Whether it’s people who visit Northern Michigan during the summer or Florida during the winter months, a staple for many is to stop and get ice cream, fudge or candy at a Kilwins location.
Based in Petoskey, Michigan, Kilwins has locations in 26 states, which is why some recent news regarding the company might have raised some eyebrows for tourists.
At the beginning of March, it was announced that Kilwins had been sold to a Levine Leichtman Capital Partners, a private equity firm based in Los Angeles.
Originally founded in 1947 by Don and Katy Kilwin, third owners Don and Robin McCarty decided to sell the business after purchasing it in 1995.
“It has been a joy for Robin and [me] to have been a part of this company for the last 43 years,” Don McCarty said in a statement. “Our caring, loyal franchisees are the basis of our long-term success, and the Kilwins team has made incredible products, built an exceptional platform and has successfully created meaningful and lasting experiences for our customers. As we look to the company’s future, we are confident that LLCP has the resources and franchise experience to lead Kilwins in its next phase of growth, and will provide dynamic, thoughtful, and strong customer focus and leadership.”
Levine Leichtman Capital has a portfolio that also includes Tropical Smoothie Cafe, Mountain Mike’s Pizza, Nothing Bundt Cakes and Wetzel’s Pretzels.
But is a longtime local, family-owned business selling to a private-equity firm usually the best thing for that business and its customers in the long term?
Should tourists who make Kilwins a staple of their vacation experience be concerned?
Van Conway, a noted financial consultant and expert worldwide who is the CEO of Van Conway & Partners, said the new owners will likely focus on rapid growth and expansion, which would be good news for those who love Kilwins.
“Kilwins is a pretty unique brand and they would be foolish to really change the name or change the format,” Conway said. “It’s not a tragedy because they’d be a fool to materially change what you and I know about Kilwins and why we go there. They just want to grow. They want to take what’s in Petoskey and put it in another 100 cities. The family that owned it wouldn’t have had the capital to do that.”
Conway said the McCartys must have gotten a price they liked in order to sell, and that private equity firms usually are not long-term investors.
They look to eventually flip entities, but Kilwins presents a unique growth opportunity from others that Levine Leichtman Capital Partners own in that there isn’t the type of competition a pizza, sub or burger chain constantly has.
“In some respects, they don’t have a lot of competitors and they have a lot of brand loyalty,” Conway said.
Conway said he wouldn’t be surprised if Levine Leicthman Capital Partners tries to grow the company from nearly 150 to around 500 stores before flipping, but doesn’t want to fully speculate on their intentions.
While seeing a private equity company take over a beloved local business understandably can make many nervous, it’s likely fans of Kilwins won’t have anything to worry about in the near future.
“Kilwins is a pretty amazing operation,” Conway said.