On the desk today · Waste Connections
The big haulers fight over big cities. This one went where they wouldn't — and won the franchise nobody can break.
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The Hauler That Chose
The Towns Nobody Wanted
In September 1997, a former executive at Browning-Ferris Industries named Ron Mittelstaedt incorporated a company in Folsom, California, with a thesis that sounded like a mistake. While Waste Management and Allied Waste were consolidating the biggest cities in America — fighting over Houston, Chicago, Philadelphia — Mittelstaedt would go the other direction. He would target secondary markets. Small towns. Rural counties. The places where one hauler served the entire territory under an exclusive contract granted by the local government.
His investors thought he was leaving money on the table. He thought he was picking up the keys to a vault.
I grew up in a town like the ones Mittelstaedt targeted. One trash hauler. One truck route. Every house on the same schedule. If you asked who collected the trash, nobody knew the company's name — they just knew the truck came on Wednesday. You couldn't switch if you wanted to. There was no second option. The city had signed a franchise agreement with one company, and that was that.
That is the Waste Connections business model. Go where the competition isn't. Win the exclusive franchise. And once you have it, operate so well that the city never puts it out for re-bid.
Most people know Waste Management and Republic Services — the two largest waste haulers in North America. Waste Connections is the third-largest. But it operates differently. Where Republic and Waste Management compete in dense urban markets with multiple haulers fighting for commercial accounts, Waste Connections deliberately avoids those markets. It focuses on territories where the municipality grants one company the exclusive right to collect residential and commercial waste. No competition. No price wars. Just the franchise, the route, and the monthly bill.
Mittelstaedt had spent years at Browning-Ferris — one of the original waste industry giants — and understood the economics. In a competitive urban market, haulers underbid each other, margins get squeezed, and customer churn is constant. In an exclusive franchise market, the city selects one operator, sets the terms, and the hauler serves every address in the territory. The contract typically runs five to ten years with automatic renewal provisions. The margins are higher. The revenue is more predictable. And the only way a competitor can enter is to wait for the contract to expire and outbid the incumbent — which almost never happens if the incumbent performs well.
Waste Connections went public in May 1998 with roughly $30 million in annual revenue. In fiscal 2025, it reported $9.47 billion. Adjusted EBITDA reached $3.13 billion at a 33.0% margin — the highest in the industry, above both Waste Management and Republic Services. Net income was $1.08 billion. The company completed approximately $330 million in acquired annualized revenue during the year and returned a record $839 million to shareholders. Since its 1998 IPO, Waste Connections has delivered total shareholder returns of 7,911% — with positive returns in 21 of the last 22 years.
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That 33.0% EBITDA margin is the proof that the strategy works. Waste Connections earns more per dollar of revenue than either of its larger competitors — not because it operates more efficiently, though it does, but because it operates in markets where pricing pressure barely exists. In an exclusive franchise territory, Waste Connections raises rates annually as part of the contract — often tied to CPI or a fixed escalator. The city passes the increase through to residents. Residents pay it. There is no competitor offering a lower price. In fiscal 2025, the company delivered its fifth consecutive year of margin expansion, with EBITDA margins rising 250 basis points over that period.
The stickiness is contractual and governmental. An exclusive franchise agreement is not a commercial contract between a hauler and a business. It is a government-granted monopoly. The municipality selects the operator through a procurement process, signs a multi-year agreement, and enforces it across every address in the territory. Switching haulers requires the city to rebid the contract — a process that involves public hearings, proposals, and political risk. Incumbents with clean performance records almost always win the rebid. Waste Connections counts on this. Its employee retention improved 17% in 2025 — because the operational quality that keeps the franchise is built on the people who run the routes.
Mittelstaedt said it plainly in the fiscal 2025 fourth-quarter earnings release: "Adjusted EBITDA margin expansion of 110 basis points in the fourth quarter capped off a remarkable year for Waste Connections, driven by price-led organic growth in solid waste and strong execution from ongoing improvements in operating trends."
The flywheel runs on acquisition density. Waste Connections buys small local haulers in and around its existing franchise territories — $330 million in acquired annualized revenue in 2025 alone. Each acquisition adds routes that overlap with existing infrastructure. The trucks are already running nearby. The landfills are already permitted. The transfer stations are already built. Every new tuck-in acquisition raises the route density, lowers the cost per stop, and widens the margin. Waste Connections has compounded revenue at an 11.7% annual rate and adjusted EBITDA at 13.5% over the last five years — not from building new markets, but from deepening the ones it already owns.
WHY THIS WORKS
Exclusive franchises are government-granted monopolies. The city selects one hauler and enforces exclusivity across every address. No competitor can enter without winning a public rebid — which almost never goes to a challenger.
Secondary markets have no competition. Waste Management and Republic Services focus on large metros. Waste Connections goes where they don't — small towns, rural counties, and suburban territories that are too small to attract national attention but too profitable to ignore.
33% EBITDA margin — the highest in the industry. Exclusive territories eliminate price wars. Annual escalators raise rates automatically. The margin has expanded 250 basis points in five years.
7,911% total return since 1998. Positive shareholder returns in 21 of 22 years. Revenue compounded at 11.7% annually. The strategy that Wall Street questioned in 1998 — targeting markets nobody wanted — turned out to be the most durable in the industry.
Ron Mittelstaedt incorporated Waste Connections in September 1997. Eight months later, he took it public with roughly $30 million in annual revenue. Twenty-nine years later, the company does $9.5 billion. The thesis has not changed: go where the big haulers won't, win the exclusive franchise, operate it well enough that the city never rebids it, and use the cash flow to buy the next one. Mittelstaedt stepped aside as CEO in 2019 to address family health matters. He returned. As of the most recent earnings release, he is once again president and chief executive officer. The man who built the company on franchises nobody wanted is still running it — from the same playbook, in the same kinds of towns, with the same result. The truck comes on Wednesday. The bill comes on the first. And nobody in town has a second option.
