Aneil Lala and Neal Wadhwa wanted to develop what Lala called “a new style of multi-unit franchise ownership.” Looking to fuse their financial acumen with a management approach that “brings humanity” to the business, the two formed Legacy Capital Partners and are beginning to see the results of their strategy.
Since acquiring 10 Wendy’s restaurants in 2020, “we’ve grown EBITDA almost 60 percent,” said Wadhwa of gross earnings. “We raised customer satisfaction scores from the mid-70s to the low 80s. We’ve been able to bring turnover down to 82 percent.” The average turnover rate runs as high as 150 percent in fast food restaurants.
Same-store traffic is also growing at their restaurants, all of which are in Maine. “The foundation was there,” said Wadhwa of the portfolio of restaurants they bought, “but we brought our own recipe for success.”
That recipe includes a combination of data and decency, he continued. On the data front, Lala said they invested in developing technology that makes information accessible to all employees and helps general managers make decisions quickly to respond to what they’re seeing at the restaurant level.
“Here’s the big challenge in the industry: there’s a lot of pipes of data,” said Lala. “So, we’ve put this on one platform and synthesized it.” Employees can see what’s driving store performance and “the GM at each store is empowered to make the right decision at their stores.”
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Their approach to humanizing the business, meanwhile, means paying competitively while also looking beyond compensation to build a culture of engagement. “From a culture perspective, we’re there in market,” said Lala. “That’s the No. 1 driver of this part of our success.” He and Wadhwa take the time to communicate with employees, which “opens us up to hear the hard truths” and respond accordingly.
After the acquisition they revamped the employee benefits program and opened up healthcare coverage to all employees, now with 80 percent participation. They also make clear that opportunities are there to grow within the company.
“One of the primary drivers for retention is to have a path. You have a development plan. And there are regular check-ins,” said Lala. “It’s exciting to see it work.”
Lala and Wadhwa met at the University of Pennsylvania’s Wharton School—Lala was getting his MBA and Wadhwa a bachelor’s in finance—and both are former public equity investors specializing in the restaurant sector. Before creating Legacy Capital Partners in 2019, Lala worked at Schonfeld Strategic Partners and Wadhwa was at Candlestick Capital.
“Our paths paralleled,” said Lala and both were “ready to work in the business” as their parents and extended family had done. Lala’s parents, who immigrated to the United States four decades ago, were entrepreneurs and involved in real estate, while extended family members were franchisees in Dunkin,’ Wingstop and Subway.
Wendy’s, ranked No. 14 on the Franchise Times Top 500 with $12.5 billion in system sales in 2021, was at the top of their list as they began evaluating acquisition opportunities. It has a “recognizable and enduring brand,” said Lala. “They do a wonderful job of protecting their brand equity … and they’ve had their finger on the pulse of innovation.”
Legacy Capital Partners has real estate holdings and is also an investor in ResQ, a startup launched in 2018 that provides restaurant equipment repair and maintenance services.