Density Matters: Best Practices for PE-Backed Multi-Site Businesses

The strongest multi-site businesses compete on market density, not just location count

Private equity (PE) loves the multi-site model. There is a massive addressable market—over 800,000 franchise establishments and at least two million multi-site businesses in the US—and the sector tends to be predictable, scalable, and resilient to recession. Several billion-dollar and larger PE deals involving such organizations have taken place in the past eighteen months alone.

PE firms that invest in multi-site businesses can consolidate resources and purchasing power, conduct strategic roll-ups in fragmented markets, and ultimately command higher multiples on exit. But too often, investors equate value creation with simply adding more dots on the map.

The reality is harsher: growth without density destroys value.

This is part two of BRG’s Managing the Multi-Site Model series.