Once an editor at Restaurant Finance Monitor said that “If you were unemployed last month and this month you get a job, one of the first things you’re going to do is what? Go out and eat.” Hence, restaurants are likely the first ones to gain from an improving economy and employment trend.

With more people choosing to dine out these days, it is needless to say that the restaurant industry is poised to benefit. Therefore, as the economy recovers, fast-food restaurants need to step up their game. Right from menu innovation to introducing digital platforms to providing healthy food, all these initiatives are targeted toward meeting consumer preferences. However, this requires substantial capital.

While the big players are already sitting on a cash pile, the new entrants need to infuse capital into their business from time to time. An Initial Public Offering (IPO) of common stock thus acts as a medium for the relatively new players to raise additional capital.

Will the Current Market Turmoil Affect Impending IPOs?

While most of the restaurant stocks that debuted on the stock exchange in the recent times traded much higher than the expected range after their IPOs, the recent turmoil owing to the Chinese stock market debacle could have an impact on the timing and valuation of future restaurant IPOs.