Adam Torres and Kenny Rose discuss FranShares.
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Show Notes:
How does fractional franchise investing differentiate itself from traditional franchise investment models? In this episode, Adam Torres and Kenny Rose, Founder & CEO at FranShares, explore Kenny’s journey as an entrepreneur and FranShares.
About Kenny Rose
Kenny has worked with over 600 franchise brands in more than 100 industries. As an expert on franchise evaluation, he is able to identify the best ways to deploy capital into franchise ownership to maximize return on investment and operations. Kenny is a Certified Franchise Executive (CFE), with the International Franchise Association (IFA).
Kenny’s views on franchising have been featured in Business Insider, Forbes, ABC, The Hustle, American Express, the Amazon feature book, “More Than Just French Fries,” and other publications worldwide, in total reaching over 300 million people throughout the world.
About FranShares
FranShares is an investment platform that lets anyone diversify their portfolio, hedge against inflation, and earn passive income through franchise investing. Our investors enjoy unparalleled transparency while investing in SEC and FTC regulated real assets that are rigorously-vetted and managed by our world-class team of franchise experts.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of mission matters. My name is Adam Torres. And if you’d like to apply to be a guest in the show, just head on over to mission matters. com and click on be our guest to apply. All right. So today I have on the show, Kenny Rose, and he’s founder and CEO over at FranShares, Kenny.
Welcome to the show. Great to be here. Thank you so much for having me. All right, Kenny. So we got a whole lot to talk about today. So I definitely want to get into FranShares and really fractional franchise investing and what that means. And I guess just to get us kicked off though, before FranShares and before this particular business, I see founder and CEO.
Were you always an entrepreneur? Like when did you get started? Oh, I started my first business when I was 12 years old, selling coffee for a buck a cup at a museum. Hold on. You were a coffee person. I never heard that. I heard lemonade. I was a baseball card guy. I was like, I heard a lot. Coffee. How’d that happen?
You know, they, they would do the same festival every year and we always see like, you know, thousands of people camped out and it was essentially a couple of baseball fields and we were driving by as they were like starting to get the place set up for all the campers to come. And we were like, I wonder what they do for coffee in the morning.
Or I think we just started talking about the morning and waking up there. And then it was like, oh, what do they do for coffee? And it was like, you have to get up and drive 20 minutes to find coffee. So we’re just like, what are you guys doing tonight? And we just woke up early. It was like. We were brewing two pots of coffee at a time, throwing it in one of those giant orange Gatorade jugs, set up a table, and buck a cup, and then next year we went back, we had creamers, people were excited, and man, I would make like a thousand bucks in a weekend, and as a kid that young, it was amazing.
That is amazing. And did you have a brand? What did you call it? Or was it just like, hey, get your coffee? Yeah, it was just more, Hey, get your coffee. I didn’t learn branding until many years later. I was just going to say, actually, that’s not a bad brand to get your coffee. You just had to, you just had to scribble it.
That was all. Yeah. If anything, it would have been bucket cup coffee. Ooh, that’s. That’s taken for sure. Bucket cup. com. That’s too good. That’s too good. I’m not, I’m not that good. So fast forward, but obviously that’s the first business. How did you kind of like level up and continue in your career? Did you have other businesses and then you get out of college or otherwise or like how did you get to the point where you’re at now?
And, you know, I feel like high school and college, it was always just like random little things, not quite like that, but just little businesses here and there. And, you know, my dad’s an entrepreneur, so that’s where I got that entrepreneurial bug from. And, you know, I went to college and they’re, I mean, now they have majors for entrepreneurship and startups, but they didn’t back.
Then, and you know, I did different areas within the business. Wasn’t sure what I wanted to do. And then I heard about this internship at Merrill Lynch. And at the time I didn’t know what Merrill Lynch or financial advising was, but I knew what jump into the good opportunity was. So I decided to go in for an interview and I was grilling this guy on what financial advising was, and I was like, Oh, this is great.
It’s like, I get to be an entrepreneur running my own business, but underneath like this big reputable name. And so I interned there and actually funny story, the advisor I was working for actually got. Like a week before it was supposed to be done, and I was like, Oh my gosh, that’s my infomerial after I graduate.
So I just went and kicked up in the biggest corner office the next morning, pretended I was still working there, and I was like, Hi, my name’s Kenny Rose, I’m gonna be your next intern. And they’re like, who the hell is this guy? But they gave me an internship and they were the largest group within Maryland, California.
And so, yeah, so I had a great experience with them. You showed up without an invite. Like for that, you just walked into the office. Well, I know you already knew you, but you know what I mean? You were like, yeah, the other guy got fired and you were like, this is comfy. Oh no, it’s such a big office. People don’t really like know who you are.
Like I remember one advisor walked by me and he’s like, Well, you’re allowed to have a beard and I’m like, no one told me to shave it. And he’s like, damn, but, but you know, I got the news that he was let go. I didn’t really get any context, but I knew my key card still worked. So I just went in at 6 AM and honestly, I had entirely planned to go to the biggest office, but I was like, let me scan it.
And I’m going to go find an internship somewhere here. And those guys, I was walking around, no one was there yet. And then I see, you know, the two biggest offices have guys in it. And it was like, they are the sharks. So it’s like, you do not go over there. But I was like, they’re the only ones here. So let’s go give it a go.
Yeah. Wow. So fast forwarding a bit, how did you first come upon the model of like just a fractional in general, like the idea of fractional and like franchise, like how did the fractional side come to your sphere? Well, the funny thing was the franchise side had come up way before. Yeah. I left Merrill and I got into this thing called franchise brokerage where basically I worked with.
Executives who are looking to leave corporate world thinking about franchising, but didn’t know much about it, let alone which one to get. So I’d work with them to recommend brands based on their skillset, their budget, their goals, coach them through the whole research and purchase process. And so I was at the world’s largest franchise brokers.
They had 150 offices around the world. And while I was doing this, yeah, I’d still keep up with tech news here and there, just being like young, somewhat fresh grad. And I read about the Series A of a company called Fundrise. And Fundrise, like, traditionally to invest in commercial real estate, you had to be an accredited investor.
You know, million dollar net worth or certain income threshold. And I, you know, saw how they really, like, made it available for anyone. And I was just really fascinated by this because as I’m reading it, a light bulb hit me. And I was like, I can solve a lot of problems in franchising with this. So they introduced me to fractional investing, but to me, it was still like, they just kind of like touched the surface on it.
Cause that was already an asset class that was out there. But thing is, capital’s everywhere. And also those deal people, they’re highly sought after. And what I realized is that. People who have the money to own a franchise don’t usually actually want to run a franchise. Like they don’t want to go into a location every day.
Like they’re usually part of a big corporate monster and they want to stay in a corporate monster. But on the other part, you know, most people don’t have the money to buy a franchise anyway, and they’d love to invest in one, but you can’t just go walk into a location and say, can I invest in this? And then, but the other part of this too is just that like in franchising, like any business, you want someone who owns and operates it.
Like it should be what they do for a living. But the problem is, is that, like I said, those who have the money don’t have the experience and all the people who have all this experience. You know, they’ve worked, been a district manager at Duncan for 10 years. They could run locations in their sleep while they worked for Duncan for 10 years.
They don’t have a million bucks laying around. And so you have this big divide of where money comes from and who the operators are. And so it was like, really, we think about a natural thing that had to happen where people could fractionally invest into a franchise to own a piece of it while they’re funding an entrepreneur to go and build their own.
Yeah. And when I think about that, I think when I first looked at your model, I’m like, Oh, and I know it’s. different in this case, because the individuals that I’m going to reference, they have the money and they just buy them outright. And I’m sure they have operators and things like that. But a lot of the celebrities that buy into franchises and stuff like that are own a bunch of restaurants.
You’re like, yeah, they’re not running that. We know they’re not, but are other people doing that or do other people have? So obviously there’s, you know, if you have a big syndicate or big group and other things like that, our family offices, maybe they do it and they have some other things, but this correct me if I’m wrong, like.
This seems like you’re now allowing, you know, the everyday investor, even to who has some extra money on the sideline that they want to get into it at whatever level that franchise price and, or opportunity is that for their fraction that they can, you know, get participate in you’re letting them participate in the opportunity.
So they can still live their life, but still have the benefits of that. Am I off on exactly. Does that make sense? Nope. You, you hit the nail on the head. Hmm. So it’s almost like they’re democratizing the franchise experience almost to where other people can do it too. That’s awesome. That’s really it. Yeah.
And you know, it’s an additional benefit too, is that like people really want to own something tangible that they can see and touch and feel. To walk into it. Like if they were like, uh, if they, it’s a brick and mortar and let’s say the opportunities in their neighborhood, they want to walk in, see what’s going on and have that feeling of, yeah, I got a little piece of this one.
Yeah, and it’s so great for the franchisors, those parent companies too, because like I said, they get these real experienced owner operators, but also Think about how much marketing dollars it would cost to get someone to react like you just did for walking into a location you own a piece of. Like, that’s loyalty.
Few brands like Chick fil A and In N Out command. But if you own a piece of it, you’re excited about it and you want to be a part of it. If you invest 500 bucks in a Dunkin you never go into Starbucks again. And you’re making sure your friends don’t go to Starbucks either. You say, you go to my Dunkin And so it’s, it’s a really cool thing.
I think like Reddit versus Wall Street, but like in your neighborhood. Yeah. And that’s, that’s like a, that’s like a Warren Buffett eating McDonald’s, right? Like, same thing. He’s not going to Burger King. You can pay Warren Buffett to go to McDonald’s and he’s going to tell everybody he’s eating McDonald’s.
That’s a, that’s a really good one. I’m going to write that down. Yeah. And then the, and that he’s telling everyone Warren Buffett’s going to do it. And then also, when you think about the Chick fil A model, I mean, they kind of wrote the book on some of this stuff, like, and it’s a very different model than what we’re talking about here.
But one of the benefits that they have that I See some similarities here too, is that they do provide the opportunity for someone that would be a great, a person that can actually run the Chick fil A, but doesn’t have the money. Their whole model is based on doing that. And so it’s super competitive and it’s insane.
And they, I mean, there’s some other things that, but there’s not ownership to a bunch of other things that we. Beyond the context of this conversation, I don’t want to derail it. I want to definitely want to focus on franchisees, but it seems like it’s a combination of many models that are really stacked towards the, towards making the business successful at the end of the day, like none of these components are there just for marketing.
Yeah, exactly. It is. And you know. It’s funny you say marking because I mentioned that Chick fil A similarity a lot too. And yeah, I say like, Hey, you know, Chick fil A has got a great sandwich, but is it the best one? That’s an argument people will have for years, but what I will say is that it’s the best one at the airport.
Like that’s my airport food. I don’t know what else I can, you know, at the airport, it’s the only one that’s going to be like the right size. And they’re okay, go ahead. Yeah, exactly. And plus, like, when you see a Chick fil A commercial, like, they’re not showing off the chicken sandwich. They show the operators.
They show the person running the place. Because, like, you’re connected to them in that service. But I will say, Chick fil A does get something very wrong, though. Because they do make it available for people, and you do have to have operating experience. But they don’t end up getting actual equity ownership.
And so it’s kind of a joke in the franchise world that, like Yeah. That’s like the joke in the franchise world. Like, Oh, they’re really just glorified managers. And I honestly agree with that, but also think it’s sick. And so that’s what we’re changing is basically like bringing that Chick fil A model to every other brand, but they actually do have equity in it.
And they are owners because you do have to be an owner to really bring that care of an owner to it. Totally agree with that. Yeah. It makes a lot of sense. And what kind of industries are you franchising in general? Like what kind of niches are our type of opportunities are available to this? I mean, well, they franchise everything.
I mean, we’ve done things from kids fitness to food to weight management, but you know, we’re excited for a lot of other ones that are coming on. Like there’s hair care and automotive. I mean, senior care. Like if you think of an industry, it is franchised and senior care is a big one. And everybody’s getting older and everybody.
And just, you look at any chart on any aging thing or anything. It’s like, how can we not need more? And there’s no way, like, it’s amazing. It’s great. And it’s, I personally, like, I don’t own any full disclosure. Everybody listening. I don’t own anything in senior care, but I just, you look at it, this is our finance, the financial advisor background, right?
You’re like, it’s not going to go backwards. We’re not getting younger. Yep. Yep. Exactly. And I had to ask for sex. I’m going to say yet, you don’t have any senior care yet because we’ll get you on there one day. Okay. There you go. There you go. Kenny. So tell me what’s next for the business. What’s next for franchise.
Tell me more about the continued growth of it and what the plans are for going forward. Yeah. So, you know, getting started, we’d worked with some smaller brands out there, which people are really passionate about. It’s great to like get them ownership and get those brands exposure. We’ve got some of like the world’s largest ones that I’ve, you know, said names like Duncan and Comforted and like, we got a lot of really great ones that are coming on board that are just household names, but, you know, as we continue to grow, what I’m really excited for is, you know, when it’s more on your local level where your money’s going to also, like you can invest in single locations near you or across the country, but what I’m really excited for, like I’m based in Chicago.
And I can’t wait for when we have a Chicago portfolio. So like the places you go to eat at, go work out, get your hair cut, you own a piece of all these things. You know, like why spend money where everyone else is earning from it when you can spend it something that you own a piece of and it’s contributing back to your own portfolio.
You know, you can go spend. Get your groceries at Trader Joe’s and it feels good because they smile at you, but like most that money isn’t staying in your community versus if I invest in Chicago, I’m creating Chicago jobs, the money staying with the owners and the employees and I’m getting a return too.
And so it really just like allows people to invest locally, which is something that you can’t really do outside of real estate. And that’s a whole different conversation. We could have a whole nother episode on amazing. Kenny, it’s been great having you on the show today. How do people follow up? How do they learn more about the opportunity?
Thanks Yeah, thank you so much. You know, the two best ways you can go to our website at franshares. com, but I’m also very active on LinkedIn and I love connecting with people and hearing their stories. So go find me there as well. Fantastic. And for the audience, just so you know, we’ll definitely put some links in the show notes so you can go check it out and get connected.
And speaking of the audience, if this is your first time with mission matters and you haven’t done it yet, 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 Kenny, keep on doing what you do. Appreciate you providing those opportunities out there for investors, for the operators and the whole pipeline there. So thanks again for what you do. Thank you so much. And thanks again for having me on and educating the people.