Discovering Hidden Gems The Surprising Benefits of Non Food Franchises with Jon Ostenson
Are you considering franchising as a path to business ownership but feeling overwhelmed by the options? In this eye-opening episode, I sit down with Jon Ostenson, a top 1% national franchise broker and expert in non-food franchising, to explore the exciting world of franchise opportunities beyond the typical fast-food chains.
Jon shares his journey from corporate executive to franchise industry leader, offering valuable insights on how to navigate the complex landscape of franchising. We discuss the benefits and challenges of franchise ownership, debunk common misconceptions, and explore why non-food franchises often present more attractive opportunities for aspiring entrepreneurs.
Key Takeaways:
- The advantages of franchising over starting a business from scratch
- Why non-food franchises can offer better returns and lifestyle benefits
- How to evaluate franchise opportunities and perform due diligence
- The importance of aligning your skills and goals with the right franchise model
Exploring Non-Food Franchise Opportunities
Jon highlights several thriving non-food franchise sectors, including:
- Home services and property maintenance
- Health and wellness
- Senior care and aging-in-place solutions
- Children’s activities and education
Learn why these industries are experiencing growth and how they can provide stable, recession-resistant business opportunities.
Financing Your Franchise Dream
We delve into the financial aspects of franchise ownership, discussing:
- Typical investment ranges for different types of franchises
- Financing options and SBA loans
- The importance of working capital and realistic financial planning
This conversation is packed with actionable advice for anyone considering franchise ownership or looking to diversify their investment portfolio. Whether you’re a corporate executive seeking a career change or an entrepreneur looking for your next venture, you’ll find valuable insights to help you navigate the world of franchising.
Don’t miss this opportunity to learn from Jon’s wealth of experience and gain a fresh perspective on the possibilities of franchise ownership. Tune in now and start giving a heck about your entrepreneurial future!
Connect with John Ostenson:
Website: https://franbridgeconsulting.com/
Facebook: https://www.facebook.com/JonOstenson1/
LinkedIn: https://www.linkedin.com/in/jonostenson/
Connect with Dwight Heck:
Website: https://giveaheck.com (Free Book Offer)
Instagram: https://www.instagram.com/give.a.heck
Facebook: https://www.facebook.com/dwight.heck
Facebook Group: https://www.facebook.com/groups/Giveaheck
YouTube: https://www.youtube.com/@giveaheck
LinkedIn:https://www.linkedin.com/in/dwight-raymond-heck-65a90150/
TikTok:https://www.tiktok.com/@giveaheck
X: https://x.com/give_a_heck
Chapter Summary (full unedited transcript follows)
00:00:00
Introduction to Jon Ostenson: Franchise Expert and Author
Jon Ostenson, a top franchise broker and author, is introduced. His background in franchising, including roles as president of an Inc. 500 franchise system and CEO of FanBridge Consulting, is highlighted. The conversation sets the stage for discussing franchising and business ownership opportunities.
00:01:16
Navigating the Franchise World: Challenges and Opportunities
Jon discusses the complexities of franchising, emphasizing the importance of aligning with strong franchisors. He highlights how franchising can provide a better path to business ownership for many, offering support and a community of fellow franchisees to learn from and share best practices.
00:05:21
Jon Ostenson’s Origin Story: Family, Values, and Career Path
Jon shares his upbringing in Atlanta, his father’s influence as an estate planning attorney, and early financial lessons. He discusses his corporate career, including international experience, and his transition to franchising, highlighting the impact of his background on his current work.
00:11:57
Personality Traits and Success in Franchising
Jon explores how personality traits impact franchise success. He discusses the differences between highly entrepreneurial individuals and those who thrive in structured franchise environments. The conversation highlights the importance of humility, trust in the franchise system, and willingness to follow proven processes.
00:16:38
Non-Food Franchising: Advantages and Opportunities
Jon explains his focus on non-food franchising, highlighting the diverse opportunities beyond fast food. He discusses the advantages of non-food franchises, including lower capital requirements, fewer employees, and less susceptibility to consumer whims. Jon emphasizes the stability of industries serving essential needs.
00:20:12
Franchise Ownership Models: Hands-On vs. Semi-Absentee
Jon discusses different franchise ownership models, from hands-on operators to semi-absentee owners. He emphasizes the importance of having a strong manager and franchisor support for semi-absentee models. The conversation highlights the flexibility franchising offers for different lifestyle preferences and goals.
00:25:06
Franchising vs. Independent Business Expansion
Jon compares franchising to independent business expansion, highlighting the benefits of franchising such as faster scaling, incentivized local owners, and attractiveness to private equity. He discusses how franchising can provide a better work-life balance and potentially higher business valuation for founders.
00:34:28
Franchise Investment and Support: What to Expect
Jon details his personal experience opening a franchise, explaining the support provided by franchisors in site selection, build-out, and marketing. He discusses typical investment ranges for franchises and the ongoing support franchisees receive. The conversation provides insights into the franchise startup process and costs.
00:42:56
Jon’s Book on Non-Food Franchising
Jon discusses his book on non-food franchising, describing it as a concise, informative guide for potential franchisees. He explains the writing process and the book’s purpose in educating readers about franchising opportunities. Jon offers free downloadable copies and mentions that profits from Amazon sales go to charity.
00:46:32
Closing Thoughts: Taking Action on Business Ownership
Jon emphasizes the importance of taking action and exploring business ownership opportunities. He encourages listeners to overcome excuses and start the exploration process, noting that there’s never a perfect time to make a big change. The conversation concludes with a call to action for interested listeners.
Full Unedited Transcript
[00:00:00 – 00:01:12]
Good day and welcome to Give a Heck. On today’s show I welcome Jon Ostenson. Jon is a top 1% national franchise broker, investor, author and international speaker specializing in the area he is coined as non food franchising. Has served as the president of Inc. 500 franchise system and now as a multi brand franchisee himself. Jon is uniquely positioned to educate others on franchising and franchise selection. Jon serves as the CEO of Fanbridge Consulting and has helped thousands of entrepreneurs and investors explore business ownership and investment opportunities. Jon is the author of the book on non food franchising and is a frequent contributor and thought leader for publications on the topic of franchising and franchise investments. Prior to Fran Bridge, Jon was the president of Shelf Genie, a national franchise system with 200 plus locations. I’d like to welcome you to the show Jon. Thanks so much for agreeing to come on and share with us some of your life journey.
[00:01:13 – 00:01:15]
Excited to be here Dwight, Looking forward to it.
[00:01:16 – 00:01:37]
Yeah, me too. I’ve always been fascinated with franchises and I’ve been around them pretty much my whole life from even in my own financial planning practice dealing with clients that want to get into franchises, that have got into franchises, have gone out of franchising and people are so confused about franchising. Wouldn’t you agree?
[00:01:37 – 00:02:05]
Yeah, you know, like so many industries, I mean We’ve got 3,500 franchise companies in North America and you know, they’re good players and they’re ones you wouldn’t want to align with and I think every industry is that way. Right. And so no, I think franchising, when done right can provides such a better path to business ownership for so many out there. And you know, that’s where I love stepping in and helping people understand, you know, what I’ve come to learn over the years around how to navigate the franchise world and how to make it work for you.
[00:02:05 – 00:02:52]
Yeah, it’s, it really comes down to knowledge, it comes down to information, but it also involves the fact of an individual and those that are surrounding them for them to interpret the information to see the value in it. Lack of experience, lack of knowledge, ignorance is pretty much the reason why I’ve seen a lot of businesses fail. Small businesses that have, you know, brick and mortar to people trying to get into franchising, even to good franchise operations, they just don’t have the intellect. And it’s not that they can’t learn it, they just choose not to or their environment has made it so that they can’t learn it. And it may sound harsh but I’ve seen it time and time again. What has been your experience in regards to people’s thought processes and getting into franchising?
[00:02:53 – 00:04:01]
Yeah, you know, so many reach out to me. I’ve got a background. I spent many years in the corporate world. And so many of our clients, you know, have also, you know, worked for others for most of their life and have that desire to step into business ownership. But oftentimes they don’t know how to connect the dots. They don’t know what industry or what their strengths are necessarily from a business ownership standpoint. They’ve always lived in the silos of a large corporation. And you know what I find? Business ownership’s not right for everyone, but for so many, they’re sitting on the sidelines, it can be right for them. And, you know, they’ve got that inner entrepreneur that they want to let loose. And again, what. Where we step in is helping them understand franchising can be a path to do that by aligning with a strong franchisor on the sideline that is supporting you. So you’re in business for yourself, but not by yourself, to be a little cliche on you. And we love the idea of, you know, it’s been my experience too, as a franchisee. You know, you’ve got a community of others that are living the same thing day in, day out as you, running the same business in their local markets. And so again, you’re. You’ve got a community where you’re exchanging best practices and learning from others, sometimes learning from their mistakes, so that you can try to shortcut success for yourself.
[00:04:01 – 00:05:21]
Yeah, it’s a lot of. In a traditional brick and mortar situation, the guy that’s up the street from you, they’re both mechanics. You aren’t supporting one another. You’re not, you’re not going to give each other information, you know, in most circumstances because you’re afraid you’re going to steal each other’s client. And when in reality, one service is more specialized in, let’s say a GM and another person specializes in bubble. Right. Completely different beasts and how they’re structured. Yes, there’s consistencies and similarities, but there’s. There’s differences. So I like the idea of the franchise model, but what I want to do before we get too far into discussing franchises, is and understand some more about your origin story. I find it’s very important for the people that listen to my show over the last four years, they really connect with the guests better when they know a little bit about your origin, not necessarily from the time you hit high school on. But really, what was your childhood like? Did you have siblings? Was it a struggle? Did you have any epiphanies when you were growing up that directed you and led you throughout your life where you’ve had those aha moments. Wow, that was from my childhood. Could you please share anything you feel comfortable with about your origin, Please?
[00:05:21 – 00:07:37]
Yeah. You know, grew up in Atlanta, Georgia. Was blessed to have a great family. Two parents that, you know, led us. Well, I was the oldest of four kids. My father was an estate planning attorney. I always joked, my father’s going to have a big old mansion in heaven one day because he did so much pro bono work for so many widows and others in the community. And just a great man. But, you know, he was never a marketing guy. He wasn’t a sales and marketing guy, and he never built that practice. And, you know, it’s expensive to raise four kids. And so the conversations in our household around money were the types of conversations that I kind of made a pack to myself early on. I’m going to have different money conversations with my family down the line because they’re always trying to scrimp and save. I wanted to, you know, in my young mind, you know, one day be in a position where we’re talking more about investing and being able to give back and, you know, just healthier conversations that provided for less stress. And so I’d say that’s. That was it. Driver of mine from young, from my childhood. And it’s been neat now and to be able to bless my parents by, you know, helping them some ways financially. You know, my other siblings have come alongside them as well. So a great legacy was left. But, you know, there are things that I took from that that I want to replicate and things I don’t want to replicate. So, yeah, fast forwarding, you know, got very involved throughout college and in different leadership aspects, you know, at a large university. University of Georgia. Stepped out and, you know, worked for several very large public companies. Had the opportunity to work in India for six months very early in my career, which, you know, helped help me just develop a larger perspective. You know, work for Carter’s Oshkosh B Gosh, which is a large public company for the president of that company. So really got to see how executive teams worked. And so I’ve been very blessed to have had different experiences, but just kind of fast forward, you know, like so many of your listeners, I spent many years in the corporate world working to build someone else’s empire. And I had that Desire to build my own. And so it was about eight years ago, mid-30s, where I stepped out and stepped into a private company, had the opportunity to serve as president of Shelf Genie franchise system and support owners all across the US and Canada, and really fell in love with the franchise model which kind of fast forward, you know, I can get into more detail, but brings us to where we are today.
[00:07:37 – 00:09:58]
Well, that’s fantastic. Dialing it back to the beginning of your origin and our parents introducing us or not introducing us to certain things in life. As you mentioned, you wanted to have the more open conversation about investing in just life with your own family. I seen that myself. My dad was a hard worker. A lot of our, you know, earlier generations showed people how to work hard, but they didn’t necessarily share the details about where they were financially, where they were even just being vulnerable emotionally and stuff. And they teach us to be protective. And then we go on to the next generation, we do the same thing. We act that way within our work structures, our personal school structures and the way we communicate with people or more sheltered. So I find that the younger generations, even your generation, are more vulnerable and open to, you know, sharing whatever detail and just discussing it and not making it a tense situation. Oh, we can’t afford to do this right now. I’m sorry. We have these financial concerns or you know, you know, again, always age appropriate conversations for those listening or watching. You’re not going to dump all over your kids. That’s not what I’m saying. I’m saying the more open and honest you are to your children as you grow up, the better, better off you are. Right. It’s not just hard work ethic. You need to teach your kids like, you know, keep your nose clean, go work hard, you know, bum up, nose down to the grindstone. You have to actually teach your children how to communicate and that starts by you communicating with them. So I appreciate you talking about that and about how to fact you’re supporting your own family like your parents and your other siblings are stepping up to the plate. And that’s honorable. Right. We weren’t put on this planet to be born alone or die alone. Right. Or to suffer and not have the necessities in life. I’m not saying extraordinary stuff for our loved ones, but enough so that they’re comfortable because they give us life, they give us the knowledge we have that allowed us to springboard past them or at least stay at a level of them. Maybe they’re somebody that really you admire for what their work. I think it sounds like you admired your dad a lot though, regardless of whether or not he was a marketing genius.
[00:09:59 – 00:10:09]
Yeah, no, it’s the qualities like the integrity and his, you know, how well people respected him and his reputation, you know, things that you choose to take and try to apply, you know, to your own life for sure.
[00:10:09 – 00:11:57]
So, yeah, I love that. That’s, that’s fantastic. I know my dad, like I mentioned before we hit record, grew up in a small community. My dad still today, he’s in his 80s, alive, and we’ll be in the local community of 20, 000 people and people will stop him on the street and he still remembers people’s names and because he was a very successful business owner in the farm community, in the farm implementation dealership. But he was very integral in the community and people this many years later, even younger people in their 20s will come up. Oh, you remember coming. See you where we seen you at wherever with our, our parents and you were so nice and good to see you Ray. And you know what I mean, that’s, that’s life, that’s connection, that’s community. So that’s fantastic. I appreciate you sharing that. So, Jon, so many people in my life, whether franchising is good or bad, as I mentioned earlier, I’ve had so many people involved. Right. Everybody’s got an opinion, whether that’s an educated opinion or not. You know, it’s hard to say. Sometimes they say they’re educated, but really they’re not. I have come to the conclusion, as I mentioned earlier, that really it involves lack of knowledge and sometimes it’s lack of ability to have that knowledge. As you mentioned, some people just start designed to have, have a business. And I find a lot of it has to do with personality. It can be how they grew up, their origin story, or they’re just not willing to put in the effort. They want the result, but they’re not willing to put in the effort. And a lot of them, if I look at their current careers or jobs, you can see the patterns of how they’re going to struggle to be a business owner, whether it’s franchisee or traditional brick and mortar. Do you find that there’s a correlation at all between somebody’s personality and ability to run a business?
[00:11:57 – 00:14:43]
I absolutely do. And I think a good analogy there, it would be one constituency that we serve our existing business owners. They come to us, they’re ready for their next rodeo and they’re thinking, do I start another business myself or do I start a franchise? And oftentimes they like the idea of a franchise. But once we start talking and their personality comes out, I see where they’re coming from. Many of them, I have to say, you’re too entrepreneurial. These are folks that think they’re the smartest guy in the room no matter what room they’re in. And they’re going to have opinions on how everything should be done. But it’s interesting, intern Dwight, that quite a few of them say, hey, I remember all the work that went into starting a business from scratch. And you know, I love the idea now that, you know, to be cliche, I can start on third base. You know, a lot of things have already been proven out and, you know, I’m not in business all by myself, but I’ve got a franchise on the sidelines supporting me. I’ve got a community of other franchisees living the same thing. You know, systems are in place and, you know, tech stacks and, you know, vendors. And they love the idea of being able to step into that. And so what I found is it’s two very different personalities, just to use kind of that analogy there, you know, and there are others that, yeah, you know, I think fear drives them. And, you know, we all have some fear, right. And, you know, oftentimes you do see that, you know, people don’t want to start a company on their own. They like the idea of franchising because some fears holding them from starting a company on their own. You know, I think in some cases maybe there’s too much fear. They’re not going to be willing to spend on marketing. They’re not going to be able to willing to step out there and take risk even in the franchise environment. Whereas others say, hey, I’m going to trust the franchisor. I’m going to humble myself and step into a proven process where it’s worked in this market and this market and this market and this market. And I’m going to trust that if I follow checklist in the process and take their coaching, that I’m going to have that same degree of success. So you really do see a lot of personality traits come out. You know, I think about it’s just like other asset classes. You know, crypto. You know, you had early adopters on crypto and you had those that stayed on the sideline. And obviously those that adopted it, whether or not they had the knowledge, they’ve made out pretty well over time, if they’ve held onto it. But you probably had some that jumped in and then jumped out. And so I think it’s really fascinating. You probably saw that with your financial background, too, even the stock market, you’re kind of rolling the dice a little bit. A lot of good people that we work with, like the idea of franchising and that in business ownership, because they do have some say in the outcome ultimately, you know, if they work hard or if they make intelligent decisions or, you know, if they hire the right people again, it’s. It’s not passive. There’s going to be some degree of involvement even if you put a manager in place. And so kind of circling back to your question, you do see a lot of personality traits impacting whether they move forward with the franchise as well as their degree of success once they’re in business.
[00:14:44 – 00:16:37]
Yeah, it’s. When you were talking about that, one of the things that popped into my mind is the founder and Ray Kroc and him setting up, like, whether or not people understand movies are movies, they’re theatrical for a reason. It’s entertainment. There’s a lot of truth to it, to that movie. I’ve read many books about Ray Kroc, and he, you know, he had to struggle. It directly relates to what we’re talking about with franchisees. He had franchisees that were opening up but introducing other things that weren’t consistent with the model of what he was, what he was trying to achieve. And they were. They knew it all. They were the smartest person in the room. They. Or they were a mom and pop that, you know, mortgaged their house to get into the franchise. Franchise to begin with, didn’t have a clue, but still thought it was cool to sell chocolate chip cookies or whatever. Whatever example he wants. For those that are watching or listening, if you want a good, good indication of what Jon and I are communicating about. I don’t know what Jon thinks of. I’ve seen the movie many times. I don’t know. There’s just something about it. I tend to watch the Founder. I think I’ve watched it eight times. I actually bought it when it came out. And there’s just things that I learned about it. Just the mindset, whether or not the writers did a good job. In my opinion, they’re fairly accurate. As to the. Look at the McDonald brothers. They weren’t willing to step out and grow. They were stuck in a rut. They weren’t into marketing, you know what I mean? And he just had a visionary like Ray Kroc. Whether you like him or not, it was pretty amazing. So I appreciate you sharing that. So when you have people that are into Franchising there’s obviously the non food and then there’s the food. Why is there. Why is there a difference? And why is non food, in your opinion, a clear winner when it comes to franchising?
[00:16:38 – 00:18:34]
Yeah, you know, certainly some people can do very well with food. And I support the food guys. We need them. I’ve got nothing against them. Um, but a couple of thoughts. So first, when I, when I say the F word franchise, you know, most people think fast food, right? They automatically go to QSR fast food. And so I like the idea of being contrarian and saying, hey, what about that other half of the market that are all these other opportunities, opportunities that are never top of mind for people because they think fast food, they think hotels, they think oil changes, you know, in some cases, but it’s like there’s all these other opportunities. So. And part of it was to be contrarian. But, no, it’s my humble belief, based on what I’ve seen, based on my background and my clients, that there’s simply easier ways to make money. Again, you can do very well with a large food, you know, McDonald’s or what have you, but there’s so many food opportunities out there that I don’t believe in. And in most of those cases, you’re investing large amounts of capital. You know, with a lot of employees, long operating hours. Oftentimes your margins are fairly low. And you’re also susceptible to consumer whims. You know, I think about frozen yogurt froyo was big until it wasn’t, right? And so I think consumer whims and tastes change more in food than they do in other industries. Oftentimes, you know, people will always spend on their kids, they’ll spend on their pets, they’ll spend on, you know, their aging parents, they’ll spend on their health to some degrees, they’ll spend on their homes. And so categories of business that support some of these other areas that, you know, in some cases are more needs based, in some cases more discretionary, but categories that are understandable that aren’t going to go out of style. Again, within food, there’s just this large world of, you know, good opportunities, but then also opportunities that you’d be putting a lot of money in and kind of rolling the dice a little too much. So that’s. That’s how I think about it. And most of our clients, I’d say probably 95% of them, like the idea of these other industries that we focus on more so than the food space.
[00:18:34 – 00:20:12]
Yeah, I, I know quite a few People that have food franchises like Subway for an example. I have a close first cousin that owns a couple of them and the amount of hours that they work. And I’ve sat down with people that have reached out to me that are clients. Sometimes people that have just heard that they can sit down and have a, you know, I don’t charge for them. Just have a conversation and figure out the facts of their life. What direction are they? Some people are designed to be worker bees, some people are designed to be the queen. And it’s just, it’s the reality of life. It’s not meant to be harsh. And they’ll go to. And I look at what he used to do in the energy and oil industry and what he made and what he accomplishes now from one location, a subway to the second location, I think he’s open a third now. And the amount of hours he works and going back and forth. And again, it’s not that the franchise is bad, but if you want to make more money, you don’t hire that manager, you don’t hire that extra staff. Guess who’s the manager and extra staff. Guess who’s doing paperwork at home after the store is closed. Guess who’s stressed out with somebody sick. And again, it’s not negative about normal business or any franchise, but a lot of people, when I tell them this stuff, they just, it’s like a light bulb sometimes goes on, not all the time. They just don’t understand that they’re buying themselves a job initially. Wouldn’t you agree that it takes time even for a brand new franchisee with a, with a proven book. They open up and there’s all the rules and this, they’re still stepping into unknown territory. Wouldn’t you agree?
[00:20:12 – 00:21:55]
Yeah, I’d say in probably a little more than half of the cases our clients will step in and run the business, you know, so it would feel like a job early on, usually with the goal of replacing themselves over time. The other half put a manager in place day one. Now, in franchising, that’s very common. Semi absentee, semi passive executive model, I prefer to call it semi involved because even if you do that, you’re still going to be involved, Right. This isn’t a passive investment. If it was easy, everybody would be a business owner, right? But you know, with franchising, if you have a strong franchisor on the sideline, it does make that model doable in that they can carry the support water for that manager on a day to day basis. They could be the go to for questions. So it doesn’t all come to you. End of the day you’re still going to be involved, you’re still going to be coaching the person, right? But it can take some of that off your plate and make it doable. Now what is that contingent on? It’s contingent on one, having a good franchise shows around the sideline and two, as important as having a good manager in place. And you know, if you don’t have a good manager that’s incentivized, that’s a go getter and it’s not the right fit. You’re going to have some headaches, you have to lean in, you’re going to put in the time like you were just saying. However, I’ve got so many client case studies of where they found the right manager, they incentivize them. Oftentimes it’s a young guy that’s hungry, that’s, you know, gotten some experience before this, but he’s ready to get out there. You give him a title, you give them a strong incentive plan and he runs a business better than you would. So it can be done. But it just comes down, just like business 101, it comes down to the people. You’ve got to have a good operator day to day. You’ve got to have a good support system on the sideline. And you, if you have two of those things, they can’t take the burden off of you. But you’ll still be involved somewhat.
[00:21:55 – 00:25:05]
Oh yeah, there has to be. I keep on seeing the word in my mind’s eye. Communication. Communication’s key because I guess the numbers would be hard. So you have 50% that make it right away with a manager and 50% that dive into it themselves. It’s just like any interview. It’s understanding, asking the right questions of them, them asking good questions back. And then it’s still a crapshoot because unless you’re. Because if you’re hiring the young person like you talk about that’s hungry, they don’t really have a long resume. They don’t have a lot that you can tap into to see or to analyze their circumstances. So you take a shot. But yeah, I’ve always wondered how many people actually jumped into it right away with a manager. Anybody I know that’s gotten into franchises, quit their job and they’re in there down and dirty, 80 hours, 100 hours a week just to protect their investment. And they’re hungry, but at least they’re learning. And then there’s some that are hungry, they’re in there, but they’re not learning and they realize within 90 days, 120 days that they bought themselves crazy. It’s not even because, because it is. If, if, like you said, if it was easy, everybody would do it, right? So I, I, I just wish, I wish people would realize more what franchising is. And I have lots of conversations with people about what franchising can and cannot be. One of the things that I wanted to talk about too is I have a friend, that very successful medical chain in, in and around our province of Alberta. For those that are Americans, province is the same as a state. We just have a little bit more land mass than most of the, the states in the U.S. but he decided, and he’s a good friend of mine, opened up, this is probably 15, 16 years ago, maybe a little bit longer, opened up one location. By his third location he looked at franchising, we had conversations and the next thing I know he said, no, I don’t like the franchising model, I’m going to lose control. I’d rather just open up every single one of them to a pat, to a, to a point. Now that he has like 13 locations and he’s expanding, going to expand across Canada and it’s not franchise based and I look at his life and him flying around jet setting everywhere trying to open these locations and hiring, he may hire a manager like you’re talking about with franchising, but he’s very picky about what goes on in his life. And you look at him and he doesn’t look like he’s in his early 40s, he looks weathered and old. And I think that it would have been better for him to go to the franchise system. But you know, a person convinced against their wills of the same opinion, still in a circumstance like that, wouldn’t franchising, as I mentioned him be much more sensible? Wouldn’t he take away more out of his life? Not just time wise, but profit wise as opposed to running a brick and mortar and chasing around to 13 locations, some of them three, four hours apart.
[00:25:06 – 00:27:27]
Probably still in that scenario. In a couple of thoughts there, you know, in Province X down the road you can hire a manager, that manager is never going to be as incentivized as the guy with the skin in the game, right? So if it’s a franchisee that knows their local market, get, you know, they, they have relationships, maybe there’s a network there that they can tap into, but because they’ve made an investment, they put skin in the game, they’re going to be more driven to make that successful. Right. So I do think it would take some of that office plate. I do see some companies will jump into franchising too early. You know, maybe they’re not well capitalized, maybe they haven’t really baked the model all the way and open up additional locations. So you know, it can be a con. But I think for a lot of companies out there, and I’ve helped some companies do this, you know, to get into franc franchising, a couple of benefits, it does allow you to scale potentially faster. Right. Because you know, others are funding it rather than you having to fund it yourself or get, you know, get dead on it. And you know you’re going to have people that are highly incentivized. And you know, when you think about down the road, private equity loves franchising, absolutely loves franchising. And they primarily invest at the franchisor level. Sometimes they’ll buy up a large swath of franchisees. But I get so many calls from private equity firms. Hey Jon, what are you seeing out there? Who are you liking? Any introductions you can make? And what I’ve seen is it’s been strategic capital. They’ll come in oftentimes they have a platform of several brands and they’re able to create some synergies and economies of scale within that to fund better fund franchisees. They bring capital to the table. But for that founder, like your friend, it can oftentimes be a higher multiple that he would be able get if it had that franchise banner around it. Because again, private equity loves franchising. So I do think in that case, yeah, it sounds like maybe he would have benefited from a work life standpoint. I mean, you know, if you franchise too soon, all of a sudden you’ve got kids all across Canada that you know, have expectations of you and that, you know, if you’re not fulfilling their expectations that you set, then that can be a big headache. But if you set the right expectations early on and then you build up a strong support team, yeah, it’s very doable. I mean there’s countless case studies out there. So I mean I, I do believe that franchising, when it’s done right from the company standpoint, can be extremely powerful. You know, certainly it’s not right for everyone, but for a lot of companies it can be.
[00:27:28 – 00:29:02]
Yeah. I’m thinking of the fact of like you talked about Froyo and, and the food based ones, their, their structure must have been sound of how they were operating. But then it was more of a Fad or you know, like I think of another one, I actually know the founder of it. I’ve met him and visited with him of Everbowl and I look how they’ve expanded with their franchise out of a box thought process. Right. And I wonder to myself, and I haven’t talked to him in a long time, it’s been probably two years. I wonder myself, how long is that going to fad going to go? You know what I mean? Like we’re back to that non food versus food versus that support network. And if you have a solid franchisee operator or the head company that’s running the franchise, is there a possibility that they make mistakes in looking at what’s the de facto standard for sales today? What’s going on? What is the pulse on the, on the railroad track of life right now? What’s the fad? Do they design franchises sometimes knowing that they’re only going to last 10, 15 years? Or is it they’re always their goal for it to last forever? Like I know that you talk about equity investment. I know also no equity investment can sometimes buy losses. Right. Buy something that they know is eventually going to be something to offset their, their principles of taxation and expenses.
[00:29:03 – 00:29:37]
Yeah. You know, I’d say the only one that comes to mind is the idea that, you know, oil changes in California may not be the best investment. Right. Because of the electric. Right. EVs coming. That being said, in the US they’re rolling back some of those EV mandates. We’ll see. But you know, but you’ll always need tired companies. Right. You know, just use the automotive example or you know, I think of like, I mean some of the ones that we’ve had a lot of clients getting involved in recently, youth soccer, you know, trampoline parks, you know, pet grooming, dog training, you know, back to the family and animals.
[00:29:37 – 00:29:37]
Yeah.
[00:29:38 – 00:30:12]
And in home senior care companies that will build wheelchair ramps and stairlifts and bathroom mobility solutions so people can age in place businesses and home and property services. I mean I’m invested in a business that does in Minneapolis that does paving and line striping like for parking lots. I mean that’s not going to go out of style. Another business I’m invested in temporary walls around like containment walls around renovation and construction sites. There’s always going to be a need for those. Right. You know, restoration, you know, water mitigation, mold remediation, you know, cleanup. Again, we like those non.
[00:30:12 – 00:31:05]
Sensible businesses. Yeah, sensible businesses that, that you’re looking forward and projecting as to what’s going on with the aging population from the boomers. Right. The octarians that die, have, or a lot of them have passed away still alive, their kids, my generation, the millennials, the list goes on. So you’re saying if you’re going to franchise or create a franchise or get into it, make sure it’s got a long term longevity and it’s tied around because you mentioned that earlier, around family, around estate planning, around keeping people in place. I love that, I love that response of, of people coming to build the ramps so you can stay at home. Because I work with clients all the time to make it so that they’re not in a long term care facility. And there’s the age better, they’re healthier, they’re happier. And all you needed was a few modifications. And if there’s a franchisee or a company that does it, that’s fantastic. It’s tied right to the heart.
[00:31:06 – 00:32:08]
And one other category, I’d say beauty. There are different ones within beauty. You might say, oh, that’s a fad, or that one’s got staying power. But an area that we really like is health and wellness. I mean that’s never been more top of minded. I just don’t see that going away. I don’t think health and wellness is ever going to be a fad. You know, certainly you’ve got fitness within there, but you’ve got a lot of recovery services. Say those are a little more fashion forward, a little more sexy maybe than some other ideas. But the one that surprised me this past year and we had a number of clients get in and do really well with this, it’s sold out in the US it’s just about sold out in Canada. It’s a business that does men’s testosterone injections. It’s men’s health. But TRT testosterone replacement would be the biggest service. I mean that’s certainly come to prominence in recent years. Right. I mean that’s become like very main, main stream and you know, maybe that’ll change. But the thing is once people start doing it, they really can’t stop doing it. So it is does create a recurring revenue type service, you know, for the owners. So that’s one that was wildly popular that I would say is a little more sexy than, than some others out there.
[00:32:08 – 00:33:02]
Well, residual income, most people don’t understand for those listening or watching a cell phone company is residual income. A cable company, residual income. I don’t know if they’re as good as a cell phone company anymore, cable companies, but at the end of the day if you can have some sort of a business where you have reoccurring people coming to them. Like I have a friend that owns a franchise in chiropractor and he literally is treating people. And yes, you have your people that don’t need to come all the time, but then he’s got his people that come all the time. And it’s health based, as you mentioned. It’s about people feeling good about their lives. I don’t know, this franchising worked really well. You kind of mentioned about vitamins and like maybe weight loss companies. Does that work well because of. People are always wanting to lose weight, they’re always willing to get healthier. Those. Have those been good franchise models as well?
[00:33:02 – 00:33:46]
They have, they have. At least the ones we’ve worked with. I mean there’s a handful in that space that we partner with and you know, they’ve got the, the longevity behind them and the team and the model and everything. So yeah, I’m sure there’s some players out there that don’t do as good of a job, but no, that’s definitely a hot area. And I don’t like using the word hot, but again, I don’t think it’s going anywhere. Yeah, I will say, I will say that scenario, it’s got some changes. I mean, there are new drugs coming on the market and I won’t claim to be an expert on all things weight loss. So I think for people to get involved, you know, they have to do their due diligence and understand what are the, what risks are there that something could change on the drug front that could negatively or possibly impact the business. So a few more unknowns around that one.
[00:33:46 – 00:34:28]
Due diligence. So that, that was key of what you just said. Do due diligence. People that are listening or watching and you’re interested, find somebody to communicate with. I don’t know if you deal with people on an individual basis, but you know, it doesn’t matter whether you live in Canada or you live in the US Brothers and sisters of one another and you can learn a lot. And there’s, there’s complexity, differences between regulations, between one country to the other, but there’s so many similarities. So do you get a lot of individuals that are contacting you or are you more dealing with the upper end equity managers and people that, that have tons of cash?
[00:34:28 – 00:34:32]
Now our bread and butter is working with individuals and you know.
[00:34:32 – 00:34:32]
Awesome.
[00:34:33 – 00:35:43]
Yeah. And our process is entirely free. I should have said this at the beginning of the show, but it’s entirely Free. We get a referral fee from a franchise brand when a placement happens and none of that gets passed on to our clients. So it’s entirely free to work with us. And, you know, if you go out there and start Googling, you’re going to see a lot of noise. You know, every franchise brand’s putting their best foot forward, their marketing message. Even the top 50 list or top 100 lists from different publications, oftentimes companies are paying to be on that list. It’s more of a PR move. So that’s where we come in. We’ve got relationships in the industry. We kind of see what’s going on behind the scenes. We know what’s resonating with others with similar backgrounds. And so, yeah, I bring all that together in a very concise way to say, all right, Dwight, there in Edmonton, you’ve shared a little bit of information about yourself with me. If I were in your shoes, here are 10 or 12 opportunities that I would want to consider looking at across a number of different industries as a starting point. And we can always iterate off of that. But what I found is when you’re looking at real opportunities and starting to have real conversations, that’s when you start to crystallize in your mind what are those characteristics that make sense for me in a business, things I like and don’t like. And then, you know, it gives us, like I said, a really good starting point to kind of iterate off of.
[00:35:43 – 00:37:41]
No. That’s fantastic. So people that reach out to you, you certainly have the knowledge. I already knew that, asked the questions so that you would answer it. Because I do research the people that are on my show qu Extensively. I knew you’d be able to help out pretty much anybody. And getting to talk to you now today, this is the first time meeting you, your personality is very calming and assertive at the same time. And I know people can’t think that can happen, but it’s true. You can be assertive with your knowledge and your information that you’re sharing, but still have that compassion and that assertiveness and that kindness all wrapped up into one. So. So I would highly recommend people reach out to you to discuss and talk about franchising, even if it’s a no, even if it’s no for now or no for never. Quit sitting back on the sidelines and wondering if you can own a business. How about you find out? Right? Quit. Quit living a life of fear. Right? You talked about fear earlier and that stops so many. So many people. One of the things that you mentioned was we talked a little bit about the cost and investment. Traditional business, they spend a lot of money, they have leasing costs and etc. That goes on with owning a franchise. Some franchises cost a few hundred thousand to million plus. I’ve seen them and obviously you’d know more about those numbers than I would. But when a person buys a franchise and they’re spending, what are they actually getting? Are they, are they. Are all franchises the same? You’re going to get a turnkey situation or are you just getting. Here’s a manual, go find your location, you know, do your marketing. Or the best franchise is doing everything where you just go up, turn a key, walk in and you’ve had your training, obviously you’re going to get people coming in from corporate to train how to do things right to keep the image the same across all the franchise. What has been your experience in regards to franchising?
[00:37:42 – 00:40:28]
Yeah, you know, I’ll give just an experience I had last year when I opened my most recent franchise down in Delray, Florida. And it’s a business that has custom orthotics inserts for your shoes and we sell some footwear as well. And so this was one that is retail based. A lot of our clients get into things that are service based where you don’t have a customer facing retail location. But this is an example where you did, you know, so I paid probably $50,000 when I signed the franchise agreement that bought me the right to the franchise brand into that defined territory down there where no one else can open up within an X mile radius. You know, they engaged the franchisor, had engaged a real estate firm in the area that knows the local area. They put together their top eight, you know, sites that we could choose from. Grant, we could have gone beyond that if we wanted to, but I flew down there with a person from the franchise. We spent a full day visiting every one of the sites. We had follow up conversations, they negotiated on our behalf. Ultimately it was my choice which location. But they gave me all the information, all the facts and the recommendations on which ones they would choose and how they would prioritize those. So you know, again it was my call, I’m the business owner, but they highly supported and influenced, you know, where I ultimately decided after that, you know, they handled the build out. I didn’t have any hand at all in the build out other than, you know, had to sign some checks. Right. They handled the build out with, you know, all the branding, the inventory, ordering everything, you know, and then they’ve done all the marketing since. This is one where it’s a little more hands off than some. I’ve only been down there twice in the past year and that’s just to check in. One time I was down there for an hour and a half and you know, I came back certainly with feedback for the franchisor and they jumped on it and made changes. But that’s one where I’ve been very hands off. I’d say more hands off than most. But yeah, they, they should be the ones handling a lot of the digital marketing because they can see marketing data sets from other locations and know how to optimize that. So we’re spending our money wisely. Anything that I’m able to do from a grassroots standpoint, you know, supporting the little league baseball team or getting involved in the chamber of commerce, things like that, you know, work in my network, especially if it was here in Atlanta, that helps drives down your lead acquisition costs and stuff. But. But no, the franchisor should do the heavy lifting on that side, I’d say. In most franchises, you know, one of the heavy lifts that you’ll have is the hiring piece. Now they’ll provide you with templates and recommended salary ranges and you talk to other owners about where they found their best people for different roles. End of the day, that’s, that’s typically your hire. But no, a good franchise or is going to check a lot of boxes for you and that’s something you’ll understand through the exploration processes. What’s on my plate? What’s on their plate and how do they support. And you want to make sure you’re getting the support for the royalty that you’re paying.
[00:40:28 – 00:40:50]
Of course. So that 50,000 that is buying the franchise rights, but then the expenses after the fact. Right. What would a French, if you don’t mind me asking, what would a franchise typically before they start doing their first sale or their first service, what would it, what have they been costing before they’re actually starting to produce?
[00:40:50 – 00:41:27]
Yeah, certainly it’s across the board, but I’d say you’re at that upfront franchise fee plus your startup cost, plus most franchises will build in about three months of working capital, assuming, you know, you’re not profitable, you know, in the first couple of months in most cases. And so they build that in. It’s the item 7 of the FDD, the Franchise Disclosure Document, where they say, hey, here’s what your all in investment range looks like. I would say most of what our clients are getting into from an all in Investment range is, you know, on the low end maybe 150,000, you know, to 400,000. Quite a few in that ballpark. Granted, I had clients buy multiple trampoline parks a few weeks ago at $3 million a pop, so.
[00:41:27 – 00:41:28]
Holy.
[00:41:28 – 00:41:41]
Yeah, every now and then you’ll have those outliers, but I would say, you know, we do have some that are closer to 75,000 to 100,000, but, but the vast majority I would say are between that 150 and 400,000 ballpark from an all in investment standpoint.
[00:41:41 – 00:41:57]
Thank you so much for sharing that because I guarantee people are wandering and then it gives them an idea what they need to come up with. Right. What they need to secure in financing. Or maybe it’s a family that gets together and starts a franchise. I don’t know where that happens too.
[00:41:57 – 00:42:18]
Yeah, and it is very common to finance. I mean obviously banks prefer lending to franchises than startups. Right. So, you know, here in the States, SBA and then Canada has some programs too. Lending is very, very common. And typically you’d be putting in maybe 15, 20%. So you know, say that 50,000, but then maybe your all in investment was 200,000, but you’re financing that other 150 piece.
[00:42:18 – 00:42:56]
That makes sense. So we’re going to, we don’t have a lot of time and I definitely want to talk about your book. You’re the author of the book on non food franchising. What was it like writing this book? Did you have anything along the way of writing this book that was like an epiphany of wow, that is really good. I never give myself props for that or give that person props for helping me get there. What was it like writing your book? And, and at the end of the day, what kind of person. Obviously it’s about non food franchising. Is it going to be, is it a light hearted book? Is it something that’s all very analytical? Tell us more about your book please, Jon.
[00:42:56 – 00:43:57]
Yeah, it’s about 90 pages, very readable and I try to pack as much content in and most of my clients have read it by the time we get on the ph phone. So it has definitely done its job. You know, we released it two years ago. You know, writing it was a labor of love and you know, life never slows down when you’re taking on a project like that. So it meant waking up early, before the kids were up on Saturday and Sunday mornings, just pounding out content, you know, for a good six to nine months. But so proud of, of it being out there, you know, we give out free copies right and left. If any of your listeners want to come to our website, you know, we’ll gladly share a free downloadable copy with them. Certainly if anybody wants to buy it on Amazon, all the profits go to Hope International, which is a great nonprofit that we support, that we believe in. But no, it’s. It’s been great just from an education standpoint and helping people fill in the gaps in their understanding of franchising, whether it be the financials, whether it be the industries, whether it be the exploration process, the fdd. We share some case studies of clients in there. Again, the goal is to get the juices flowing and increase that understanding so people can better understand if now’s the time to explore on their own.
[00:43:57 – 00:45:49]
That’s fantastic. I love the fact of. Of I could see the excitement in your face. For those that are watching, you’ll understand. It was. Jon enjoyed writing a book. Whether you had to get up on the weekends or not. Even writing my book, it was five and a half months of smiles and crying because it was more of. It’s not really necessarily 100 business. It’s my. It’s like my podcast. It’s the origin leading up to where I started my brand and my podcast. And, you know, it just. Just sharing those little things about my life. And I had these epiphanies and it was going like, wow, I didn’t realize that I actually accomplished that. I gotta pat myself on the back, right? Because we sometimes don’t do that in our lives. And I’ll pat you on the back from here virtually, because, you know, that book sounds phenomenal. 90 pages of packed information to help others adjust their sales of life. Right. It doesn’t have to be complicated to want to want more. And it’s okay to read Jon’s book and go, you know what? This isn’t for me. And it’s so. It’s even better, though, if you go, wow, hmm. I’m going to step outside of my comfort zone because that’s the only way that I can be successful in life, is not live within my comfort zone. And those that are in their comfort zone and like it, that’s perfect. We’re not here to judge you. But if you have that little spark inside your heart and your soul that says, hey, I want to do something, get a hold of Jon, go to the website. I’ll make sure it’s in the show. Notes that you’ll be able to access. Get that book, read it, reach out to him. It’s never too late to give a heck about your life. It really isn’t right. We can, it doesn’t matter how old you are. You know, one quick question. What would be your oldest person that you’d know, age wise, that has started a franchise? Is there people in their older years that start them or they’re always in their younger years?
[00:45:49 – 00:46:21]
Yeah, I’d say it started on their own in their 60s. You know, we have had clients in their 70s that do it in conjunction with the adult child, which is kind of neat when that happens. We had one gentleman I believe maybe early to mid-70s, and his, he and his three sons went in on it and they were all keeping their day jobs. I think one of them was running point on it. But you know, it’s neat when you see that. But I’ve had guys as young as 24 years old too, and, and you know, it’s not right for every 24 year old. Probably not for most, but, but it is for certain ones. And this young guy just done great.
[00:46:21 – 00:46:32]
That makes me, makes me glad to hear that stuff. So, Jon, if you had to give our listeners one last closing message, what would you tell them in regards to giving a heck and never giving up?
[00:46:32 – 00:47:11]
Yeah, you know, I love what you said earlier about getting off the couch. And you know what I found is there’s never a perfect time to buy a business. You know, there’s timing, the words better than other timing. But end of the day, making a big change, you know, stepping into business ownership, you know, making a jump from what you’re currently doing, giving a heck. There’s never a perfect time. There will always be something you point to as to why it’s not the right time or an excuse. But I think end of the day you owe it to yourself to at least get, get the ball in play, get off the couch, start exploring. When you start moving towards option A or option B, in my career, I found that’s when option C comes along so, you know, get in motion and good things happen.
[00:47:11 – 00:47:40]
Oh, exactly. I completely agree. You know, it’s like the domino effect, right? Dominoes fall, they keep on falling. And that’s the way it is. Once we activate our, our mind as to what we could have and potential of our lives, we live better, our step is greater, we just live a more, more great life. So thanks for that message. Our time is up. I want to respect our listeners in your time. Before we end, can you please tell the listeners what’s the best way they can reach you? Jon?
[00:47:41 – 00:48:03]
Yeah, come out to my website franbridgeconsulting.com fridgeconsulting.com Share your email address. We’ll, you know, and actually you can click on the website and get a free downloadable copy of the book, but we’ll then reach out to you and send a calendar link. You know, if you’d like to take a next step and jump on a call, you know, we’d be happy to chat further about what we talked about today and, you know, see if it could be a good fit for you.
[00:48:03 – 00:48:09]
Awesome. I appreciate that, Joh. Any other last final words you’d like to share before I wrap up the show?
[00:48:10 – 00:48:21]
No, I think, I think it was all well said, really enjoyed the conversation, love the podcast. And yeah, there’s never a perfect time to give a heck, but best times start today, right?
[00:48:21 – 00:48:34]
Absolutely. It’s never too late. So thanks so much for being on Give a Heck, Jon. I appreciate your time and sharing some of your experiences so that others too can learn. It is never too late to give a heck.