Matt Perelman & Alex Sloane - The Art of Franchise Investing - [Invest Like the Best, EP.393]
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How did Matt and Alex get their first Burger King franchise after being rejected by KFC?
I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk. Ridgeline offers a better way forward, one unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more, all at scale. Ridgeline is revolutionizing investment management, helping ambitious firms scale faster. Faster, operate smarter, and stay ahead of the curve. See what Ridgeline can unlock for your firm. Schedule a demo at ridgeline.ai. Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is InvestLike the Best.
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My guests today are Matt Perlman and Alex Sloan, co-founders and managing partners of Garnet 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, Mark Lazry 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're 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/slash 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. So now please enjoy the excellent and incredibly fun discussion with Matt Perlman and Alex Sloan. I can't wait for you to learn even more about them and their strategy soon. Stay tuned next month and for now go to joincolossus.com slash print. We have a chance to talk about a lot of history this time, which I don't normally do. And I'm especially curious to learn about your history because you started the firm so young and you went through this interesting phasing of how you grew your business, which I'm starting to notice amongst lots of the people that start their firms really young is they go through this early what I'll call like SPV phase, where they're just doing whatever it takes to get deals together, get capital together, have great deals.
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Chapters
8 chapters
1
How did Matt and Alex get their first Burger King franchise after being rejected by KFC?
0:00–15:34
2
What lessons did they learn from the early KFC rejection and the Burger King opportunity?
15:34–30:04
3
How did they build the initial Burger King empire and what were the key growth levers?
30:04–43:27
4
What challenges did they face during the COVID‑19 pandemic and how did they protect the portfolio?
43:27–58:11
5
What are the biggest risks in franchise roll‑ups and how do they mitigate them?
58:11–1:11:11
6
How do they source, evaluate, and price deals to achieve three‑times returns?
1:11:11–1:26:16
7
What role does culture, partnership, and LP alignment play in their long‑term success?
1:26:16–1:40:19
8
What advice would they give to someone wanting to start a new franchise concept?
1:40:19–1:40:29
Speakers
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