Schwartz: Zero-based budgeting on a bad business just creates a slightly more profitable bad business
Daniel Schwartz · The Secretive PE Firm Behind Burger King, Tim Hortons, Skechers and Hunter Douglas (3G Capital) · Invest Like The Best · Feb 10, 2026 · at 1:15:34
Daniel Schwartz, co-managing partner of 3G Capital, discusses the limits of cost cutting and zero-based budgeting in private equity turnaround strategies.
0:00 / 0:08exact quote · 8.7s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“I wouldn't recommend one of your listeners buy a lousy business with a big zero-based budgeting overhead opportunity, because you're just going to have a slightly more profitable lousy business.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Daniel Schwartz
Schwartz: PE firms should buy one business and deploy top talent
“It's so hard to find great people. To be great CEOs. It's like, how are we gonna find 10? So I think it's great to be able to buy one business every once in a while and send in your A++ players to get involved.”
Schwartz: 3G routinely paid certain employees multiples of their peers' stock
“I did not allocate stock equally to people. I gave certain people multiples of what other people got based on our thoughts of people's existing and potential future contribution.”
Schwartz became Burger King CEO at 32; Kobza became CFO at 26
“Josh when he was 25, and when Alex promoted me to be CEO at 32, I think Josh became CFO at 26.”
Schwartz: Burger King memo projected 3x in five years, not platform M&A
“Well, I'd like to sit here and say the investment memo for Burger King said that it was going to be a platform company, and we were great visionaries... Well, there was a memo, it just didn't say that... No, it was after five years, this will be worth three ti…”
Schwartz: Retailers disintermediate CPG brands because they own customer relationships
“If you're a large retailer, be it a Walmart and Amazon or Costco. If you own the relationship with your customers, you have this ability to disintermediate the company selling to you.”
Schwartz: 3G Capital Sticks Exclusively to Simple, Long-Standing Moated Brands
“We've managed to stay pretty disciplined to stick to good, relatively easy to understand, well-moded businesses that we and our partners here could kind of wrap our heads around. Businesses that have ideally been around for a long time with strong brand franch…”