Tyler Gordon, Zach Gordon·July 31, 2025

Buying a $200m Franchisor (Not Units, the Whole System) | Tyler & Zach Gordon Interview

Tyler and Zach Gordon, brothers with Harvard/HBS educations and roughly a decade each in finance and private equity (Tyler at Apollo, Zach at Restaurant Brands International), left their careers in 2020 to search for a business to buy together. After an exhaustive two-year search process — including evaluating 150 industries and spending six months considering becoming franchisees themselves — they identified thrift retail as an overlooked, $50B fragmented industry with compelling unit economics and growing consumer tailwinds. They ultimately acquired 60% of Base Camp Franchising, the parent company of the Uptown Cheapskate and Kid to Kid resale franchise systems, with the founding Sloan family retaining 40% equity. At acquisition, the franchisor had ~200 stores, ~$12M in revenue, and $4-5M in EBITDA on roughly $200M in systemwide sales. The Gordons' strategy has been to invest first in franchisee support infrastructure — field operations, marketing, and proprietary pricing technology — before accelerating franchise development, growing the system to 270+ stores and targeting 1,000+ units of each concept long-term. The key operational insight is that thrift is a high-complexity, high-volume manufacturing-like business where operational systematization and data-driven pricing create a defensible moat, and their proprietary 'Baseline Vends' software is central to that advantage.

Deal facts

multiple: double-digit multiple (implied by host comment on 4-5M EBITDA)
sde ebitda: EBITDA $4-5M
revenue: $12M franchisor revenue; ~$200M systemwide sales
financing structure: 60% acquired by Gordons (self-funded with family capital + outside investors from their network); 40% equity roll by Sloan family
notes: Franchisor of two thrift resale franchise brands: Uptown Cheapskate and Kid to Kid. ~200 stores at acquisition, now 270+. Systemwide sales ~$200M at time of purchase. Franchisor revenue $12M, EBITDA $4-5M. Gordons acquired 60%; Sloan founding family retained 40% equity roll. Deal sourced through direct relationship built via franchisee-level conversations with the family.

Why this business

The Gordons pursued a long-term hold thesis and wanted to find a franchising opportunity in an overlooked, disorganized segment of the market. After screening 150 industries and concluding that obvious sectors were too competitive, they focused on the 'long tail' of franchising outside QSR, gyms, and home services. Thrift stood out as a $50B fragmented industry with compelling unit economics (unlevered payback under 5 years), growing consumer tailwinds around sustainability and secondhand, and an underpopulated competitive field. They were initially evaluating becoming franchisees themselves, but the relationship with the founding Sloan family evolved into acquiring the entire franchisor system, which aligned with their PE backgrounds and long-term compounding orientation.

What's working

Strong franchisee unit economics: Uptown Cheapskate averages ~$180K EBITDA on ~$500K investment (~36% unlevered yield); top-quartile stores exceed $350K SDE and top performers do $3M+ sales with ~$1M EBITDA
Recurring, contractually durable royalty revenue (5% of franchisee sales on 10-year contracts) with SaaS-like margin expansion as unit count scales
Proprietary technology platform ('Baseline Vends') that algorithmically prices secondhand items using millions of data points, creating an operational moat versus competitors
Growing tailwinds in secondhand/thrift: sustainability trend, secondhand becoming culturally cool especially among younger consumers, massive supply of used apparel in US households
Franchise development pipeline accelerating: 15x growth in broker lead flow in 6 months after beginning outreach; ~50%+ of new store development is internal (existing franchisees opening additional units)
High franchisee satisfaction: very few stores available for resale because franchisees prefer expanding rather than exiting; family franchisees passing stores to children or managers
Boutique store experience that removes the traditional stigma of thrift: clean, organized, well-merchandised environment attracting consumers who have never shopped secondhand before

What's hard

Significant operational complexity: stores process hundreds of thousands of individual items per year with highly subjective pricing decisions — managing this at scale requires intense systematization
Kid to Kid EBITDA lags Uptown Cheapskate ($90K vs $180K average), and closing that gap is a key operational priority
The franchisor has very little institutional profile after 30+ years as a family business — brokers and franchise consultants had never heard of the concepts, requiring substantial relationship-building investment
High intensity required of the owners: Tyler and Zach describe easily 100-hour work weeks; they have not yet been able to open their own stores due to demands on their attention at the franchisor level
Limited resale market for existing franchises — nearly all franchisees are in expansion mode rather than exit mode, making it difficult to attract acqui-hire type franchisees who want an existing base of cash flow
The franchisor spent its first two years focused entirely on franchisee support and infrastructure rather than franchise development (intentional, but required patience and investor alignment)

Notable quotes

If it was one word that we kept coming back to, it was fulfillment. Just fulfillment in our personal and professional lives.

The joys of compounding. If you can find the right opportunity and you can hold it for 10, 20 plus years, that can end up being a differentiated source of value creation.

In our mind, the most important indicator of success is how well your franchisees are doing. If your franchisees are doing extraordinarily well, the unit count will solve itself.

Who do we view as our biggest competitor for these items of clothing? It's not some other brick-and-mortar concept. It's not some platform on the internet. It's either the dark and dusty corner of somebody's closet, or the landfill.