A note before we start: I have been a fan of the Garnett Station story. While the firm’s origin story has been covered by WSJ and others, I was always curious about the next layer of detail. Today's article is an outside-in analysis of what drove Garnett Station’s first deal to be a success and what the next generation of dealmakers can learn from it.
One caveat: I have not interacted with Matt Perelman or Alex Sloane (though I'd love to). As a result, everything in this piece is based entirely on public disclosures. It's possible we've over- or under-emphasized certain aspects of the story. We don't pretend to have every answer, but we had a lot of fun researching it.
Before we dive into this week’s topic,
New Free Resource for Current and Aspiring CFOs!
Do you work in finance? Do you have investors? Are you a CFO (or aspire to become one someday)?
My friend CJ Gustafson (also former Providence Equity!) writes one of my favorite newsletters. It’s called Looking for Leverage.
CJ is a PE-backed tech CFO with multiple exits under his belt. He writes each week for over 75,000 PE and VC backed operators.
Topics include “the exit ready org”, “building your company’s first deal desk”, “how to write a great investor update” and “the characteristics of a great sales comp plan”.
This article was supported by RTC’s Research Analyst Mark Scavo.
State of Play
Many of us–especially in the younger generation of PE investors–are familiar with the surface-level story of Garnett Station (“GSP”). Two PE investors who acquired Burger King franchises while in business school and now running a $4 billion AUM firm.
But my question has always been: how the hell were they so successful with the Burger King acquisition?
With RTC, I shied away from investor-specific stories not to be partial to anyone. But curiosity got the better of me. In this article, we will go deeper into franchise investing as a PE playbook, why it works, what Garnett Station got right, and lessons from their successes and mistakes.
Let’s dive in.