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Roark Capital is selling Nothing Bundt Cakes to KKR for $2 billion, according to reports by The Wall Street Journal and Reuters, both of which cited sources familiar with the matter. KKR declined to comment, and Roark did not respond immediately to a request for comment.

The fast-growing dessert chain had 660 units at the end of 2024, after opening more than 100 in the year, according to its most recent franchise disclosure document. The brand opened its 700th location last May.

In 2024, the chain had an average net revenue of over $1.4 million, among stores open longer than two years, per its FDD.

Among the base of units open two years or more, Nothing Bundt Cakes reported an average four-wall EBITDA of $316,591, or about 21.6% in 2024. Royalties and marketing fees from the average mature store amounted to $161,455, or 11% of sales, per its FDD.

The brand’s unit economics are strengthened by the simplicity of its menu — varying sizes of bundt cakes in different flavors — and operations. The cost-of-goods sold for its mature stores in that year was about 23.5%, and labor about 27.5%. The combination of strong unit-level economics and rapid unit growth could explain why the chain is an attractive investment for private equity. 

KKR is invested in a number of restaurant-sector companies, including MyPizzaTechnologies, a platform meant to digitize small- and medium-sized pizza brands, according to its portfolio. The private equity firm also co-led a $135 million funding round for Restaurant365 in 2023, and has a significant investment in Rebel Foods, a ghost kitchen company based in India.

Roark, which owns Inspire Brands, Subway and a majority stake in Dave’s Hot Chicken, is a major player in the restaurant industry, while KKR is a relative outsider these days. The acquisition of a major franchisor could indicate greater interest by private equity in the U.S. restaurant sector. 

Denny’s sold itself to a group of private equity buyers and one of its franchisees late last year, while private equity firms have been buying up franchisees — like 7Crew — and encouraging more development.

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