GE Capital, Franchise Finance Lends $25MM to Mellow Mushroom Franchisor

GE Capital, Franchise Finance recently closed a $25MM credit facility for Mellow Mushroom franchisor, Home-Grown Industries of Georgia, Inc. (HGI). The financing consisted of a five-year senior term loan of $21MM and a $4MM revolving credit facility. Proceeds were used to complete a partner buyout, refinance the company’s existing senior debt, as well as provide additional funds for new unit growth. Funding was provided through GE Capital, Franchise Finance's bank affiliate, GE Capital Financial, Inc.

Headquartered in Atlanta, HGI is the franchisor of more than 100 Mellow Mushroom restaurants. In addition to Mellow Mushroom’s franchised units, HGI owns and operates three Mellow Mushroom units in Austin, Texas, Panama City Beach, Fla., and Tuscaloosa, Ala.

“From start to finish, we were impressed with GE Capital’s industry understanding and their ability to move nimbly and effectively in getting this transaction funded,” says Richard Brasch, CEO of Mellow Mushroom. “Working with a lender like GE, that is knowledgeable and well versed in the restaurant arena, makes a tremendous difference.”

Founded by three Georgia college students in 1974, Mellow Mushroom currently operates 92 of its 100 units in six southeastern states, including Georgia, South Carolina, North Carolina, Tennessee, Alabama, and Florida. This is a new relationship for GE Capital.

“We appreciate the opportunity to work with new clients to help them meet their business goals,” says Darren Kowalske, president and CEO, GE Capital, Franchise Finance. “Our flexibility and knowledge of the industry helped ensure Mellow Mushroom achieved a loan within a short amount of time.”

The loan closed with the assistance of investment bank, Croft & Bender, which acted as sole advisor to HGI on both the partner buyout as well as for the financing provided by GE Capital.

“Despite a difficult lending environment, the entire loan process went very smoothly thanks to GE Capital,” says Bo Briggs, an investment banker with Croft Bender.

About GE Capital, Franchise Finance

GE Capital, Franchise Finance is a leading lender for the franchise finance market via direct sales and portfolio acquisition. With over 30 years of experience and $15 billion in served assets, we serve over 5,000 customers and over 22,000 property locations. We provide financing for all your business needs. More information is available at www.gefranchisefinance.com or by calling 866-GET-GEFF (438-4333).

GE Capital offers consumers and businesses around the globe an array of financial products and services. GE (NYSE: GE) is Imagination at Work - a diversified technology, media and financial services company focused on solving some of the world's toughest problems. Visit the company's Web site at www.ge.com.