Alex Sloane & Matt Perelman

Co-Founders of Garnett Station Partners, specializing in a buy-and-build investment strategy in the U.S. core economy.

Claims

As speaker

Mentioned in

Key positions and views

A disciplined investment thesis is critical, focusing on businesses with at least 20% store-level margins, new units that pay back in three years or less, and number one average unit volume in their category.

The primary factors that cause roll-up strategies to fail are excessive leverage and a lack of proper integration, which must be actively managed.

Value creation in their model comes from multiple arbitrage: acquiring smaller bolt-on businesses at 5 to 8 times cash flow to build a consolidated platform that can trade at 12 to 15 times cash flow.

Technology implementation is a key lever for driving organic growth, targeting an increase of 200 to 300 basis points in portfolio companies.

Strong alignment with management is essential, achieved through mechanisms like founders rolling 20-50% of their equity and 'super options' that reward teams for exceeding high return multiples like 3x or 4x.

Podcast consensus on Perelman

Points of consensus

▶Alex Sloane and Matt Perelman's core strategy is a 'buy-and-build' or 'roll-up' model, focused on acquiring platform businesses in the U.S. core economy and scaling them through bolt-on acquisitions.Apr 2026

▶They emphasize hands-on operational improvements to drive value, such as implementing technology to increase margins and organic growth rates in their portfolio companies.Apr 2026

▶Their investment philosophy is guided by strict financial discipline, targeting a 3x return on investment (approximately 25% gross IRR) and specific criteria for acquisitions, including high store-level margins and quick payback periods.Apr 2026

▶A key market focus for their firm, Garnett Station Partners, is the acquisition of businesses from retiring baby boomers, a market they estimate at over a trillion dollars.Apr 2026

Points of debate

▶The immense success of their Burger King franchise, which was scaled to 1,100 units and sold for over a billion dollars, contrasts sharply with its extreme volatility as a public company, where its stock price collapsed to 98 cents due to COVID-19 and operational missteps.Apr 2026

▶While they successfully increased store-level margins in their Burger King business from 11% to over 15% through operational improvements, the business was later severely impacted by external macroeconomic factors like beef costs doubling due to inflation, causing the stock to fall again.Apr 2026

▶Perelman identifies excessive leverage and poor integration as the primary failure points for roll-up strategies, highlighting the inherent risks in their own core business model, despite their successes with platforms like Authentic Restaurant Brands.Apr 2026

▶Their strategy relies on multiple arbitrage (buying small at 5-8x cash flow, creating a platform valued at 12-15x), a model whose effectiveness can be debated depending on market conditions and the quality of post-acquisition integration.Apr 2026

Key themes

▶The Buy-and-Build PlaybookApr 2026

Sloane and Perelman's primary strategy involves acquiring an initial platform business and aggressively scaling it through subsequent 'bolt-on' acquisitions. This was exemplified by their Burger King investment, which grew from 23 units to 1,100, and is being replicated in sectors like auto services.

This strategy allows them to capitalize on multiple arbitrage—buying smaller, less expensive businesses and consolidating them into a larger entity that commands a higher valuation multiple, creating significant value beyond just operational improvements.

▶Operational Value Creation via TechnologyApr 2026

Beyond financial engineering, the partners focus on tangible operational improvements to drive profitability. They cite implementing food cost software to boost Burger King margins from 11% to over 15% and aim to use technology to increase portfolio company organic growth by 200-300 basis points.

Their emphasis on operational intervention suggests a hands-on private equity model that is less reliant on leverage and more focused on fundamental business improvement, which can be a key differentiator in crowded markets.

▶Navigating Extreme Market VolatilityApr 2026

The public market journey of their Burger King business illustrates a story of dramatic highs and lows. After merging into a public company, the stock plummeted due to the pandemic and operational errors, recovered under new leadership, and then fell again due to inflation, before the ultimate billion-dollar sale.

This narrative underscores the vulnerability of even scaled, well-managed businesses to macroeconomic shocks and highlights the resilience and crisis management skills required to navigate such periods.

▶Disciplined and Niche Investment CriteriaApr 2026

Garnett Station Partners adheres to a strict set of investment criteria, targeting multi-unit businesses with at least 20% store-level margins, new unit payback in three years or less, and top average unit volumes. They deliberately avoid overheated sectors where bolt-on acquisitions trade at high multiples, preferring those in the 5-8x cash flow range.

This disciplined approach serves as a risk mitigation strategy, ensuring they enter investments with strong unit economics and a clear path to value creation, rather than overpaying for growth in trendy sectors.

Source episodes

Timeline

Pre-2019

Alex Sloane and Matt Perelman acquire a 23-unit Burger King franchise in North Carolina and begin a 'buy-and-build' strategy. They implement operational improvements, such as food cost software, to increase store-level margins from 11% to 15-16%.

May 2019

Their expanded 220-unit Burger King and Popeyes business is merged into a larger public company at a share price of $8.35.

Early 2020

Approximately eight months after the public market debut, the company's stock price collapses to 98 cents per share, a decline attributed to the COVID-19 pandemic and internal operational missteps.

2022 - Mid 2024

Under the leadership of CEO Deborah Derby, the public Burger King business undergoes a significant turnaround, with annual earnings growing from a low of $60 million to $150 million. However, the business also faces new headwinds as inflation causes beef costs to double, pushing the stock back down to $1 per share at one point.

Circa 2022

Sloane and Perelman's scaled Burger King enterprise, now comprising 1,100 locations, is sold back to the franchisor for over a billion dollars.

Suggested prompts

How does Garnett Station Partners' approach to post-acquisition integration mitigate the key roll-up failure risks of excessive leverage and lack of synergy that Perelman identified? &nearr;To what extent is the success of the Burger King franchise consolidation replicable in their other target sectors like auto services, which may have different competitive dynamics? &nearr;What specific technologies, beyond cost-control software, does Garnett Station Partners deploy to achieve its targeted 200-300 basis points of organic growth in portfolio companies? &nearr;How do Sloane and Perelman balance the rapid pace required for a bolt-on acquisition strategy with the deep, hands-on operational involvement needed to improve core business metrics? &nearr;

Key concepts

Buy-and-Build Strategy 22 ep Franchise Operations 9 ep Investment Criteria 6 ep Operational Improvement 5 ep Market Volatility 4 ep Private Equity 22 ep Valuation Multiples 3 ep Food & Beverage Sector 10 ep Management Incentives 2 ep Automotive Services 1 ep

Notable quotes

“We ultimately got to 1100 franchises We were the biggest in the country, took the company public and sold it about two years ago now for over a billion dollars back to the franchisor.”

Alex Sloane · Alex Sloane & Matt Perelman – Buy-and-Build Playbook in the Core Economy at GSP (EP.499)

“Eight months later, the stock's at 98 cents because of COVID and a bunch of missteps we had made.”

Matt Perelman · Alex Sloane & Matt Perelman – Buy-and-Build Playbook in the Core Economy at GSP (EP.499)

“Business has to have at least 20% store level margins. Business has to have new units that pay back in three years or less and has to have the number one average unit volume or sales per box in its category or micro category.”

Matt Perelman · Alex Sloane & Matt Perelman – Buy-and-Build Playbook in the Core Economy at GSP (EP.499)

“Our goal that we're striving towards every day is to give them $3 back within a reasonable time period. That's a 25% or so gross IRR.”

Matt Perelman · Alex Sloane & Matt Perelman – Buy-and-Build Playbook in the Core Economy at GSP (EP.499)

Report last updated: Apr 28, 2026

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