Franchise Equity Partners Forms Strategic Partnership with Valvoline to Accelerate Growth in Texas

Rhea-AI Summary

Franchise Equity Partners (FEP) has announced a strategic partnership with Valvoline Inc. to acquire 38 company-owned stores in West Texas, including locations in Austin, San Antonio, El Paso, and surrounding areas. The stores will be operated under a newly formed entity called Velocity Auto Care. FEP has assembled a leadership team including Robert Fish as CEO, Ashish Chapagain as CFO, and Spencer Mason as VP of Operations. The partnership aims to strengthen Valvoline's brand presence and growth strategy across Texas while maintaining their focus on preventive automotive maintenance services.

Positive

• Strategic expansion of Valvoline's franchise network in Texas market
• Partnership with experienced franchise operator (FEP) capable of scaling operations
• Assembly of experienced leadership team with industry expertise

Negative

• Reduction in company-owned store count by 38 locations

Insights

Financial Analyst

This strategic partnership marks a significant development for Valvoline, involving the sale of 38 company-owned stores in key Texas markets. The deal aligns with Valvoline's asset-light strategy, transferring operational responsibilities while maintaining brand presence through franchising. The partnership with FEP brings substantial operational expertise and growth capital, potentially accelerating Valvoline's expansion in the region without direct capital investment.

The assembled leadership team, including veterans from major franchise operations and former Valvoline executives, suggests a well-structured transition plan. This move should optimize operational efficiency while reducing corporate overhead costs. The deal strengthens Valvoline's franchise network in Texas, a high-growth market, while maintaining brand standards through an experienced operator.

Market Research Analyst

The Texas market represents a strategic growth opportunity, with Austin and San Antonio among the fastest-growing metropolitan areas in the U.S. The formation of Velocity Auto Care with experienced leadership indicates a strong focus on market expansion and operational excellence. The partnership model allows Valvoline to maintain brand presence while reducing operational complexity and capital requirements.

The addition of former Valvoline executives to the board ensures continuity in brand strategy and market understanding. This structure typically results in improved local market penetration and faster expansion capabilities, as franchise operators often have better local market knowledge and relationships.

FEP to Acquire 38 Valvoline Company-Owned Stores in Austin, San Antonio, El Paso and West Texas Markets

NEW YORK, Nov. 19, 2024 /PRNewswire/ -- Franchise Equity Partners (FEP), a private investment firm on a mission to create long-term partnerships with quality franchisees and franchisors, today announced a strategic partnership with Valvoline Inc., the trusted leader in preventive automotive maintenance. As part of the agreement, FEP will acquire 38 of Valvoline's company-owned stores in West Texas, including markets in Austin, San Antonio, El Paso, and surrounding regions. The stores will be franchised and operated under the newly formed entity, Velocity Auto Care.

"Partnering with Franchise Equity Partners advances Valvoline's growth strategy across Texas," said Lori Flees, President and CEO of Valvoline Inc. "FEP's exceptional track record, deep operational expertise, and ability to execute large-scale growth initiatives made them the right choice for this partnership. We are confident this collaboration will strengthen the Valvoline Inc. brand and provide customers across the region with quick, easy, trusted preventive maintenance services."

"From the initial meeting we had 15 months ago, we knew that Valvoline was the type of company we wanted to partner with – their culture, focus on people, and performance are top level," said Robert Daniel, Partner and Head of Capital Markets at FEP.

FEP has assembled a best-in-class leadership team to run the business. Robert Fish, CEO of Velocity Auto Care, brings extensive experience in franchise operations, including leading franchise portfolios with brands such as European Wax Center and Massage Envy. He will be supported by Ashish Chapagain, Chief Financial Officer, and Spencer Mason, VP of Operations. Tim Miller, former Chief Financial Officer of TBC Corporation, will join Velocity Auto Care's Board of Directors as Chairman, along with former Valvoline Inc. Chief Commercial & Marketing Officer, Heidi Matheys.

"We've built a strong leadership team that will drive the growth of the Valvoline Instant Oil Change brand across Central and West Texas," said Robert Fish, CEO of Velocity Auto Care. "We understand the value of the brand, and we're focused on building an organization that will deliver an experience that exceeds the expectations of our team members and customers."

Mike Esposito, Co-Founding and Managing Partner of FEP, also expressed his enthusiasm for the partnership, stating, "Partnering with Valvoline is a testament to FEP's ability to spot and seize exceptional growth opportunities. This partnership highlights our commitment to building scalable, sustainable businesses alongside visionary franchisors."

The acquisition of these 38 stores is a pivotal step in FEP's mission to partner with top-tier brands and franchisees for long-term growth. FEP has expertise in executing complex franchise operations and can deliver results at scale.

For more information about Franchise Equity Partners, please visit https://www.fep-us.com/ or follow the firm on LinkedIn.

About Franchise Equity Partners:
Franchise Equity Partners is a private investment focused on partnering with leading franchisee businesses and their owners. Its differentiated approach combines extensive corporate finance and operating experience with $1 billion of committed capital to enable growth, ownership simplification, succession and estate planning, among other strategic business opportunities.

About Valvoline Inc.
Valvoline Inc. (NYSE: VVV) delivers quick, easy, trusted service at more than 2,000 franchised and company-operated service centers across the United States and Canada. The company completes more than 28 million services annually system-wide, from 15-minute stay-in-your-car oil changes to a variety of manufacturer-recommended maintenance services such as wiper replacements and tire rotations. At Valvoline Inc., it all starts with our people, including more than 11,000 team members who are working to grow the core business, expand the company's retail network, and plan for the vehicles of the future. For more information, visit vioc.com.

Contact:
Alyssa Pfitscher
Fish 919
954-893-9150
apfitscher@fish-consulting.com 

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SOURCE Franchise Equity Partners

FAQ

How many Valvoline stores did FEP acquire in Texas?

FEP acquired 38 Valvoline company-owned stores in West Texas, including locations in Austin, San Antonio, El Paso, and surrounding regions.

What is the name of the new entity operating the acquired Valvoline stores?

The acquired stores will be operated under the newly formed entity called Velocity Auto Care.

Who will be the CEO of Velocity Auto Care managing the VVV stores?

Robert Fish will serve as CEO of Velocity Auto Care, bringing experience in franchise operations from brands like European Wax Center and Massage Envy.

Which Texas markets are included in the Valvoline-FEP deal?

The deal includes Valvoline stores in Austin, San Antonio, El Paso, and surrounding regions in West Texas.