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Franchise Stacking - Jon Ostenson #6411 · Financial Survival Network

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Speaker 1: You're listening to Carrie Let's's Financial Survival Network, where you
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Speaker 2: Welcome, you are listening to the Financial Survival Network. I'm
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Speaker 2: your host, Carrie Lets, And well, you know, we talk
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Speaker 2: a lot about investing here. A lot of it's passive investing.
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Speaker 2: You put your money here, you put your money into
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Speaker 2: precious metals, cryptocurrency, whatever. What about putting it into yourself?
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Speaker 2: What about a business franchise? We've talked about it before.
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Speaker 2: John Austensen is with us now from Fanbridge Consulting. It's
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Speaker 2: great to have you on, John, So I always thought
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Speaker 2: of like franchising is kind of the shortcut to starting
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Speaker 2: your own business. You basically kind of buy somebody else's
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Speaker 2: knowledge a business plan, and you kind of start from there.
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Speaker 2: What am I missing? Yeah?
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Speaker 3: No, it allows you to start on second or third
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Speaker 3: base in most cases. Right, you've got a franchiser on
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Speaker 3: the sideline that has established product market fit and other markets.
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Speaker 3: They provide you with that playbook to go execute against,
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Speaker 3: and you know you're able to step into a technology
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Speaker 3: stack day one that's been customized, marketing that's been optimized.
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Speaker 3: You've got to see of other franchisees all live in
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Speaker 3: the same thing day and day out, so you can
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Speaker 3: have this built in mastermind. So you know, there's a
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Speaker 3: lot of benefits that can come through the franchise model.
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Speaker 3: And you know, franchising is like every other industry out there.
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Speaker 3: You've got great players that provide great support in this case,
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Speaker 3: and you've got some that don't provide good of support.
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Speaker 3: And that's where we come in to help our clients
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Speaker 3: identify that the top opportunities that really allow them to
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Speaker 3: just focus on execution, go out there and know, live
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Speaker 3: life on their terms.
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Speaker 2: So tell me, like you've obviously been at this for
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Speaker 2: quite a while, just tell us who the most successful
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Speaker 2: franchisee you ever had. You known't have to name names,
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Speaker 2: but just give us a case study here.
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Speaker 3: Yeah, you know, off the top of my head, I
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Speaker 3: pointed Nathan in South Carolina and Nathan it became the
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Speaker 3: largest franchise of two minute in the truck moving service
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Speaker 3: started off with one location, and then once he was
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Speaker 3: in that franchise system, had the opportunity over time to
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Speaker 3: buy other franchise these locations when they were looking exit.
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Speaker 3: And he got up to about twelve different markets doing
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Speaker 3: forty five million a year in revenue. And you know
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Speaker 3: what I love about Nathan's story is that he would
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Speaker 3: come to me every year or two and say, Hey, John,
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Speaker 3: I've got this young guy, young gallon my organization. I'm
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Speaker 3: looking to promote into more responsibility. Love brought and buy
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Speaker 3: another into another franchise system by an opportunity where you know,
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Speaker 3: I can place them and let them kind of, you know,
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Speaker 3: start to build equity themselves and knowing that the franchise
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Speaker 3: is going to be supporting them along the way.
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Speaker 4: That's pretty cool.
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Speaker 2: So and he just started with one franchise. How much
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Speaker 2: did you have to put.
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Speaker 4: Up for that franchise, gosh off the toep on my head.
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Speaker 3: I don't remember the exact number, but you were probably
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Speaker 3: all in in that case. Maybe you give or take
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Speaker 3: a million dollars. This is on the higher end versus
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Speaker 3: a lot of franchises, just because it's a heavy cap
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Speaker 3: backs investment. Most of our clients today are getting into
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Speaker 3: opportunities that are maybe closer to that two hundred to
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Speaker 3: three hundred thousand mark. All in a franchise start costs
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Speaker 3: working capital, and we help our clients with SBA loans.
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Speaker 3: That's a great way to finance them. Obviously, banks prefer
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Speaker 3: learning to franchises. Retirement rollovers are another program for what's
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Speaker 3: called the ROBS program, and there's some other avenues as well.
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Speaker 4: But a lot of ways to make it happen.
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Speaker 3: And certainly there are franchises that carry a higher price tag,
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Speaker 3: but I'd say those are more in the minority these
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Speaker 3: days from work can thats are looking.
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Speaker 2: So, what are some popular franchise concepts that are out
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Speaker 2: there today that you're putting your clients into.
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Speaker 3: Yeah, from a thirty thousand foot level, we've got you know,
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Speaker 3: we're seeing a lot of interests, a lot of smart
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Speaker 3: money flowing into things like we were talking about before
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Speaker 3: the show, you know, home services and property services, everything
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Speaker 3: from restoration companies to cabinet companies, pool cleaning, flooring, you know,
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Speaker 3: artificial turf, things that people are going to continue to
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Speaker 3: spend on.
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Speaker 4: Dumpsters.
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Speaker 3: We've had clients to do really well in dumpsters. Kind
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Speaker 3: of these non sexy industries right, and I jected non sexies.
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Speaker 3: The new sexy rank comes to business owners. It's understandable
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Speaker 3: cash blowing companies that AI is not going to replace. Certainly,
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Speaker 3: we're seeing a lot of interest in health and wellness,
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Speaker 3: you know, longevity recovery modalities. For instance, anything related to
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Speaker 3: seniors these days is big, just with that whole macro
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Speaker 3: aging trend of that's not going away. So not just
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Speaker 3: in home senior care, but maybe companies that provide wheelchair
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Speaker 3: ramps and steer lifts and you know, mobility solutions allowing
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Speaker 3: people to age in place and stuff like these different niches.
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Speaker 3: You went think about anything related to pets or to kids.
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Speaker 3: A great one in the kids' space, team driving school
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Speaker 3: that's actually required in thirty six states and no one's
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Speaker 3: out there doing a good job of it today. And
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Speaker 3: so here you're coming in with the only national franchise
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Speaker 3: system in that space. So where we like to play
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Speaker 3: is niches things that when someone hears the word franchise,
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Speaker 3: they likely don't have on their BEINGO cards. So you know,
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Speaker 3: everything from hydraulic hoses to insurance adjusting to cost reduction consulting.
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Speaker 3: There's just so many types of opportunities that it's a
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Speaker 3: lot of fun for me to put these in front
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Speaker 3: of clients and say, hey, if I were in your shoes,
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Speaker 3: here are the top dozen or selling your market. They're
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Speaker 3: looking to expand there because nine times out of ten
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Speaker 3: they end up going into.
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Speaker 4: Something that was never even on their radar.
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Speaker 2: Ay size, you just beat me to my next question.
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Speaker 2: If you, personally, John, were going to buy a franchise today,
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Speaker 2: what would you go into.
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Speaker 4: We'll start off with some of the ones that I'm
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Speaker 4: invested in.
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Speaker 3: I've got a great one that provides asphalt paving and
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Speaker 3: line stripping for parking lots. I've got another one that
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Speaker 3: provides temporary walls like walls around projects and construction sites.
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Speaker 3: Another one that I co founded seven years ago, where
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Speaker 3: we built the business and then started franchising in about
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Speaker 3: three years ago up to one hundred and forty territorys.
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Speaker 3: That's a business that provides custom pullout shelving for kitchens
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Speaker 3: and pantries. So you know, I, personally, Carrie love that
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Speaker 3: home services arena. I think there's a reason why private
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Speaker 3: equity is flowing a lot of money in that direction
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Speaker 3: because people are you know, people will spend on what
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Speaker 3: they care about, and they'll spend on their homes there.
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Speaker 3: You know, obviously transactions are down in the market and
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Speaker 3: so people are looking to invest. We just put a
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Speaker 3: hot tub back behind our carriage house office last week.
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Speaker 3: You know, we're continuing to you know, we spend a
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Speaker 3: lot of money on home improvements, home maintenance, and a
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Speaker 3: lot of those can be recurring revenue at times as well,
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Speaker 3: which people really like. I think of pool cleaning. I've
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Speaker 3: done several placements in pool cleaning recently. Agree during revenue
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Speaker 3: type business in high margins.
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Speaker 2: All right, here's a question. AI boom, we know what's
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Speaker 2: going on with it every these AI this AI that.
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Speaker 2: How does that affect your business?
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Speaker 3: Well, first off, from my consulting business, I'm utilizing AI
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Speaker 3: in a lot of different ways.
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Speaker 4: I'm happy to dig into that.
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Speaker 3: But no out there en franchising as an industry, you know,
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Speaker 3: oftentimes you see these franchises in these different niches going
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Speaker 3: up against.
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Speaker 4: Mom and pop type competitors right end of the day.
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Speaker 3: These are small businesses that are locally owned, but they've
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Speaker 3: got that power of the innovation and the marketing everything else,
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Speaker 3: you know, the backing, and I think franchises are going
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Speaker 3: to continue to be a leg ahead on most small businesses. Oftentimes,
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Speaker 3: in these fragmented markets, you have less sophisticated competitions. So
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Speaker 3: if you're able to come in utilizing AI for better
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Speaker 3: marketing or better more optimized routing of the trucks, let's
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Speaker 3: say in one of those home services companies as an example,
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Speaker 3: you know, I think it's going to give you a
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Speaker 3: leg up.
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Speaker 2: Hey, So is there like a secret little niche that
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Speaker 2: you just came across recently that really is like turned
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Speaker 2: your lights on. I was out in.
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Speaker 3: Park City recently and it's got to spend some time
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Speaker 3: with the founders of a really cool business that it's
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Speaker 3: a fuel truck. It carries two hundred gallons of fuel
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Speaker 3: and goes around and fills up fleets of vehicles. And
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Speaker 3: so think about if you're a company owner and you've
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Speaker 3: got a fleet of vehicles, there's a lot of downtime
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Speaker 3: where your team members are having to go fuel up
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Speaker 3: those vehicles. Well, what if you can have someone come
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Speaker 3: out to the job site, to the you know, to
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Speaker 3: your office every night and fuel fuel.
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Speaker 4: Those up for you.
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Speaker 3: So I like that that's the only one that I've
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Speaker 3: seen in franchise.
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Speaker 4: And again it's recurring revenue.
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Speaker 3: It's B two B and in this case it doesn't
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Speaker 3: require hasmat and it doesn't doesn't require CDO license. You
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Speaker 3: have a large labor pull from.
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Speaker 2: So because it's two hundred gallons or less, you don't
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Speaker 2: need the hazmat. Huh.
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Speaker 4: And that may be the reason. I'm not one hundred
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Speaker 4: percent sure.
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Speaker 2: Yeah, interesting, h Yeah. Do they save money? Actually, did
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Speaker 2: they buy the gas cheaper then they could get it
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Speaker 2: at the station?
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Speaker 3: Yeah, in a lot of cases it can be because
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Speaker 3: you're buying in bulk. Obviously, you know, obviously the one
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Speaker 3: running truck's got to make some money as well. So
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Speaker 3: the bigger proposition is the reduced downtime. So in essence,
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Speaker 3: you're saving money by not having your paying team members
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Speaker 3: have to go fuel up and spend twenty five minutes
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Speaker 3: inside the convenience store, you know, doing whatever.
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Speaker 2: One thing people hate to do is go to the
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Speaker 2: gas station. You know, it's a universal paining point, and
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Speaker 2: to get rid of it, even if it costs you
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Speaker 2: a dollar or two more, it's certainly worth it. And yeah,
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Speaker 2: and if it takes away from people their time at
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Speaker 2: the office, it's a nice little benefit you could provide,
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Speaker 2: especially if you're already providing a company car. I don't
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Speaker 2: know how common that is these days. A lot of
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Speaker 2: companies' cost cutting wise, have just shut it down. So
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Speaker 2: uh but that that's kind of a cool nix.
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Speaker 3: So really there's a little bit more to you know,
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Speaker 3: fleets of vehicles to think like service vans for different
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Speaker 3: you know, whether it be companies or government eapitys or
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Speaker 3: you know, construction sites consume a lot of fuel, right,
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Speaker 3: and again, if you're not having to import that, it
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Speaker 3: makes a lot easier.
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Speaker 2: Yeah, yeah, and it's it's there's never a good time
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Speaker 2: to fill your car. That's what I've discovered in life.
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Speaker 2: It is this is never a good time for it.
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Speaker 2: Uh So, and then you get you could potentially do
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Speaker 2: add on services to that as well. Right, it opens
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Speaker 2: it up to car washes perhaps, or you know, checking
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Speaker 2: the tire, the oil, all of that stuff.
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Speaker 3: You're exactly right, And that's something that I call franchise stacking.
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Speaker 3: And we've had a lot of clients to get into
10:58
Speaker 3: is you know, starting to build a PORTFOLI. You have
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Speaker 3: different businesses and in some cases, Carrie, they compliment each
11:03
Speaker 3: other kind of like you're saying you've got the same
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Speaker 3: in use customer and you're able to leverage that relationship
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Speaker 3: in other cases, you know, it may be diversifying. But
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Speaker 3: i'd mentioned the pool cleaning. Well, you're over there cleaning
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Speaker 3: the pool every week or two. Your team is why
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Speaker 3: don't they also spray for mosquitoes? Why don't they also
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Speaker 3: fertilize the grass? Well, they are going to be eyes
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Speaker 3: and ears on the ground noticing, hey, maybe that you
11:28
Speaker 3: need your garage painted. And so I do like that
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Speaker 3: idea of the platform business and always encourage people to
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Speaker 3: think about what's right for their next season. What's going
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Speaker 3: to give you that platform that you can then have
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Speaker 3: a building block and build off.
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Speaker 2: All right, I got one for you here. This is
11:44
Speaker 2: a I don't know if it exists or not, but
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Speaker 2: everybody wants to write a book, but nobody is able
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Speaker 2: to do it. Very few people. I just happen to
11:52
Speaker 2: have written seven in the past fifteen months. But that's
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Speaker 2: just me and AI makes it really helps me. It
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Speaker 2: doesn't write the book, it's AI augmented. Is there such
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Speaker 2: a thing as a publishing franchise like that?
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Speaker 3: I've not seen a publishing franchise per se Yeah, that's
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Speaker 3: one of those things oftentimes we could ask about like
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Speaker 3: online businesses. There are some franchises that are online, but
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Speaker 3: oftentimes it's that local ownership in the market that justifies
12:21
Speaker 3: and makes sense for the franchise models. So I'd say
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Speaker 3: publishing polacalls into more of that online space. But that
12:26
Speaker 3: being said, there's so many interesting models out there that
12:30
Speaker 3: you wouldn't think of.
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Speaker 4: You know, when you think of franchising.
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Speaker 2: How hard is it to actually start a franchise. You've
12:37
Speaker 2: got to have several successful units I assume before you
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Speaker 2: can really go out and sell it to the public.
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Speaker 3: Right, it depends on the model, right, I mean, every
12:50
Speaker 3: franchising gets grouped together. End of the day, it's you know,
12:53
Speaker 3: hundreds of different industries and micro industries, and so you've
12:56
Speaker 3: got a lot of different characteristics in these businesses. But no, Carrie,
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Speaker 3: I'm always encouraging our clients to go in eyes wide open.
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Speaker 3: I let them know, if business ownership is easy, everyone
13:06
Speaker 3: would be doing it.
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Speaker 4: Right.
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Speaker 3: There's a reason why you can make outs and ize returns.
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Speaker 3: You are going to be putting in a little bit
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Speaker 3: more time than you would have passed the investment. Even
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Speaker 3: if you run the business with an operator in place,
13:17
Speaker 3: but you know, you can make out size returns. There's
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Speaker 3: a reason why the government incentivizes business owners, right. It
13:22
Speaker 3: allows you to open up the tax playbook in a
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Speaker 3: lot of ways that W two's just can't. It's because
13:28
Speaker 3: it does take a little bit more work.
13:31
Speaker 4: Sure, go into that.
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Speaker 2: Yeah, I find it fascinating that the number of franchises
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Speaker 2: out there, and you know, the it's just the variety
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Speaker 2: and it seems like there's something for everyone.
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Speaker 4: There really is.
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Speaker 3: And you know, most people don't have a background in
13:54
Speaker 3: that industry, and that's actually being in a lot of
13:57
Speaker 3: ways because they're not bring baggage. Instead, they're bringing in
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Speaker 3: skill sets that they're able to transfer over and really
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Speaker 3: lean on the franchise or for that training and for
14:04
Speaker 3: that expertise within that industry.
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Speaker 2: Yeah. All right, So three pieces of advice you would
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Speaker 2: give to somebody if they came to you looking to
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Speaker 2: get into a franchise.
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Speaker 3: Yeah, first off, it's entirely free to work with us,
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Speaker 3: So let me get that out of the way. I'm
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Speaker 3: like a real estate broker. But for franchises, we get
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Speaker 3: a referral fee from the brands on the back end
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Speaker 3: when placement happens.
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Speaker 4: None of that's customs fair. I want to get that
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Speaker 4: out of the way.
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Speaker 3: But no, I'd say, you know, get educated. You know,
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Speaker 3: that's why I wrote a book, you know, Non Food Franchising,
14:32
Speaker 3: a couple of years ago. We've sold thousands of copies.
14:34
Speaker 3: We'd love to share a free downloadable copy of all
14:36
Speaker 3: of your listeners, but it's ninety pages. It really helps
14:39
Speaker 3: you connect the dots and understand the world of franchising.
14:41
Speaker 3: So I'd say get educated. Secondly, you know, get off
14:45
Speaker 3: the couch and start movement. Take some baby steps. You know,
14:48
Speaker 3: you don't have to purchase right, but get in the game.
14:51
Speaker 4: Start learning.
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Speaker 3: I always say, Carrie, and it's been my experience, when
14:54
Speaker 3: you start moving towards the option A or option B,
14:56
Speaker 3: that's when option C comes out of let field. So
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Speaker 3: I believe getting in motion and not just talking about
15:01
Speaker 3: a lot of people talk about business owns, but a
15:02
Speaker 3: lot of people want want to be preneurs out there,
15:04
Speaker 3: but they never take a step in that direction. And
15:07
Speaker 3: then the third thing is start thinking about you know,
15:10
Speaker 3: if it's not you, who could be someone that you
15:12
Speaker 3: get slot in there to run that day to day operation.
15:15
Speaker 3: You know what does your community need you know what
15:17
Speaker 3: times of industries could be of interest? You know, and
15:21
Speaker 3: again start educating?
15:23
Speaker 2: All right, fascinating, It is any easy out there? Want
15:27
Speaker 2: to get in touch with John. What's the best way
15:30
Speaker 2: to get in touch with you? To reach out on
15:32
Speaker 2: the web?
15:33
Speaker 3: Whatever, Yeah, come out to our website Frambridge Consulting dot com,
15:36
Speaker 3: frin Bridge Consulting dot com.
15:39
Speaker 4: Share your email address.
15:40
Speaker 3: You'll then immediately receive a big link to download our book,
15:43
Speaker 3: either pdf version or audio version. Certainly if you'd rather
15:47
Speaker 3: draw out to Amazon than you know, all the proceeds
15:49
Speaker 3: from our book sales, do you go to Hope International,
15:51
Speaker 3: which is a great nonprofit that we support, But no,
15:54
Speaker 3: I'd say download the book. My assistant will then reach
15:57
Speaker 3: out to you with an email and to my calendar.
16:00
Speaker 3: If you'd like to take next step, jump on a
16:02
Speaker 3: call and we'll talk franchising, get to know you and
16:05
Speaker 3: talk about what some good options could be.
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Speaker 2: I love it really fascinating and there's a lot out there,
16:12
Speaker 2: and it sounds like there's something for everyone. And look,
16:16
Speaker 2: you give up something upfront and along the way, but
16:21
Speaker 2: if it increases your odds of success materially, then that's
16:26
Speaker 2: the price. Of admission and appreciate you coming on. John.
16:29
Speaker 2: You've got a question for John myself, shoot me an
16:31
Speaker 2: email klatcarrieluts dot com. We'll talk to you again, John,
16:35
Speaker 2: Thanks so much.
16:36
Speaker 1: Hey, thanks for having me, Thanks for listening to Carrie
16:38
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