By Jamil Satchu, Senior Partner
Executive summary
Private equity has found a repeatable formula in multi-unit platforms: buy fragmented, founder-owned service businesses, professionalize them, and consolidate scale across 50 or more locations. The opportunity is structural rather than cyclical. Nearly half of US small businesses are owned by baby boomers now reaching retirement, creating a steady pipeline of acquisition targets, while sectors such as automotive services remain more than 90 percent fragmented by firm-to-establishment count. Across the ten consumer categories we track, the average exit multiple sits near 11x EV/EBITDA, and recent deals confirm the appetite: Blackstone acquired Jersey Mike’s from Peak Rock for roughly 8 billion dollars in January 2025. This brief explains where the value comes from and which sectors reward it.
Fragmentation is the raw material for consolidation
Multi-unit investing starts with markets too splintered to defend themselves. When thousands of independent operators each run a handful of locations, a well-capitalized platform can acquire and standardize them faster than any single owner can respond. Automotive maintenance illustrates the point, with fragmentation above 90 percent leaving abundant targets for programmatic buy-and-build. The demographic backdrop reinforces it. With close to half of US small businesses held by retiring boomers, sellers are motivated and supply is deep. We have mapped this opportunity across ten consumer service categories, from medical spas and family entertainment centers to dental, childcare, and fitness, each carrying its own model and growth profile. The common thread is that scale itself becomes a competitive advantage: procurement leverage, shared services, and brand systems that a fragmented field cannot match. That is what lets a platform compound value through add-ons rather than rely on a single growth bet.
Platform economics deliver returns from both ends
The financial engine runs on two tracks at once. Organic growth comes from lifting underperforming units toward system averages through operational playbooks and same-store gains. Inorganic growth comes from accretive add-ons bought at lower multiples and immediately improved. Dental platforms show the effect clearly, raising acquired-practice margins from 5 to 25 percent up past 30 percent after acquisition while capturing 10 to 15 percent cost savings through centralized purchasing. Recurring revenue makes those gains durable. Subscription and membership models convert one-time transactions into predictable cash flow, and Mister Car Wash reaches 40 percent location-level margins at mature sites through memberships, with 31 to 32 percent company-wide margins. Repeatable box economics let investors copy a proven format across geographies. European Wax Center reaches breakeven by month 14 on roughly 350,000 dollars of build cost and 1.1 million dollars of mature annual revenue, while Wingstop posts over 1.8 million dollars in average unit sales with sub-two-year paybacks.
Not every sector earns the same multiple
Attractiveness tracks the combination of fragmentation and projected growth, and the spread is wide. Medical spas, family entertainment centers, enrichment centers, and automotive services stand out, pairing high fragmentation with the strongest 2025 to 2030 growth outlooks. Medical spas grow near 10 percent annually on injectables and weight-management demand, though they depend on licensed injectors and varied state regulation. Express car washes grow 4 to 6 percent with membership mixes of 60 to 75 percent of wash sales. Family entertainment centers can clear 40 percent unit margins but carry cyclical, rent-heavy exposure. Recurring-revenue sectors command the premium multiples, while restaurants sit at the lower end despite proven franchise scalability, pressured by wage inflation and traffic volatility. The lesson for investors is to underwrite the unit model and its defensibility, not the headline growth rate.
Implications for investors
The best multi-unit returns come from disciplined operational focus, not financial engineering alone. Trivest nearly tripled Take 5 Oil Change’s store count and exited to Driven Brands at roughly 10x cash-on-cash by densifying markets and standardizing operations. RedBird scaled Main Event and sold it to Dave & Buster’s for 835 million dollars within two years. Before committing capital, test whether a concept meets an enduring job to be done rather than a passing trend, since staying power separates durable platforms from fads. Centralized systems, recurring revenue, and credible exit pathways are the variables worth diligencing first.
Contact us for the full report, which includes our complete ten-sector attractiveness map, exit-multiple benchmarks by sector, the deal database behind these examples, and our staying-power framework for screening fad risk.