Princeton Equity Group said it closed its third fund, Princeton Equity Partners III, on September 29, bringing in $1.3 billion in commitments. The Dallas- and Princeton, New Jersey-based firm said it reached a first and final close in two months, amid a difficult fundraising environment for private equity.
The fund exceeded its $875 million target, ROI-NJ reported. The firm described the raise as significantly oversubscribed and more than twice the size of its predecessor. ROI-NJ reported that Lazard served as exclusive placement agent and Proskauer Rose LLP as legal counsel. The close came as private equity firms broadly face fundraising challenges, the Dallas Business Journal reported.
Doug Kennealey and Jim Waskovich founded Princeton Equity Group in 2019 and each serves as a co-founder and managing partner. The firm is co-headquartered in Dallas and Princeton, New Jersey, according to the Dallas Morning News. In an interview with the paper, Kennealey said he moved to Dallas in 2010, where his wife is from, and described the city’s institutional private equity scene as having grown significantly, with Goldman Sachs and Morgan Stanley among the firms relocating operations there.
A Franchise-Focused Strategy
Princeton says it has focused on franchisors and multi-location businesses since 2006 and has invested in more than 30. Its portfolio includes KidStrong, a Frisco-based child development program, as well as D1 Training, Barry’s, Massage Envy, Strickland Brothers and European Wax Center, according to the Dallas Morning News. The firm’s announcement also names Amped Fitness and Ellie Mental Health.
Kennealey told the Dallas Morning News that Princeton sees the franchisor model as a source of attractive cash flow and believes businesses built around in-person services may be less exposed to disruption from artificial intelligence. Those are the firm’s investment views, not guarantees about how individual companies will perform.
Princeton says it looks for strong franchisee economics, profit margins and returns on invested capital, along with businesses that can reach break-even quickly and have experienced founders or management teams. The firm’s investments span areas including mental health services and hydraulic hose repair and replacement. The Dallas Morning News reported that Princeton uses proprietary software called FusionPoint AI to identify companies and founders, and that it typically approaches privately owned businesses directly or through founder and CEO relationships rather than relying on auctions.
Fundraising Grows Across Successive Funds
Princeton’s first fund closed at $352 million in 2021 after fundraising began in January 2020. Its second fund raised $575 million in about five months, Kennealey told the Dallas Morning News. Fund III is larger than both predecessors and, according to the paper, has no sector focus beyond the firm’s franchisor strategy; about 30% of its investors are from outside the United States.
Princeton’s announcement credited the close to commitments from existing limited partners and new U.S. and international institutional investors. The firm said its investor base expanded, particularly in Europe, and that it added relationships with global consultants and leading endowments. Kennealey told the Dallas Morning News that some European investors were attracted to U.S. franchisors because franchising is less common in Europe outside restaurants. He and Waskovich met more than two decades ago while working as associates at a Boston private equity firm and spent most of their careers as generalist investors before focusing on franchising.
Why Franchising Is Having a Moment
What the 2026 Franchise Forecast Shows
The International Franchise Association’s 2026 outlook projects U.S. franchise output to rise 1.6%, from $907.3 billion to $921.4 billion. It also forecasts 1.5% growth in franchise establishments, to 845,000, and more than 150,000 additional franchise jobs, bringing employment to nearly 8.9 million. These are sector-wide projections, not realized totals or evidence of Princeton’s investment strategy. The association lists Texas among the 10 fastest-growing states for franchising in 2026. That state-level forecast provides industry context; it does not establish which markets Princeton’s portfolio companies serve or where the firm will invest.
The fundraise lands as the broader franchise sector keeps expanding. Franchise industry output is projected to climb from $907.3 billion to $921.4 billion in 2026, a 1.6% increase, according to the International Franchise Association. The number of franchise establishments nationwide is expected to grow by 1.5% to 845,000 units, while franchise employment is projected to rise by more than 150,000 jobs to nearly 8.9 million.
Kennealey told the Dallas Morning News that franchisors can operate hundreds of locations across multiple states. Princeton’s investment case centers on that business structure, even as private equity firms broadly face fundraising challenges.
