Rosenthal & Rosenthal provided a $9 million credit facility consisting of a revolving line of credit and a term loan to a New York-based company that manufactures and distributes food products and manages a franchise network of more than 110 restaurants and stores.

Despite annual sales of more than $50 million and customer relationships with retailers like Walmart, Costco, Kroger, Wegmans, ShopRite and Target, the business found its bank unresponsive to its financing needs. It turned to an advisor to help it find a new funding source, and after a center of influence referral source presented the opportunity, Rosenthal was eager to get involved, particularly given the company’s combination of wholesale sales and franchise opportunities. Adding even more to Rosenthal’s interest was what it perceived as significant IP value that was not being leveraged.

“We were very persistent and proactive from an early stage,” Robert Schnitzer, senior vice president of business development at Rosenthal & Rosenthal, says. “Like many businesses, the company faced some financial challenges, but we believed in the success of their product and were committed to making this work.”

To get to the final deal, which included a $5 million term loan and a $4 million revolving line of credit, Schnitzer and his team had to navigate several complex legal and tax issues while conducting analysis to better understand the franchise element of the business as well as its growth trajectory.

“The product was growing within the company’s organic core customer base and they were developing new customers after introducing the product to club stores and mass retailers,” Schnitzer says. “Our initial analysis and thorough due diligence concluded there was significant collateral, which gave Rosenthal a lot of flexibility in terms of structuring a total credit facility to meet their funding needs.”