Invest Like The Best
Episode 393 The Art of Franchise Investing
Invest Like The Best

Episode 393: The Art of Franchise Investing

Invest Like The Best

Episode 393

The Art of Franchise Investing

Matt Perelman and Alex Sloane are the Co-founders and Managing Partners of Garnett Station Partners. We cover the story behind GSP's early days and first successful deal, what they've learned about brand building and innovation in the franchise world, and why building strong relationships is the key to any successful partnership.

This episode is brought to you by:

Ramp. Ramp's mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Ramp is the fastest growing FinTech company in history and it’s backed by more of my favorite past guests (at least 16 of them!) than probably any other company I’m aware of. It’s also notable that many best-in-class businesses use Ramp—companies like Airbnb, Anduril, and Shopify, as well as investors like Sequoia Capital and Vista Equity. They use Ramp to manage their spending, automate tedious financial processes, and reinvest saved dollars and hours into growth. At Colossus and Positive Sum, we use Ramp for exactly the same reason. Go to Ramp.com/invest to sign up for free and get a $250 welcome bonus.

AlphaSense: AlphaSense has completely transformed the research process with cutting-edge AI technology and a vast collection of top-tier, reliable business content. Imagine completing your research five to ten times faster with search that delivers the most relevant results, helping you make high-conviction decisions with confidence. AlphaSense provides access to over 300 million premium documents, including company filings, earnings reports, press releases, and more from public and private companies. Invest Like the Best listeners can get a free trial now at Alpha-Sense.com/Invest and experience firsthand how AlphaSense and Tegas help you make smarter decisions faster.

Show Notes:

(00:00:00) Welcome to Invest Like the Best

(00:07:02) The KFC Rejection and Burger King Opportunity

(00:08:36) Living with Ray Meeks and Business Growth

(00:12:08) Understanding Franchise Economics

(00:16:12) Challenges and Lessons Learned

(00:38:37) Navigating COVID-19

(00:54:37) Challenges of Rollups and Integration

(00:56:01) The Importance of Culture in Business Consolidations

(00:58:01) Strategies for Successful Exits

(01:01:49) The Fun and Challenges of Partnership

(01:09:53) Innovation in Business Operations

(01:13:44) Real Estate and Financial Engineering

(01:16:34) Managing Labor and Turnover

(01:19:36) Investment Themes and Criteria

(01:23:36) Selling to Larger Private Equity Firms

(01:27:11) Maintaining Culture and Sourcing Deals

(01:33:41) The Importance of Cycles and Capital Structure

(01:37:18) Partnership Dynamics and LP Relationships

(01:40:26) The Kindest Thing Anyone Has Ever Done For Matt & Alex

The Art of Franchise Investing

Introduction

Patrick
My guests today are Matt Perelman and Alex Sloane, co-founders and managing partners of Garnett Station Partners. GSP invests in the trillion-dollar franchise and consumer services industries. Matt and Alex started the firm in 2014 as MBA students when they bought 23 Burger King restaurants. Since then, they've invested in 26 other multi-unit businesses, from gyms to car washes to funeral homes. GSP is now a leader in its field. In our conversation earlier this year, Marc Lasry dubbed Matt and Alex the next generation of great private equity investors. You'll soon hear why. This discussion is a masterclass on franchise investing. We explore GSP's playbook for creating value, the power of Matt and Alex's partnership, and their approach to scaling businesses for successful exits.

This conversation is special for another reason. For the last year, we've been working on a print publication that will share the very best of what we've encountered and learned every quarter. As the world goes bite-sized, short-form, and full of platitudes, we are drawn to harder searching, more detailed exploration and understanding, and more emphasis on the very best people we can find, who are doing unique things in both business and investing. GSP is one such firm, and along with many others, they are profiled in our first issue of an upcoming print publication to be revealed next month. We are going to print a limited edition of them to start, so if you are interested in hearing first when pre-orders go on sale, go to joincolossus.com/print. I really couldn't be more excited to share with you what we've been working on, including an in-depth profile of one of the great investors of the last 20 years, who is a cult figure in investing circles but has never been profiled or interviewed like this.

Access the full transcript
Sign in or register to view episode transcripts.

Contact

Get in touch at help@joincolossus.com