Matt Perelman & Alex Sloane - The Art of Franchise Investing - [Invest Like the Best, EP.392]

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.

This discussion is a masterclass in 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. GSP, along with many others, are profiled in our first issue 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-sale launches, go to joincolossus.com/print. 

Please enjoy this excellent and incredibly fun discussion with Matt Perelman and Alex Sloane. 

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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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.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. 

Editing and post-production work for this episode was provided by The Podcast Consultant (thepodcastconsultant.com).

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