The sources cautioned that no deal is certain and requested anonymity because the matter is confidential.

Levine Leichtman declined to comment. Tropical Smoothie and Baird did not immediately respond to requests for comment.

Dealmaking in the U.S. restaurant sector is picking up as chains that survived the lockdowns of the COVID-19 pandemic and a surge in inflation bounce back amid an improvement in economic conditions.

Reuters reported last week that the investment firms that own Chuck E. Cheese are exploring a sale of the dining and entertainment company three years after it emerged from bankruptcy. In August, private equity firm Bain agreed to buy Fogo de Chão in a deal that people familiar with the matter said valued the Brazilian steakhouse chain at about $1.1 billion.

Levine Leichtman acquired Tropical Smoothie for an undisclosed sum in 2020, when it had over 870 cafes. Now, the company has more than 1,335 cafes in 44 states, primarily through franchises.

Tropical Smoothie launched in 1997 and serves smoothies it bills as healthy, as well as wraps and sandwiches, among other foods.

The Atlanta, Georgia-based company reported positive same-store sales in the third quarter of 2023 while it continued to expand the number of its franchises.

The company also considered an initial public offering last year, the sources said. It decided against it when the IPO market became hostile for restaurant companies, the sources added.