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Franchise Finance

Kutak Rock is one of the few firms in the country that has a dedicated franchise finance practice group. As a result, the firm has established strong relationships with multiple nationally recognized lenders and major franchisors in the industry. In recent years the firm has represented franchise lenders in loan transactions involving collateral located in all 50 states and with an aggregate loan amount well in excess of $5 billion. This group handles syndicated, sponsor and single lender loan credit facilities secured by a range of businesses, including franchised restaurants, national and regional restaurant brands, convenience and gas, hospitality and retail fitness.

The firm’s franchise finance lawyers have extensive experience structuring and documenting franchise loan transactions involving real property and personal property collateral, as well as loan portfolio sales and acquisitions. Our lawyers regularly undertake primary responsibility in documenting and negotiating term, construction, development and revolving credit facilities on behalf of franchise finance lenders. The firm’s representation has involved all aspects of such transactions, including undertaking collateral due diligence (including title, survey and UCC-related due diligence) and corporate due diligence, reviewing and negotiating legal opinions, reviewing franchise agreements and lease agreements and securing agreements with franchisors and landlords on behalf of the lender.

Kutak Rock lawyers also are involved in servicing matters with respect to existing franchise loan and lease portfolios, including drafting and negotiating loan modifications, collateral substitution agreements, consent agreements (including consents related to changes of control or equity transfers and financial covenant waivers or modifications), and assignment and assumption agreements, and undertaking required due diligence with the underlying collateral and on the parties involved in the transaction. Kutak Rock’s experience in routine servicing and surveillance matters as well as negotiation and closing of securitization transactions ensures that the client’s interests are advanced in all stages of the financing transaction.

The franchise loan industry is cyclical in nature and the firm has long represented franchise finance lenders in bankruptcy, restructuring and workout proceedings dating back more than 30 years. The firm has completed hundreds of engagements in this area in virtually every state in the United States.Because the firm has been so actively involved in structuring transactions on behalf of these lending units, we are able to quickly and cost-efficiently apply our institutional knowledge to address issues in bankruptcies, restructurings and workouts.