Latest / Beyond Fulfillment Podcast / The Myths and Realities of Franchising with Jon Ostenson

Transcript

The Myths and Realities of Franchising with Jon Ostenson · Beyond Fulfillment Podcast

• 0:04
  I always had that desire to build my own empire, Dave, to do something for myself and didn't know what that looked like.
• 0:10
  You know, I wasn't sure what that off boarding ramp was going to be.
• 0:13
  So today's guest is John Ostenson, a true powerhouse in the franchising world.
• 0:20
  After a thriving corporate career, including time at consulting giant Accenture and a leading role at Carter's Oshkosh b', Gosh, John made the leap into entrepreneurship, eventually serving as president of Shelf Genie, investing in multiple franchises, and now helping
• 0:38
  others do the same as the founder of Fran Bridge Consulting.
• 0:42
  In this episode we detail John's journey from climbing the corporate ladder to how he built his own empire through franchising.
• 0:51
  We'll discuss the realities behind franchise success stories and the common pitfalls.
• 0:56
  We explore why non food franchises can be a hidden goldmine and discuss discuss John's best selling book and how he connects aspiring business owners to the right franchise opportunities.
• 1:08
  If you've ever wondered if franchising is your ticket to entrepreneurship, this episode is packed with practical advice and real world examples you won't want to miss.
• 1:18
  As always, if you found value from this content, please like and subscribe.
• 1:24
  All right, John Ostenson, welcome to Beyond Fulfillment.
• 1:28
  Hey, excited to be here, Dave?
• 1:30
  Yes, sir.
• 1:31
  We're excited you could take the time.
• 1:33
  So John, you are a heavyweight in the franchising world and your company that you've, you formed in the last couple of years is called Frambridge Consulting, which helps people.
• 1:46
  You basically are a matchmaker to helping people get into the right franchise.
• 1:51
  So we're excited to dig into all that, but you've had a long, a long successful corporate career and then before you became an entrepreneur.
• 1:59
  So can you just walk us through your, your backstory for our viewers?
• 2:03
  Yeah, you know, like so many of your listeners spent many years in the corporate world and very thankful for the time there.
• 2:08
  Started off with Accenture as a consultant and then I spent about 10 years with Carter's Oshkosh Bagash, the, the children's apparel company and you know, got my MBA along the way and yeah, had a lot of responsibility and
• 2:21
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  Had that desire to build my own empire, Dave, to do something for myself and didn't know what that looked like.
• 3:04
  You know, I wasn't sure what that off boarding ramp was going to be.
• 3:07
  So through circumstances was very fortunate to have the opportunity to step in as president of Shelf Genie franchise system.
• 3:14
  Shelf Genie, it's custom pull out shelving for kitchens and pantries franchise system that has franchisees all across North America.
• 3:20
  And through that experience I really fell in love with the franchise model and I just saw how all these diverse backgrounds could come together under a shared system of support and become business owners.
• 3:31
  And long story short for me, I, I partnered with the founder.
• 3:35
  We eventually spun off and became franchisees ourselves of a few different brands and have had different partners along the way.
• 3:42
  Currently invested in several franchises.
• 3:45
  But for the most part we've got good people running the businesses for us now.
• 3:48
  And allows me to spend most of my time consulting and helping others through my business, Frambridge Consulting, essentially acting as a real estate broker.
• 3:56
  But for franchises.
• 3:58
  Okay, appreciate that.
• 4:00
  And a whole lot to dig into, especially on the franchising because that's a hot topic.
• 4:05
  And I know a lot of our listeners, some are involved and a lot of them certainly see that as, as a viable option.
• 4:12
  But let's just go back.
• 4:13
  So you, you've been in the corporate world for quite a while.
• 4:16
  You've been in sales, head of sales at a, at a massive Carter's.
• 4:20
  So did you always have this, this entrepreneurial desire?
• 4:25
  But it just, it just like didn't, didn't know how to go about it, so to speak.
• 4:30
  You know, going back to even mowing grass as a kid, you know, you kind of like building your own empire, calling your own shots, you know, instead of someone else's.
• 4:38
  And I could have done the corporate thing forever, you know, I would have been fine with that.
• 4:43
  But you know, you only live once and I wanted that freedom.
• 4:46
  And I looked around and saw, you know, my friends that were taking the best trips and playing the most golf were oftentimes business owners.
• 4:53
  Now they'd work their butts off to get to that point.
• 4:55
  But I saw where entrepreneurship could lead you and I just got tired of having to ask off for vacation.
• 5:00
  And so I'd say it was something that over time was bubbling up inside of me, Dave.
• 5:05
  And really wasn't sure what to do with that or what path to take.
• 5:08
  Franchising, candidly, was not on my radar Most of that time it wasn't until I was introduced to Shelf Genie.
• 5:13
  And that's when I had my light bulb moment.
• 5:16
  Okay.
• 5:17
  And so let's, let's talk about that light bulb moment too, because like you said, franchising, everyone knows what that is, you know, has maybe, you know, some people may look at it a certain way.
• 5:30
  Right.
• 5:30
  Based on, you know, experience or some of the stories you hear with, depending on the franchise.
• 5:35
  But talk about that light bulb moment.
• 5:37
  And what was it like for you when you realized, wow, this could be the way that.
• 5:40
  That I build my own empire?
• 5:42
  Yeah.
• 5:43
  You know, they're at Shelf Genie.
• 5:44
  I mean, we were supporting franchisees across North America.
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  They had such a diverse group of backgrounds, so they brought to the table and, you know, we were providing them with just significant amounts of support, you know, answering their phones, making the phones ring with our marketing services.
• 5:58
  We provide them with a technology stack of product development.
• 6:01
  But we also built this mastermind where they were essentially able to learn from each other and exchange best practices and ramp up to profitability a lot faster than if they were trying to do this on their own.
• 6:12
  So I really just saw that franchise was much more than fast food.
• 6:16
  You know, when I say the F word, franchise people usually think fast food, but there's just so many other industries out there.
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  And for me, that was eye opening.
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  And I realized, hey, this is a world that I want to go deep in.
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  And as I've had my journey, you know, and have had successes, it's made me want to share that with others.
• 6:33
  So I love getting on stages, speaking.
• 6:35
  You know, I wrote the book, you know, Non Food Franchising, which I'd love to share with all of your listeners.
• 6:38
  But I love educating on it and then helping others kind of go down the path that I went down.
• 6:44
  Okay, why don't we talk about the book right now?
• 6:46
  So non food, Fran, first of all, why non food?
• 6:50
  Yeah, I've got nothing against the food guys.
• 6:52
  We love them, we need them, we support them.
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  My humble belief is they're easier ways to make money.
• 6:57
  You know, there are opportunities out there that in some cases may require fewer operating hours or less hourly employees or carry higher margins because you don't have food waste.
• 7:07
  You know, there are a lot of businesses that aren't trendy, aren't going out of style.
• 7:12
  You know, with food, you are susceptible to consumer whims.
• 7:15
  Right.
• 7:15
  I mean, frozen yogurt was big until it wasn't.
• 7:17
  You know, our clients tend to like things like property services and health and Wellness and categories like seniors and kids and pets.
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  Things that people are always going to spend on regardless of the economy.
• 7:28
  So again, nothing against the food guys, but I believe on a day to day basis there are easier ways to make money oftentimes in these other industries.
• 7:36
  Okay.
• 7:37
  All right.
• 7:38
  And so what, what made you write a book about this?
• 7:42
  Yeah, I figured it was the best way to educate, you know, large scale and give people kind of an easy first step.
• 7:49
  Because what I found was there's a lot of curiosity around franchising.
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  A lot of people admittedly would say, I, I don't know where to start.
• 7:57
  I don't know, you know, how franchising works.
• 8:00
  I don't know understand the funding side, what kind of industries we can get in.
• 8:04
  Would love to see some actual case studies of others done that with similar backgrounds.
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  You know, what kind of funding options do we have?
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  How do the financials work, how do I find the right franchise and vet it?
• 8:16
  So all that I packed into about 90 pages.
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  So I try to make it very readable.
• 8:21
  We've sold thousands and thousands of copies, but I've also probably given away even more for free.
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  And I love just sharing.
• 8:28
  And all the proceeds of the book go to Hope International, great nonprofit that we support.
• 8:32
  So certainly wasn't from a money making angle.
• 8:34
  You know, I wanted to do good with it.
• 8:36
  But yeah, we'd love to share a free downloadable copy with all of your listeners.
• 8:40
  Yeah, absolutely.
• 8:41
  So we'll put that in the show.
• 8:42
  Notes for everyone.
• 8:43
  So if they're, if they're watching this, they can, they can download that and learn more.
• 8:48
  Okay, so let's talk about.
• 8:51
  Because, right, franchising, you know, you there, there's certainly success stories, but then I'm, I'm sure we've all heard some of the horror stories too, where it doesn't work out and kind of where things can go wrong and you're
• 9:02
  stuck in a job basically and losing money.
• 9:06
  Right.
• 9:07
  So like how did you find success as a, as a franchisee?
• 9:12
  Yeah, you know, if business ownership was easy, everyone would be doing it.
• 9:17
  And I think that is the misconception is a lot of times that the franchise is going to run itself.
• 9:21
  No, it still takes a lot of work, you know, on the operator's part.
• 9:24
  So, you know, there are cases where, you know, just like every industry, when you've got several thousand companies operating out there, you're going to have good players that provide great support and value to their franchisees and you're going
• 9:34
  to have some, unfortunately that don't and that's where we, where we come into trying to help it.
• 9:39
  No, I'd say to your question, my own, you know, history, you know, I've learned a lot along the way.
• 9:45
  I've had good partners.
• 9:46
  I've had ones that I wouldn't partner with again, as well from an actual partnership standpoint.
• 9:51
  And so I'd say my takeaway is more of it's on the operator and the mindset in most cases, not every case, but in a lot of cases, you know, being willing to spend on marketing, being kind of having
• 10:03
  that growth mindset, that's something that I feel that I brought to the table.
• 10:07
  You know, looking to partner with other franchisees in learning and exchanging best practices, you know, just being very open minded and kind of, you know, having a humble attitude coming in.
• 10:19
  I think oftentimes that can be a challenge for people if they think they're the smartest guy in the room and they step into a franchise system and they want to do everything their own way.
• 10:28
  And I've seen that it's like, well, why'd you buy into a franchise system?
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  So you have to have some degree of humility, which I think I had, and that helped my experience along the way.
• 10:37
  Okay, all right.
• 10:38
  It's, it sounds, sounds like just common sense, but let's, let's talk.
• 10:43
  I mean, you kind of alluded there too.
• 10:45
  But what, what are some of the biggest mistakes that you see people making when they step into a franchise that, that, that derails their success?
• 10:54
  You know, I think some people just shouldn't be business owners.
• 10:57
  I, I think there are a lot of people on the sidelines that should be business owners that are not.
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  But there's some people that will step in and again, they don't have the growth mindset.
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  They aren't willing to invest in marketing.
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  They aren't good with people.
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  You know, I, people oftentimes ask me what makes a successful franchisee.
• 11:14
  It's business.
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  End of the day, it's being good with people, being someone that people want to work for or work with.
• 11:18
  You know, and then it's secondly being willing to follow the system.
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  And that sounds so cliche.
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  I know that, Dave, but when I was a franchisor shelf genie and I saw 100 franchisees all operating the same business across North America, our most successful franchisees inevitably were the ones that followed the system the closest.
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  Again, sounds cliche, but that was true.
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  That's why you get involved in a franchise.
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  So in a good franchise or is going to allow some degree of innovation and letting you try new things.
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  And that's where the best ideas oftentimes come from.
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  But for the most part, you want to stay within those guardrails and not go too crazy.
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  Okay, all right, so you're at Shelf Genie, the light bulb goes on.
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  Wow.
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  I really like the franchise model.
• 12:01
  You see the opportunity, so, and then you get involved as a franchisee in several and you have success there.
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  So what, what made you start, Fran?
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  Bridge Consulting?
• 12:14
  Yeah, you know, the older I get, the more I realize what I enjoy doing on a day to day basis and what I'm good at and what, what maybe I'm not as good at.
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  One thing I realized, Dave, I like working with clients.
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  I love being strategic.
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  I don't want to be behind the scenes.
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  And when I was at Shelf Genie, I got to do some of that.
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  But at the same time I was, you know, I had a team of about 40 employees.
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  I was dealing with HR issues every day.
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  I was, you know, just having to have culture meetings and meetings about culture and things that some people thrive on.
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  For me, I, that didn't get me as excited as getting out there working with clients.
• 12:53
  And so I kind of stumbled into the consulting through a friend of mine.
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  We're up, up in Washington D.C.
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  is my 40th birthday weekend and I was exhibiting at a franchise conference and he said you would be a really good franchise consultant.
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  And I was like, wait a minute.
• 13:08
  Actually that makes a lot of sense.
• 13:09
  And so I told my wife, hey, let's look at this and you know, never look back.
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  So I love what I do because I get to help people do what I did, you know, step into business ownership and connect the dots and educate.
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  And I don't have to have a large team to do it.
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  And so again, from a day to day basis, I've got the freedom to kind of live life on my terms.
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  Now.
• 13:30
  I'm the hardest boss I've ever had, you know, admittedly, but when you're passionate about what you do, it is so true that you don't think of it as work.
• 13:39
  Okay, love that.
• 13:40
  And I'm sure many of our listeners can relate to that in terms of being passionate about their work and not having it not feel like work.
• 13:48
  Okay, so you, you, you have another light bulb moment.
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  And did you, did you even know, like franchise consulting was even a thing at that time?
• 13:57
  It wasn't on my radar.
• 13:58
  I was familiar with it, but I never thought about because I surround myself with other business owners, Dave, and for them it's all about growth.
• 14:08
  It's building big companies.
• 14:09
  And I was with seven guys last night.
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  We had a holiday party.
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  And each of these guys has a 12 to 15 million dollars plus business in different industries.
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  And we get together every month and learn from each other through the Entrepreneurs organization.
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  But, and so when I had a team of, you know, 35, 40 people, my thought was, all right, how do we scale this bigger?
• 14:28
  So that's where my mindset was.
• 14:29
  I wasn't even looking around on the landscape to say, hey, maybe I should pivot into something that I think I would enjoy a little bit more.
• 14:36
  Okay, all right.
• 14:37
  And then real quick, so you, you brought up eo.
• 14:39
  I mean, how did you get involved with them?
• 14:42
  It's been an EO for about seven years.
• 14:43
  Can't say enough good things.
• 14:45
  My business partner at Shelf Genie was a member of ypo, very similar organization.
• 14:52
  And you know, ultimately these are creating masterminds, if you will, for business owners.
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  They're global organizations.
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  Here in Atlanta, our chapter has about 175 members in, in EO, each doing at least a million dollars a year in revenue.
• 15:06
  And, you know, it's been instrumental to my entrepreneurial journey because again, I had a corporate background.
• 15:12
  So business ownership was something that I kind of understood but hadn't been through the reps yet.
• 15:18
  And I was able to learn from others very.
• 15:19
  And that's one of the reasons I'm passionate about a franchise system is again, you're able to learn from others so you don't repeat the same mistakes.
• 15:28
  Allows you to move faster.
• 15:30
  Okay.
• 15:31
  All right.
• 15:31
  And so with your consulting, right, you basically, you work with people that want to get into the franchising business and you help them find the franchise that's, that's the right fit.
• 15:41
  Is, is that what you do?
• 15:43
  Exactly.
• 15:43
  And I'll mention, they never pay us a nickel.
• 15:46
  We get a referral fee from the brand on the back end.
• 15:49
  For them, it's a sales and marketing cost.
• 15:51
  So nothing's passed on to, to our clients.
• 15:53
  Very similar to a real estate model.
• 15:55
  Okay.
• 15:56
  All right.
• 15:57
  And so when you have, you know, because you're, you're working with the same people oftentimes that maybe that are listening, that are hearing this, they're thinking, maybe this is something for me.
• 16:07
  So what are some of the common misconceptions that people have about franchising?
• 16:13
  But, you know, before they get into.
• 16:14
  It again, I think part of its industry, they don't realize the variety of industries that exist out there.
• 16:20
  We work with over 600 franchise companies that are looking to expand, to have markets to expand into.
• 16:24
  And there's so many different niches that never would have ever been on their radar.
• 16:29
  So I'd say just as far as what's available would be one misconception.
• 16:33
  Second one, I think I mentioned this earlier, but you know, there is a misconception sometimes that because it's a franchise, it's going to run itself.
• 16:40
  Right.
• 16:41
  The fact is a lot of things are in place.
• 16:43
  You still have to have a great operator running the day to day operations.
• 16:46
  About half of those that we work with are, you know, serve as an owner operator day one.
• 16:51
  About half of them put someone in place to run the business.
• 16:56
  Is that a good idea?
• 16:57
  It can be.
• 16:58
  It just has to be the right individual.
• 17:00
  If it's not the right individual, then you're going to find yourself leaning in.
• 17:03
  So a lot of franchises will market themselves as semi passive, semi absentee.
• 17:08
  Some call it an executive model.
• 17:09
  And the whole idea is that you're managing a manager.
• 17:12
  If you have the right operator in place.
• 17:15
  It can work great because that franchisor is supporting them on a day to day basis, answering a lot of their questions, taking the burden off of you.
• 17:21
  But if you don't have the right operator, then you're gonna find, you'll find yourself leaning in until you do.
• 17:26
  I'd say that that's a big one that oftentimes comes up in conversations is just the ownership style that's in their misconceptions around that.
• 17:33
  So I try to lay it out clearly because I've seen a lot of case studies and I don't want to ever sugarcoat it and make it sound like it's, you know, a slam dunk.
• 17:42
  You've got to have the right person running the business.
• 17:44
  Okay.
• 17:45
  And so it sounds like too with your franchisee experience that you basically took more of the passive role to where you were, you were not a day to day operator.
• 17:55
  I mean, did you do that from day one?
• 17:57
  Yeah.
• 17:58
  There have been situations where I've been more hands on than others.
• 18:00
  I mean, there's some where I'm very absentee.
• 18:02
  But my approach has been again, I know what I enjoy doing on a day to day basis and what I'm good at.
• 18:08
  So I've tried to find operators that are more hands on, that are going to build the team that are, you know, doing all the things that go associated with personnel management.
• 18:19
  That's been.
• 18:19
  My approach is more hands off from the day to day.
• 18:22
  Yes.
• 18:23
  Okay.
• 18:24
  All right.
• 18:25
  And so, John, if people are out there listening to this and they say, wow, you know, I didn't think about franchising, but that maybe is a good route for me.
• 18:34
  And maybe they want to get in touch with you and learn more about what the opportunities out there and, and how you help specifically.
• 18:40
  What's the best way that people can reach out to you?
• 18:42
  Yeah, come out to our website, Franbridge consulting dot com.
• 18:45
  That's F R A N Bridge consulting dot com.
• 18:48
  Share your email address.
• 18:49
  What will then happen is my system will reach out to you with links.
• 18:53
  You can download our book as well as the link to my calendar.
• 18:56
  So if you'd like to take a next step and jump on a call, I'd be more than happy to talk to any of your listeners and get to know them and help them process the idea of franchising.
• 19:04
  What I found, Dave, is oftentimes they're thinking about buying an existing business and I love having that conversation.
• 19:09
  We talk about the pros and cons of what that looks like versus franchising.
• 19:12
  So I'm sure there's some in your audience today, they're thinking, oh, I'm going to buy an existing business.
• 19:18
  I think it's worth considering franchising.
• 19:20
  There's some good trade offs.
• 19:22
  Okay.
• 19:23
  All right.
• 19:23
  And we will link all that in the show notes for everyone as well.
• 19:26
  All right.
• 19:27
  Well, John, thank you so much for taking the time to be here today and sharing all this valuable wisdom from your journey with our listeners.
• 19:33
  We greatly appreciate it.
• 19:34
  Thanks for having me, Dave.
• 19:36
  All right.