Can you share the size of the bd's Mongolian Grill deal?

Without going into detail, I would say it was a reasonable multiple of EBITDA, and by reasonable, I mean in the 5 times to 6 times range. The world of reason is returning to multiples.

Meaning?

In the last several years, average multiples were in the 7 times to 8 times range. Some went as high as double digits with equity buyers, who liked the stability of cash flow in this industry. Leverage was so available to them that they could afford to pay more. That's unusual for private transactions.

How has management been changed?

What we now have at bd's is [CEO] Rodger Head, who also runs [Kinderhook's 97-unit] Burger King franchise. He comes from an operations background and understands both the company and franchise side. [Founder Billy Downs] is going to be involved in franchising and very much in marketing.

Why is the bd's model appropriate for Kinderhook's portfolio?

We liked the segment because it is underpenetrated, and we feel like there's growth opportunity. It also has Gen Y appeal, meaning bd's has real features of today: eatertainment, fun, family orientation. Basically, you get into the transaction of the restaurant immediately. There's no waiting around for some server to arrive.

What do you like about the model's financial performance?

I like the unit economics. I thought they were surprisingly good. The average unit volume is about $2.5 million on a model of 5,000 square feet. The P&L integrals are good to very good. The same-store sales have been flat in a business essentially driven by Detroit. That spoke a lot about the concept.

What are your plans for capital spending?

We got the funding over to Billy {Downs] to do what we needed to do to buy the business. We bought the assets. We have a pot of money left for growing the business. As we speak, we are ramping up the franchising.

Will you come up with a new prototype?

The brand identity will be more consistent from real-estate option to real-estate option. We will work to cost-engineer these buildings to be more cost efficient. The tweaking will give us a more standard layout, materials and costs.

Ultimately, what kind of savings can you realize in the build out?

For a cost-engineering standpoint, maybe we can improve it 20 percent.

How much have build outs cost?

I can't tell you firsthand, but the newer ones they have done are conversions in the $2.3 million range. It depends on the kind of real estate. The one I quoted was a conversion of Shoney's, which they gutted.

What returns do you expect?

Our pro-forma work suggests you could do an unleveraged return of 30 to 35 percent and leveraged in the 80 percent range.