On this episode, Mike Esposito, Co-Founder and Co-Managing Partner at Franchise Equity Partners, unpacks why multi-unit franchise investing has stayed an underserved niche in private equity, and what it takes to underwrite these deals well.

Learn how box economics—margins, rent and store format—separate the franchise brands worth backing from the ones that aren't, and why new-unit development, not same-store sales growth, drives most of the returns. Then hear how bringing data science and marketing discipline into overlooked "pre-moneyball" industries like car washes and garage door repair unlocks value most operators are leaving on the table.

The information contained in this podcast is not intended to constitute, and should not be construed as, investment advice.

⏱️ Time Stamps
0:00 Intro
01:46 Mike Esposito and Franchise Equity Partners firm overview and verticals
03:04 PE competition in franchisee investing restaurants auto dealerships beer distribution
06:38 Brick and mortar cash flow investing vs tech valuations and AI disruption
08:50 Franchisee investment criteria brand AUV growth margins and partnership mentality
10:47 Box economics store level margins 15% threshold and EBITDA analysis
13:00 Brand momentum diligence and senior leadership relationships as a franchisee
15:42 Inline vs standalone store format AUV tradeoffs and high throughput models
18:14 Commodity risk supply chain disruption and new competitor entry in multi-unit retail
21:09 New unit development returns strategy vs same store sales growth forecasting
22:46 White space modeling data science AUV cannibalization and new store development
24:39 Real estate ownership vs leasing strategy ground up development in franchise investing
26:07 Quick serve innovation food LTOs robotics ghost kitchens and Wonder disruption risk
29:27 Franchise marketing responsibility brand-led vs franchisee-led digital strategies
31:17 Pre-Moneyball offline businesses data lakes ERP and digital value creation
35:41 Franchise Equity Partners contact Mike Esposito email and website

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