Adam Torres and Jon Ostenson discuss franchises.
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Show Notes:
FranBridge connects entrepreneurs and executives with the premier non-food franchise opportunities in the market. In this episode, Adam Torres and Jon Ostenson, CEO and Franchise Consultant at FranBridge Consulting, explore FranBridge Consulting and the pros/cons of franchising vs. starting a company from scratch.
About Jon Ostenson
Jon is a top Franchise Consultant, owner/investor, author, and speaker specializing in the area of non-food franchising. He draws on his experience as both the president of an Inc. 500 franchise system and as a multi-brand franchisee in serving his consulting clients that are looking to explore business ownership opportunities.
Jon serves as CEO of FranBridge Consulting where he helps clients understand all aspects of non-food franchising in the process of introducing them to opportunities from the over 600 high growth brands that he represents.
About FranBridge Consulting
FranBridge is led by its Founder, Jon Ostenson, a top 1% Franchise Consultant in the US, and frequent contributor on franchising across a variety of outlets and publications. Jon is a multi-brand franchisee himself, and along with his business partners, he has great operators leading these ventures. As a result, he is able to commit over 90% of his time to helping others achieve their own dreams of freedom and wealth generation through business ownership.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, if you’d like to apply to be a guest on the show, just head on over to mission matters. com and click on be our guest to apply. All right. So today’s guest is John Austinson and he’s a CEO and a franchise consultant over at Fran bridge consulting. John, welcome to the show. Adam, thanks for having me.
I look forward to a great conversation. All right, John. So lots of cover here today. I definitely want to get into what you’re doing over at FranBridge Consulting in your work and also just talk about franchising in general, you know, starting a friend or, acquiring a franchise versus starting a company from scratch or creating another concept from scratch.
Just kind of get into some of the pros and cons. I know a lot of business owners, a lot of entrepreneurs that watch or listen to this show. So I want to definitely get into the weeds on that one with you being an expert in that field. But just to get us started, we’ll start this episode the way that we like to start them with our mission matters minute.
So John at mission matters, our aim and our goal is to amplify stories for entrepreneurs, executives and experts. That’s what we do. John, what mission matters to you? know, Adam, I believe that so many people have that inner entrepreneur. They want to break out from the nine to five and live life on their terms and you know, build a impact their families and their communities in a bigger way and have that time freedom and financial freedom.
And oftentimes that comes through business ownership and our mission is helping people connect the dots and understand how to step into business ownership, what that looks like, what the right fit. would be for them so that they can ultimately realize that freedom. Nothing’s easy. It takes a lot of hard work, but ultimately we get people going down the right path and equip them the best we Amazing. And love having mission based individuals on the line to share, you know, why they do what they do and how they’re doing it and what we can all learn from that so we grow together. So thanks for sharing that. And I guess just to get us started here, John, consult franchises. When did you get first introduced to that concept?
how did you begin your journey there? You know, Adam, like so many of your listeners, you know, I spent many years working for someone else you know, had a great run in the corporate world. I’m very thankful for it. But when I got into my mid thirties, I poked my head up and said, I’m really building someone else’s empire.
I’ve got this desire to build my own and, I didn’t know how to break free without Mike and I was very fortunate and blessed to kind of stumble into franchising and had the opportunity to step in as president of shelf genie franchise system. There’s a large national company that.
And in my role as president, I got to support owners all across North America, people with diverse backgrounds that were keen to achieve business ownership and freedom for themselves by becoming part of a shared system. And really, I fell in love with franchising through that experience. And for me, it was eye opening to see the franchising.
It’s much more than fast food. There’s so many other industries that people can get in. And that’s something that I’m very passionate about. But long story short, the founder of Shelf Genie and I eventually spun off. We invested in franchises ourselves as franchisees and have had other partners over the years as well and you know, we’ve got good people running those businesses for us now and it allows me to spend most of my time helping others, again, connect the dots and identify the top opportunities in their market and help them understand how franchising works.
Maybe before we go further in the franchising conversation, I mean, it’s a word that’s thrown around often, especially you bring up the fact that you were talking about, like, there’s opportunities outside of food franchises. I think we associate that word many times, or I do with, you know, the big McDonald’s or things like that.
You think, oh, that’s a franchise. But maybe some of the people that haven’t explored in the past don’t necessarily even know the differences. So maybe just talk a little bit about what franchising means in general, like, what it means to be a franchise or versus a franchise, talk about it just in general.
Absolutely. you know, when someone says the F word franchise, you know, people automatically think that would be right. That represents don’t have for sure. But there’s another half of the market that encompasses industries like home and property services, health and wellness categories like pets, kids, seniors, all these other areas that people are going to spend on regardless of the economy, right?
And there’s so many different niches within, examples like that. And so for franchising, I would say. To kind of take it to the 30, 000 foot level. Not everyone should be a franchisee. You know, it’s not a right fit for everyone. Some people are too entrepreneurial and want to put their thumbprint all over it, but my humble belief based on what I’ve seen is that franchising is truly a better path to business ownership.
For majority of people out there, and it just do you risk the situation? Nothing’s ever guaranteed. But if you can go in with armed with information and eyes wide open that franchising allows for, then you just have much higher likelihood of success. So some of the benefits of franchising would be obviously it’s a business model that has been proven out in other markets.
So you’re not starting from scratch. You’ve got a franchise or on the sideline that essentially acts as a coach. The better you do, the better they do. They’ve got other franchisees in the system. So you’re, marching in the same direction, learning from each other, all running a common business , within your own markets, you get a lot of synergies, whether it be buying power for goods or services, you get against that institutional knowledge, you get a lot of marketing data and it allows you to get to 3rd base a whole lot faster than trying to do it on your own.
So we just see the benefits. Totally outweighing and obviously the cost would be you are paying a royalty stream back to the franchisor in it for all of that support and not every franchise system is a good fit just like any industry you’re going to have strong players And you’re going to have those that aren’t as strong.
So that’s where we come in to help our clients. Our service is entirely free To take clients through the process help them play match up and we’re essentially a real estate broker But for franchises, that’s a good way of putting it and yeah, we love educating clients On the franchise world and then what the top opportunities are for them.
now, you made a statement. You said that you believe that starting to franchise yourself is one of the reasons why it’s a better way to start a business or be a part of owning your own, your own business. Now, , you not listed a number of, the pros. What are maybe some of the cons, like some of the cons for like that versus starting your own thing?
Yeah, you know, cons, it could be, you know, first off, it is a partnership, right? You’re in, it’s almost like a business partner and as or and partnerships can be great. Sometimes they’re not as great. And so, again, if you’re not in with the right franchise or and you’re in with 1, that isn’t providing the support that you need, that could be a detriment.
I would say. Secondly You know, you have to stay within the lines. And again, some people are too entrepreneurial, and they don’t want to stay within the lines. It’s really interesting, Adam, a lot of I think of that movie, The Founder, when you say that, John. You ever see The Founder? Absolutely. I think of that movie where the guy, when he sells the first franchises, and then the guy’s like making like chicken and all this other stuff, and they’re like, wait a minute, this is just hamburgers.
It’s supposed to be McDonald’s. I love it. That’s who I’m thinking of. Is that what you’re talking about, by the way? You just want to go do your own thing? Absolutely. And a good franchisor is going to give their franchisees leeway to be innovative and go try new things. But they run the risk of, if they let you go too far outside the lines, that you could do something that damages the brand, not only for them, but other franchisees.
So, you know, there are more rules you have to live by. But in turn, you also get a lot of process steps and systems already in place. You’re not having to recreate yourself. So, you know, it’s interesting, Adam, when you look at the success rate of franchising versus, you know, starting from scratch it is significantly higher as you would imagine within franchising.
Banks are much more likely to lend to franchisees than to startups. And it’s interesting, research has been done to look at the exit multiple franchises versus comparable non franchises in the same industry. And franchises is usually traded multiple upon an exit. Yeah, and by the way, I, agree with you.
Like, I’m a big fan of franchising, and I’m a big fan of entering them, especially if that’s when you’re just starting in business, too, because I feel like that royalty that you’re paying maybe the franchise and, you know, give or take, you’re, The bruises and bumps that you take when you start something from scratch and you don’t know exactly what you’re doing.
I think that far outweighs the fee that you’re paying. And I like the fact that you’re talking about the exit side of things and even just that concept of creating a business that you could possibly exit for most first time businesses or business owners, like that’s not even in there.
That’s not even in their vocabulary of what they’re trying to accomplish. And they don’t realize that to maybe some years later. So that’s I’m a big fan of franchises. And I’m curious about, since you live in this world, I mean, you’re, you’re doing it day in and day out and consulting and helping and kind of doing the matchmaking side, as you mentioned, like who’s buying, who’s buying franchises, like who’s a good fit, like what, a good, avatar for somebody that’s ready to enter a franchise.
Yeah, certainly we have a wide range of different backgrounds, but I’d say quite a few individuals in their thirties and forties, fifties that are saying, Hey, again, I’ve been building someone else’s empire. I’m ready to build my own about half of our clients are looking to make the jump, maybe from the corporate world or from, you know, a different business.
The other half make the jump where they would be running it as an owner operator. Day to day. Okay. The other half are looking to step in to what’s called semi passive or an executive model, many call it. That’s where they put a manager in place and they continue to keep their day job. So we have a lot of doctors, a lot of lawyer clients that say, Hey, I’m a high paid W 2.
I want to get something going, but I’m not willing to step away from my day job just yet. But I love the idea of having the tax benefits and investment diversification that comes through business ownership. And I always want to make sure I’m not sugarcoating that approach. You know, I think.
Instead of semi passive, semi involved is probably a better term, because, know, if you’ve got a fantastic manager, it can absolutely be done, and a lot of our clients do that, where they have someone else running the business for them, obviously, the buck still stops with them, but if you’ve got a great franchisor on the sideline, and you have a strong, incentivized manager running the business, it makes it very doable, And that franchise is always providing that support to the manager, so it takes some of the burden off of you.
However, if you don’t have a strong manager and you’re going down this road, you’re going to find yourself leaning in a lot more and you’re going to have headaches until you do find the right manager. So, again, I want people to go in eyes wide open that it still takes time, still takes involvement, but that is a very common approach that, again, probably half of our clients take.
So, another thing that obviously is the core function of what you’re doing is you’re helping people select the correct franchise that’s going to be a good fit for them. Can you maybe, like, let us behind your process a bit? Because after, at the end of this, I’m definitely going to give you the opportunity to leave, you know, contact information, website, things like that, so that those that are interested or want to learn more can follow up with you.
But give us, give us a little bit of insight into your process so people know what they’re, what they’re getting into. Absolutely. Just like any industry, again, there are strong players, and then there are ones that are not providing the value to you that would not be worth the investment. So we come in to help our clients in that regard.
And some of the things that we’re looking for first off, we’re working with, we represent over 600 different franchise companies across a variety of industries. These are companies that are in growth mode, looking to expand. There’s still a lot of markets to expand into. And some of the criteria that we have, as I’m thinking about, what are my favorite?
50 or 60 at any given time, just having been a franchisor and being a multi brand franchise, be myself, I’m looking through those lenses at things like obviously the profit model has got to be there. The competitive advantages versus competition. Uh, We’re looking at what are current owners in their system saying about their experience.
We’re looking at that leadership team. You know, we want to see not only in the Industry experience represented also franchise experience represented on that team. There are individuals that have been there, done that, supported successful franchisees in the past, even if it was with a different company.
So, there’s a little bit of art to it, a little bit of science, a lot of it candidly, Adam, then comes down to what’s available in their market. The fact is franchising has been growing incredibly fast the past couple of years. And as a result, you know, in good markets like yours and like mine.
things move incredibly fast and sell out. So we’re constantly working our relationships with the franchisors to try to bump our clients up in their pipeline so they can get a shot at the optimal territory within their markets.
Fantastic. John, first off, it’s been great having you on the show today and learning more about what you’re doing, how you’re, pairing business owners, entrepreneurs, executives, people that are looking at entering the business side of things for the first time and taking control of their future.
With a great opportunity to be able to do that and helping them choose and select the right vehicle. I think that’s super important. , what’s the best way that people can follow up and learn more about Fran Bridge Consulting and get the conversation going if they’re interested? Absolutely. And I’d say that the first step, if you’d like to get a free copy of our book titled non food franchising that I wrote a couple of years ago, it’s a great primer to kind of get the juices flowing and get some ideas out there and help you understand the world of franchising, but you can get a free copy of that book and also book a call with us again.
Our service is entirely free. I just come up to our website, franbridgeconsulting. com. F R A N. Bridge consulting dot com. And you know, also follow me on LinkedIn. I put a lot of content out there but would love to jump on a call and get to know you , and help you think through what business ownership could look like, and then I come back to you with some ideas and go from there.
Fantastic. And for everybody watching, just so you know, we’ll definitely put the links in the show notes so you can just click on the link and head right on over. And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, be sure to hit that subscribe or follow button.
This is a daily show. Each and every day we’re bringing you new content, new ideas, and hopefully new inspiration to help you along the way in your journey as well. So again, hit that subscribe or follow button. And John, thanks again for coming on the show. Thanks so much, Adam.