, several PE investors highlight healthy food restaurant concepts as an area of growing interest for 2026.
For more information into healthy food restaurant franchises, check out this list there.
In the meantime, we'll dive into 3 important recent news in the restaurant franchise industry: big M&A moves, bankruptcies and the like. Let's dive in!
Eggs Up Grill closed out 2025 with its strongest year on record, opening 18 new restaurants and achieving 20 consecutive quarters of positive same-store sales.
The breakfast-and-lunch franchise continues to gain traction with multi-unit operators, supported by steady traffic growth and disciplined development strategies.
The brand now exceeds 100 operating locations, with a growing pipeline of signed development agreements heading into 2026.
Eggs Up Grill’s performance highlights how daytime dining concepts with strong unit economics continue to attract franchisee demand even in a cautious capital environment.
Hardee’s has filed a lawsuit against one of its largest operators, ARC Burger, alleging repeated failures to pay royalties, marketing contributions, rent, and other required fees.
The dispute has escalated after months of alleged defaults, prompting Hardee’s to seek termination of franchise agreements tied to the operator’s portfolio.
As a result, approximately 77 Hardee’s locations are expected to close, with many already shuttered or in the process of winding down. The affected restaurants are spread across several markets, amplifying the operational and employment impact of the dispute.
While Hardee’s has emphasized that this situation is isolated to a single franchisee, the case highlights the financial strain that can arise in large multi-unit portfolios.
California Pizza Kitchen has been sold to a group of investors led by Convive Brands, with financial backing from Bain Capital.
As part of the transaction, Convive Brands will take over responsibility for global operations and franchising of the iconic casual-dining brand.
Founded in 1985, California Pizza Kitchen operates roughly 120 restaurants worldwide and also maintains a sizable consumer packaged goods business through grocery-store frozen pizza sales.
The deal reflects continued private-equity interest in established restaurant brands with diversified revenue streams.
Eggs Up Grill is a breakfast and brunch franchise that serves a variety of classic morning dishes, offering a cozy and welcoming dining experience with a focus on quality breakfast options.
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Hardee's is a fast-food restaurant franchise known for its charbroiled burgers, breakfast items, and signature biscuits, providing a quick and flavorful dining experience with classic American favorites.
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California Pizza Kitchen is a casual dining franchise known for its innovative pizzas, salads, and pasta dishes inspired by California flavors.
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