Thursday, July 23, 2009

Will Carlyle Get Dunked...

...with its investment in Dunkin Donuts?

Dunkin Donuts has trouble growing its core markets. And there are holes in other locales even in their core markets.

Four Dunkin' Donuts franchise operators have filed for bankruptcy since June.

Kainos Partners Holding Co., which runs 56 stores in New York, Nevada and South Carolina, filed for Chapter 11, joining three other franchise operators in Tennessee and Florida.

Dunkin' Donuts is owned by Carlyle Group, THL Partners and Bain Capital, who borrowed $1.5 billion to acquire the donut company. A key covenant of the loans requires aggressive expansion, or the loans will come due over the next two years and not be extended.

Thus Carlyle and gang are pushing for more Dunkin expansion, even though the market for them appears weak.

1 comment:

  1. Wenzel,

    How did these PEUs ever get so much money in the first place when the only thing they seem to be capable of now is bankrupting their various business operations?

    Selection bias?