Level 5 Capital Partners

Level 5 focuses on acquiring and scaling multi-unit franchise operators in mature, cash-flowing systems such as fitness, health and wellness, and food and beverage. The firm targets regional groups with strong unit-level economics and a proven operator team, then provides capital for de novo unit development and tuck-in acquisitions to build territorial density. The thesis relies on institutionalizing operations and expanding within exclusive franchise territories, rather than betting on unproven brands.

The firm sources investments through long-standing relationships with franchise brand leadership, area developer networks, and franchisee communities—channels that are difficult for generalist sponsors to replicate at scale. Post-acquisition, Level 5 embeds an operating framework that standardizes P&L reporting, marketing spend, and staffing models across locations, effectively converting a collection of independent small businesses into a centrally managed enterprise.

Level 5 invests in the operating entities that own and run the franchise locations—the franchisee groups—not the corporate franchisor brands. This distinction means the firm underwrites unit-level cash flows from a portfolio of existing operating stores, alongside identified white space for new unit growth, rather than valuing a brand's royalty stream or corporate overhead.

The firm's investments are concentrated in the Southeast and Sun Belt regions of the United States, with a particularly strong footprint in Georgia, Florida, Texas, and the Carolinas. These markets align with population migration patterns, favorable regulatory environments for franchising, and the firm's ability to provide hands-on operational support from its Atlanta base.

Managing Partner Chris D. Smith leads the investment committee. The firm operates a flat structure where senior investment professionals and operating partners jointly conduct due diligence, with an emphasis on evaluating the operator-investment fit alongside standard financial and legal workstreams. Decisions are typically made within the partnership without a broader external investment committee.

Level 5 has historically used both committed fund structures and deal-by-deal co-investment vehicles. In recent years the firm has trended toward fund structures that give it more discretion over hold periods and follow-on capital deployment, including the use of continuation vehicles, as demonstrated by its January 2024 transaction extending a platform's hold timeline.

Operating partners at Level 5 are integral to both pre-acquisition diligence and post-close value creation. They evaluate operator talent, assess store-level margin improvement opportunities, and often serve on portfolio company boards or in interim management roles. This operational layer is central to the firm's ability to professionalize multi-unit franchise businesses that were previously owner-operator run.