Why “Boring” Franchises Are Winning Big in the AI Era | Jon Ostenson

As AI reshapes white-collar jobs, more professionals are turning to recession-resistant franchise businesses that solve real-world problems and can’t be automated away

Jon Ostenson of FranBridge Consulting joins The Small Business Safari to break down why some of the best business opportunities today are hiding in “non-sexy” franchises. From home services and senior care to pet services and B2B models, Jon explains why these businesses are thriving while many food franchises struggle with labor, margins, and operational chaos.

Chris and Jon discuss how AI anxiety is pushing corporate professionals toward tangible businesses they can actually control, why “semi-absentee” ownership is often misunderstood, and how franchisees sabotage themselves by ignoring proven systems. Jon also shares how he evaluates franchisors beyond flashy branding, what realistic funding and profit expectations should look like, and why operational leadership matters more than hype.

The conversation also dives into strategic planning using the Mount Everest metaphor and the importance of choosing a yearly focus word like “Ascend” to guide both business and personal growth.

🎥 Watch the full episode on YouTube: https://www.youtube.com/@TheSmallBusinessSafari

💡 GOLD NUGGETS 

•  Why non-food franchises often outperform restaurant concepts 
•  The businesses AI can’t easily replace 
•  What “semi-absentee” ownership actually means 
•  How franchisees fail by refusing to follow systems 
•  The Mount Everest framework for long-term planning 
•  One business goal + one personal goal = better focus 
•  Real franchise startup costs and funding paths 
•  Why operators must be incentivized to scale successfully 

🔗 Guest Links

•  Website: https://franbridgeconsulting.com
•  LinkedIn: https://www.linkedin.com/in/jonostenson
•  Book: Non-Food Franchising

🌍 Follow The Small Business Safari

•  Instagram | @smallbusinesssafaripodcast 
•  LinkedIn | https://www.linkedin.com/in/chrislalomia
•  Website | https://chrislalomia.com

Thanks to our sponsor Smart Hire Solutions LLC!

Transcript

Anti-Food Banter And AI-Proof Work

SPEAKER_02 0:00

Well, you brought up the F word. Food. Food. That's why we're we're the NF word. We're anti-food. We're non-food. But it's interesting. You actually, John, you hit a couple of uh things that I was told before I started too is that you will find the riches in the non-sexy. Um, and you know, I've got a number of guys who started their own business, not in franchises, but you named a number of ones where I think a lot of people go, asphalt paving, striping. I'm like, well, as a matter of fact, I know a friend of mine who bought into a franchise here in Atlanta in striping. I don't know how he's doing, but uh, he's a very sharp dude. He can, I'm sure he's gonna figure it out.

SPEAKER_00 0:38

There are a lot of parking lots out there.

SPEAKER_02 0:40

There are a lot of parking lots that are desperately in need of repair and maintenance. You talked about home services, I think. Excuse me, I get the hiccups going, Alan. Why is that? Uh I'm getting nervous. What? Uh because the answer I expected.

SPEAKER_03 0:57

Oh, okay.

SPEAKER_02 0:59

So I I just, you know, when you look back on some of the uh you talked about them already. That everything you just named cannot be replaced by AI. We can't. You you can't just automatically go out there and asphalt pave something. You can't go out there and pick up dog's poop with AI. Can you? I I don't think so. Okay. Maybe robots. Robot poop kitters. That would be a good franchise. You know, I think if we can come up with a laser poop eliminator, that's what we could do. It's just sit it out back. Unfortunately, what probably go wrong is the kids go running out back, they maybe didn't clean up very well, and next thing you know, their ass is just getting fried. Woo! So bad idea there, people. We're on to good ideas. Welcome

Strategic Planning That Actually Sticks

SPEAKER_02 1:40

to the Small Business Safari, where I help guide you to avoid those traps, pitfalls, and dangers that lurk when navigating the wild world of small business ownership. I'll share those gold nuggets of information and invite guests to help accelerate your ascent to that mountaintop of success. It's a jungle out there, and I want to help you traverse through the levels of owning your own business that can get you bogged down and distract you from hitting your own personal and professional goals. So strap in Adventure Team and let's take a ride through the safari. I think it's recording, Alan. I think oh I didn't hit the only four and a half years uh that we've been doing actually coming up four and three-quarters years. You've been doing this, people. Man, we're trying to get everybody up that mountaintop. We're trying to get everybody to be successful and keep going up things. And we're coming off a big time here at the Trusted Toolbox, Alan. We had our strategic planning meeting today, and I know you have a thought on that. It was a group group, it was awesome. Big waste of time. That's what I wanted to hear, Alan. So uh you uh were channeled in our meeting because I said, you know, I've been doing this now, uh, the toolbox for 18 years, but by the time I had enough, I guess if you will, people uh that were in our office uh to start doing strategic planning meetings. Uh it's been about uh uh you know, I was trying to figure that out. I think like nine years, not fully 10. And every time I have them, Alan's like, well, that's a stupid waste of time because nobody ever remembers it. So that first thing I think honestly that now your strategic planning meetings don't really include your employees. I only included uh the office staff and my tech advisory board. So my technicians out in the field were not there. Okay.

SPEAKER_04 3:25

Um representative sampling.

SPEAKER_02 3:27

I did. I took representative samples of the ones that I knew would say, Wow, that's a great idea, Chris. So that's what I got along the room, John. That's what I did. Nice. So we get them together, and our theme, one of the things that we do with all of our training is we always tell a story first to get people engaged, then deliver the message uh with the hook. And today, what we talked about because our word of the year, which I'll give to you in a minute, was Proctologist. No, it was do your damn job. Yeah, it was get back to work, you losers. No, no, you can't. Yeah. Oh, this is a good one. I'm glad you said that. So, what did we do?

Mount Everest Lessons And The Word Ascend

SPEAKER_02 4:02

We had a 20-minute video that was narrated by my general manager Kirk about Mount Everest and cresting Mount Everest. I will give you the short story. Do you know that you have to go up three other mountains and prove that you've done it before you can even attempt going to Mount Everest? You have to buy a license for $11,000 just for the privilege to go up there. Then you have to buy a Sherpa package, which of this is the best. It could be a $30,000 package, an $80,000 package, or a $150,000 package. And the $30,000 package says more risk. I was gonna say, I think that's one of those times where you don't want to skimp. You know what? You go with the highest bid on that one. Here's the other thing we learned about Mount Everest is that it takes uh about two to three months to get there, if you can. Only 6,600 people have ever gotten to the top. And on doing it, do you know that they have to go over to base camp? So first you have to land on an airport that is cut into the mountain, which is scary enough as it was in the video. I'm out. Oh yeah. And then you have to hike up to base camp, which takes eight to ten days where you get acclimated. Now, here's the thing that's interesting. I did not know this. Do you know they go up to camp one or and then they go up down, then they go back up to camp one, back down, up to camp two, back down again, and then go back up. Why? Because they've got to keep getting acclimated. Because the final steps at the peak of Mount Everest that they say uh the final the final summit, you have to take ten breaths for every step you take. Because your body is basically shutting down as you do this. Now that leads us to the question, John, why would you do that?

SPEAKER_01 5:43

You know, I've got a friend that's done it three times. Great guy, but a little bit off, right? I mean, you can't be normal and do that. You know, a lot of us have life to live. So um I don't have a strong enough why, Chris. I'm not in. I'm not in either.

SPEAKER_02 5:58

So we we laid that out, but what literally one of the two pictures we showed uh in the video that he put together were two dead bodies. I was gonna say frozen corpse. It was. Do you know why? Because you can't bring them back, you can't bring them down. You just put the flag over top of them and keep on walking.

SPEAKER_04 6:15

And so that you just give them a little nudge and they slide down.

SPEAKER_02 6:18

No, that's why I thought can't you just like you know use them like uh the grid and grid soul Christmas, just slide on the slate? So it's an amazing story when you talk about it. But what it did tell us about was teamwork, dedication, determination, having a goal. You don't have not only do you have to have the right tools, the right equipment, but you have to show the skills, and you've got to do a practice of those skills to do that. So our word of the year at the Trusted Toolbox is ascend.

SPEAKER_04 6:44

I was gonna say, how what does Mount Everest have to do with uh colonoscopy or the enema that you're giving your employees? Oh, yeah.

SPEAKER_02 6:50

So they all told me it was a great word, of course. Thank you, Alan. Johnson, uh and here's what I did. I said, listen, I've been doing this now for uh a little less than 10 years. And one of the one of the people that I were uh know quite a bit that you all know who is on my podcast way too often, uh that's you, Alan. Um and I said, he says there's no value in this. I said, you know what? I started looking at it and like, why do we do this? And so instead of me giving you a bunch of words, I'm gonna have you write one business goal and one personal goal that you want to achieve this year. And I don't care if it's with the trusted toolbox, I just want one. And so I made them go do one each, and then a skill they'll build, a habit they'll develop, and what they'll do to be a better teammate. Then what they didn't know is I made them go around the room and do it. I had tears in the room, Alan. Three different people broke down as they were giving their goals.

SPEAKER_04 7:49

Really?

SPEAKER_02 7:50

That's right. Because it was that visceral. How about that, Alan? How about that for strategic planning, buddy? Well, it's still a complete waste of time unless you follow up with it. All right, so here's what I did. I said, we are on the AI wave, people. We're never gonna be in front of it, but we're always gonna be behind it. It's just a matter of how far behind we are. So I told them what I took all their goal sheets, I've uploaded it to ChatGPT, and I have now created a spreadsheet so we can track them and track their progress towards them and go back and re-review that with them over the year.

SPEAKER_04 8:26

All right, all right, okay. Did I win? Yeah, we'll say. Well, maybe I'll put a little calendar reminder to just follow up and see. And you're like, what meeting? All right. What was it? There it is, everybody.

SPEAKER_02 8:37

The word of the year is ascend. And my goals for this year were not to lose weight. My personal goal was golf related. Thank you. Yep, I'll get my handicap down. All right,

Why Non-Food Franchises Beat Restaurants

SPEAKER_02 8:50

guys, we got John Austinson on, Fran Bridge Consulting. He is a repeat guest, but you'd have to go way back in the archives to find him. It was in 2022. He didn't even have his book published when he came and talked to us before. He is a fellow Atlantan. He has chosen not to come see us in person because he's too busy to come see us down here in the bar, and he was probably afraid he was gonna do a tiger thing and probably drive back and flip somebody over or kill himself. So we didn't want to do that either. So he's smart. So he is smart. He definitely is smart. I mean, he's got the uh he's got a lack of those accolades behind him, too. And um, the ink is it 500 or 5,000? 5,000. Nice. I like how you covered up the zero at the end. It's like ink 50 is what it looks like. Yeah, he's ink 50. He could be ink five. He may be ink five, everybody. John, welcome back to the show, man.

SPEAKER_01 9:37

How have you been? Hey, Chris, doing great. So many ways I can go with this conversation, but uh yeah, excited to be back with you. Your hair looks great. Um thank you. I just had it done. Yeah, it's been a fun couple of years. But yeah, I'd say AI would be our word for the year, and you know, certainly integrating it in the business, but it's also driving business. We've got so many people reaching out to us saying, hey, our job's insecure, we're being asked to do more with less, or I really don't want to be at the forefront of this AI revolution that I'm being asked to. I just want an understandable, tangible business. And so it's really a fascinating landscape out there, and we get to see it on the front lines of um, you know, a lot of folks in corporate America, a lot of folks with different backgrounds saying, Hey, maybe now's the time to step into business ownership into something that's tangible and real. So yeah, excited to be with you and happy to take the conversation wherever you like. Um we got to drop the name of his book because I love it.

SPEAKER_02 10:29

Let's do it. Yeah. Non-food franchising, which means do not buy a subway franchise, which means do not buy a food franchise. Anything with food, restaurants, no non-food franchising. That's the title of this episode.

SPEAKER_01 10:50

You know, you probably could have condensed it a little bit, but yeah, we have got we have got nothing against the food guys. We love them. One of the largest uh QSR CEOs is a good friend of mine. I was with him last weekend. Nothing against those guys, but they're my humble belief is they're easier ways to make money. You know, there are opportunities out there that may require fewer employees, less operating hours, uh, you know, maybe less susceptible to consumer whims, less capex. Um, you know, so so again, nothing against the food guys, but when I say the F-word franchise, people usually think food, and yet there's so many other industries out there.

SPEAKER_02 11:25

Yep, there there are so many, and I know we talked about this back in 2022. Don't forget to go check out those archived episodes, everybody. They're out there on your podcast player, but we're gonna kick we're gonna go back and refresh a little bit. So I I know you've you you had a background in that world before you started Fran Bridge, uh, and now you've been at Fran Bridge for over seven years.

SPEAKER_01 11:44

Yeah, great memory. So you know, spent many years in the corporate world, like so many out there, and uh you know, very thankful for the run. But stepped into franchising just about a decade ago and had the opportunity to lead Shelf Genie franchise system and support all of our franchisees across North America and really fell in love with the franchise model and just saw how all these diverse backgrounds could come together under a shared system of support. And uh long story short, fell in love with the model, went out, bought franchises myself. So I still own a handful of franchises on the franchisee side and started the consulting practice right about seven, eight years ago, and uh been able to help a couple hundred people step into business ownership, uh, which I'm really proud of. So uh love educating, love exposing people to what I feel is a better path to business ownership for many.

SPEAKER_02 12:27

All right, let's go explore this a little bit more. So you had said something, and we everybody wants to kind of kind of pulse on the economy. What's AI doing to me and is AI going to limit my eliminate my job? Have you seen that start to drive interest in the franchising uh business? And people are interested in saying I'm ready to step out. You said it, but tell us a little bit more about how detailed it is.

SPEAKER_01 12:47

Yeah, 100%. We all read the articles in the Wall Street Journal literally almost every day about AI displacing jobs, and you've got CEOs of Fortune 1000 companies becoming more and more bold in how they're talking about the future for their workforce. And uh, you know, it we've seen a lot of interest even prior to the AI wave. I think coming out of COVID, a lot of people had questioned the path they're on. They said maybe now's the time to step out. So everyone has their own incremental situation, but um, you know, in timing, but I it's absolutely driving people. And whether they say a point blank, which many of them do, uh others kind of hint around it, others are just tired of traveling. They want to be at home with their family, or they've done well, but they've helped build someone else's empire to be cliche, and they're now ready to build their own and uh you know, show their kids what it's like a million-dollar idea, and they say maybe a franchise having the training wheels and that system of support can help me get in the game and help me build that platform for the next season. No one down the road. I could always buy businesses, I could always start businesses, but why don't we start with the franchise and really kind of um you know get our C legs and business ownership?

Picking The Right Brand And Expectations

SPEAKER_02 13:55

So the marriage of franchisee to franchise or such a complicated one, uh, as we've talked to so many people on this and talking about that. As you help broker that marriage, as it were, uh, what do you coach your franchisee potential? Um, what do they need to do? What what what are the common misconceptions that they have going into this?

SPEAKER_01 14:15

Yeah, you know, franchising is like every other industry out there in that you've got thousands of players and some are really strong and provide great support and some don't. So, you know, it is almost like in marriage, you know, you want to pick the right mate out of the gate. Um, and so some of the things we look at, I mean, candidly, if a franchise is a household name, you know, it's never going to uh, you know, there's not going to be open territory, most likely, in your market. And I mean, some of these businesses say insulation, that's a $50 billion a year industry. It's never going to be a household name, right? And yet they're franchises in that space. So I think end of the day, it's all those other things that matter that come with the franchise outside of the brand. And so it's really having a home office team of support, someone that you want to go to uh bat with. Um, and I encourage them, you know, the these are oftentimes more emerging brands. You know, they haven't been around forever. That's why they still have territory for you to buy into. And so we like to see on that leadership team not only industry experience, but also franchise experience. We want to see that they brought in talent around them to support the franchisees, people that have been there, done that, supported successful franchisees in their past. So there's a little bit of art, a little bit of science to it all. Um, you know, we're looking at the financial model, we're looking at the competitive advantages, we're looking at what are current franchisees and the system saying about their experience. Um, and then, you know, what's really interesting, Chris, is some people we work with say, hey, we want to be passionate about the business. Others say, hey, I'll sell whatever if I can make a million bucks a year, right? I'll be known as the porta potty king at the cocktail party if I can make a million bucks a year, right? Other people say, no, that's not me. So, you know, we try to understand where they're coming from, what matters most to them, and then match them up with the top opportunities in their market.

SPEAKER_02 15:54

That's so uh interesting, the porta-potty king.

SPEAKER_04 15:57

Yeah. Well, he, I mean, we we've had a poop scoop franchise franchisee or franchise or yeah, right.

SPEAKER_02 16:04

Uh he turned his franchise into a franchise system. Yeah, it's a high margin business right there. High margin.

SPEAKER_04 16:13

There's just so you know, and the and the unfortunate thing was, and uh, you know, he's probably not listening, he didn't have fun with it. No on the pod. I mean, Chris and I were just like, you know, 12-year-olds, we were ready with the jokes, and there wasn't there was no joy in that in the we were 12-year-old boy humor and he wasn't digging it.

SPEAKER_02 16:32

No, but uh, but it's interesting as you as you uh because you said I love to educate, and so when somebody comes to your door and starts talking, you know, hey, I'm passing it so you got you get him through those questions, and you're like, hey, no, I gotta be passionate about no, I want to make a million dollars. I mean, uh, and and that one right there would probably be my flag. I'd go, hey, bro, you know, let's slow your roll here. You're not gonna supplant your income in a year. Uh, it's still a startup. What have you found have been the biggest misconceptions that people come out doing? Is it the money? Is it the work that they have to put in?

SPEAKER_01 17:03

Yeah, money, and sometimes that goes both ways. Some say, hey, I don't expect I don't expect to break even until year three. I'm like, no, no. In in most models, you should break even within six months, maybe 12 months at most. Um, you know, and when I by break even, I mean having a monthly PL that's positive, right? You're in the black, you get the oxygen or profitability. Um, I'd say a misconception is that the franchise is going to run itself. I tell people that, hey, if it was easy, everybody would be doing it. There's a reason why you have the potential for outsized returns. It's because it takes some degree of effort. It's not just a real estate syndication or a, you know, a fund that you invest in. Instead, you have to put some legwork in, even if you start with an operator in place. And about half of those that we work with do put an operator in place day one that's going to run the day-to-day. Um, and I never sugarcoat it with people. It takes work still. If you don't have the right operator, you're going to find yourself leaning in a lot. Now, if you do have the right operator and you've got a good franchiser on the sideline supporting them, it can be pretty hands-off. I mean, I know from firsthand experience and from countless client case studies, but it comes down to having a good person in that seat.

SPEAKER_04 18:07

But that's kind of a mistake, don't you think? I mean, you've got to know the business. And who, no matter who you hire, they're not going to care as much as you.

SPEAKER_01 18:16

Yeah. No one's going to run it like the guy with the skin in the game. So, no, absolutely. You've got to, especially early on, you know, m manage them closely. But sometimes they do allow that operator to have skin in the game. And so whether it's, you know, they earn sweat equity, whether they put in a little bit of capital themselves, which is great. You know, some people are very open to opening up the cap table. Others say, hey, I'd rather incentivize in a similar way to equity, but not actually, you know, and so it's all about setting the right expectations with the candidate uh that you bring in, but then also setting the compensation plan. And if it's the right person and they're hungry, they can work, just like any any role out there. But if they're not hungry, if they're not self-motivated, you're gonna be leaning in until you find the right person.

Operators Skin In Game And Scaling Stories

SPEAKER_02 18:58

So I I'm I'm on the uh Alan side of this equation because when I started my business, I I was, as I said this morning too, when I first opened my business, I was the person answering the phones, I was the scheduler, I was the estimator, I was the lead technician, I was the helper, I was the billing person, I was the invoicer and the chief marketing officer, among other that. Did I have enough going on? But I felt like I had to know my business and from the ground up. Um, now, you know, after 18 years, I go, I get where you don't probably didn't need to put that sweat in that I did in the beginning, but I felt like that's the only way I could have really understood it. When you grab a corporate exec who says, Hey, John, I I'm done. I'm done with this. I want to stop traveling. Um, I'm just gonna I'm gonna buy a franchise, sit back, and watch it just print money. Because that's one of the things I have seen where people fail is that they feel like if I buy into a franchise, I don't have to do any work. I don't have to understand the systems that or the what's going on in the day-to-day work. Have you found that you can be successful that way, but but you're still telling them, hey, I gotta you gotta get back to work?

SPEAKER_01 20:01

Yeah, absolutely absolutely. No, I think um every situation is so different, right? And part of it depends on the franchise model and how much support it's providing. I mean, some of them do the invoicing, some of them do answer the call, some of them are driving all the appointments, right? There's so you have to understand what roles are actually needed. And yeah, I firmly believe no one's gonna run it like the guy with the skin in the game. But sometimes the guy with the skin in the game is the doctor, and the doctor is a physician, and he's got a lot of time, you know, doesn't have a lot of bandwidth, and he probably wouldn't be a great business owner to begin with, right? But instead, he brings in his brother-in-law or someone that, you know, the son of a colleague of his who's highly motivated, sets him up for success and allows the franchise or to kind of, I won't say manage them, but be the go-to for a lot of the daily questions. So again, I have a hard time with generalizations because I do see a lot and I totally agree with you guys that in a lot of cases, you know, someone wouldn't be set up for success with an operator. However, I see a bunch of case studies of clients of mine where they made it work by having the right person in that seat. And oftentimes they have a history with that person. I'd say that's a little hack as well, someone that that's earned their trust. I think of my client Nathan. I mean, this is kind of a further down the line example, but he's the largest franchisee of two men in a truck moving service. He operates in about 12 markets, started out with one over time, bought other franchisees in the systems, does about 45 million a year in revenue. Well, he's built up this great organization of young folks he's met at his church or in his community. A lot of them have earned his trust. And he comes to me every year or two and says, John, I'm ready to put them in a position of leadership. What franchises do you like for me to offer to them? He'll open up the cap table, give them a good chunk, say, hey, go make us proud. And has had tremendous success doing that. But again, they had earned his trust already. So they he didn't just find them, you know, on uh uh on e hire or something like that.

SPEAKER_02 21:49

Yeah, right. No, that's a great one, too. That's impressive. That is very impressive. That guy, wow, what a what a great deal.

SPEAKER_04 21:55

All right. So I I I got a question. We

Finding A Consultant And Validating Franchises

SPEAKER_04 21:57

we we I I've I've known a number of people who think Thought about getting a franchise, and the first thing they do is get online, and you know, there's huge uh brokerages, consulting companies, whatever you want to call them out there that uh own the Google space. And how how do people find you as a referral? And what is the the unique experience they're gonna get working with you?

SPEAKER_01 22:20

Yeah, absolutely. No, if you go on Google, I mean you're gonna see every company putting their best foot forward, right? And there's a lot of noise. And even if you see a top 100 franchise list, most of the companies have actually paid to be on that list, right? It's a PR move for them. So just a lot of noise. You know, it's entirely free to work with us. So if you were going to buy a house, you'd want to use a real estate broker in most cases, right? And someone that knows that area, that has relationships, that may even be able to see like behind the scenes of you know deals before they come online. Um and that's the role that we play. Our clients never pay us a nickel. We simply get a referral fee from the brands. It's a sales and marketing cost for them. We're part of the largest franchise network in the country, over 600 companies that we work with that are looking to expand. So um, no, the way that we differentiate, I think, is just the relational side of it. Um, you know, I've been doing this for a while. I've been very blessed to build up a good reputation within the industry. I've got the relationships with all the franchise sales organizations, you know, at the very top. I've know most of the brands. Um, and so all oftentimes I'm leveraging that. And so I'm calling up all the time franchise saying, hey, I know you've got three candidates in the pipeline for South Denver. Here's why my client should move to the front of the line. And oftentimes they want me to continue sending them great folks, and so they'll uh give me the benefit of the doubt there. Also, just seeing behind the scenes, you know, I've been a franchisor, I'm a multi-brand franchisee. So I think having that experience that I bring to the table, just to again not sugarcoat it, because you'll hear a lot of messages out there. Like if you put an operator in place, they call it semi-involved or semi-passive. I call it, or I'm sorry, semi-absentee or semi-passive, I call it semi-involved. I think it you've got to go in eyes wide open. You know, we make sure our clients get all the franchisee validation calls ahead of time. Um, you know, and really go in eyes wide open to the opportunity to make sure it's a good fit for them. And where I get my validation is when they come back and they buy additional locations, they come back and uh buy additional brands. That happens all the time. I call it franchise stacking, or they come back and refer their brother to me. Um, that's what keeps me going.

SPEAKER_04 24:19

I think it's a huge differentiator that you were a principal or a a franchise or and you own franchises because so many um franchise consultants brokers that I know or know of, it's a franchise itself, and they're they've never been in business other than this one. And so you kind of have the ability to vet better, in my opinion, just because you've had to make that exact decision on do I want to put my money with this horse, or um, does this does this organization have the support that I would want if I were a franchisee? And so my assumption is is you're you're not going to place your people with uh any of these franchises just to make a buck um that you're not 100% confident in the direction it's going.

SPEAKER_01 25:10

Absolutely. No, we're playing the long game here, and you know, I'd love to say our record is perfect. It's not, but it's pretty darn good, and I'd put it up against just about anyone else out there. Um, you know, and I share perspectives with our clients around. I had, as an example, I had 10 clients buy into a franchise a couple of years ago, uh gutter installation business. Eight of them did really well. Two of them uh had unique situations, and I think they provide learnings. In one case, um, he was a doctor who put an operator in place, the operator left and he decided I don't have the energy or the stamina to go find someone else and you know kind of help train them up. And so he said, I'm just gonna essentially hand the keys back over. He may have sold at a loss. In the other case, this guy was a marketing guy, thought he would do really well uh in a service-based business, but franchising he he was not the right fit for him. He thought he was the smartest guy in the room, no matter what room he was in. So he came in and didn't follow the system. And it sounds so cliche, but I tell my clients there's a reason why you're getting into a franchise, follow the system. Now, a good franchise is always going to allow you to you know test different things. That's where the best innovation comes from. But end of the day, if you're not following the system and you're not someone you know that people want to work for or work with, franchising is probably not your game.

SPEAKER_02 26:31

No. Right.

SPEAKER_01 26:33

Well, why are you looking at me?

SPEAKER_04 26:35

No, no, that's why I didn't think you would be a horrible franchise.

SPEAKER_02 26:39

I would say it would be a horrible Chris.

SPEAKER_04 26:40

I'd be terrible.

SPEAKER_02 26:41

First of all, smartest guy in the room.

SPEAKER_04 26:42

Yes, check the box. I know I am. Um it is a problem in franchising. I mean, it's the challenge, I guess. I'll say it's the challenge because if you have the money to be able to buy a franchise, you've obviously been successful. You're you're the one making the decisions. And so everybody comes in and you know, they're feeling their oats, and yeah, yeah, yeah, yeah, I'll follow the model. But then the marketing guy's like, I don't like your marketing, or the ops guy's like, I don't know, you know, and they they try to rewrite it from day one before they even try the model. And it happens every single time.

SPEAKER_01 27:15

And what's interesting is what I found is a we work with a lot of business owners. They come to us and say, hey, you know, we're we're looking to build our portfolio, we're looking for an adjacent business, and I can give you examples of ones, the placements we've done there, but or I'm looking at diversify my holdings. A lot of business owners, you know, would not be great franchisees, but the majority of them, I would say, would be great franchisees because they appreciate all the work that's been done. They they like the fact they can step into a technology stack day one, that marketing's already been somewhat figured out. They don't have to learn the hard way on trial and error. Um, you know, they've got a lot of data to play with. Um, they love that they're not by themselves. I mean, they've got a community of other franchisees. It's almost like a mastermind. And again, I hate generalizations, not every franchise is created equal. But in those strong franchises, you know, you can really benefit from having a sea of other people living the same thing day in, day out, exchanging best practices. So a lot of them really appreciate the franchise model for that second or third rodeo, is what we found.

SPEAKER_02 28:13

Yeah, I can see that that helps a lot because for me, I'm in a mastermind group, and you gotta flock that you immediately get into of people who are sharing the same pains and tribulations that you have, and all but in different markets, but you're allowed to talk to people just like we were talking as we got started in the day on the pod. It's just, you know, hey, how's your business? How's my business? Da-da-da-da. So now I want to switch over to the franchise side.

Emerging Franchise Ideas Beyond The Obvious

SPEAKER_02 28:37

Which one should I buy? No, let's go to the quick. So you if you go out there and vet these people, you go out there and you talk to them, like you mentioned, you've got a lot of relationships. What are some of the cool ones that you're seeing? Because they're obviously emerging, so we probably haven't heard of them yet.

SPEAKER_01 28:52

Yeah, I'll just kind of give you a lay of the land and you know, just some different example type opportunities. So we're seeing a lot of interest in things like home services and property services, which I know you would have a uh you know keen eye on, Chris. Uh, and within that, it's everything from cabinets to flooring to I've done several pool cleaning deals in the last couple of months. Um, you know, things that are you know somewhat needs-based in a lot of cases. Uh, you know, is one of the ones I'm invested in is asphalt paving and line striping. I mean, people love those non-sexy things. I've got another one that provides temporary walls around containment walls around renovation projects and construction sites, certainly restoration um type work. Um, you know, health, and we see a lot of private equity getting involved in home services too. That's a big area. Um, health and wellness, you know, certainly businesses that deal with longevity or uh different modalities around recovery. Um, anything senior related is really big right now, not just in-home senior care, but there's other ways to play the senior space, like senior fitness, whether it be a standalone gym that caters to that population. Or, you know, we had some clients in Florida recently get into one that provides stretching and fitness services for uh senior facilities. So they'll go around, you know, several times a week to different facilities. Um, you know, anything related to kids or to pets, you know, within the kids space. We've had so many clients do well with like youth soccer or tutoring, or um there's a great one now. It's a driving school, you know, teen driving school. So really the only player out there in that space that's a franchise, another one that provides music lessons. So it's almost like you want one of these or one of these, you know, all sorts of options. Um, you know, I'd say franchising tends to be a little more B2C oriented just from a volume of opportunity standpoint. Uh, but at any given time, there's some good ones in the B2B services space. We've had clients get into uh freight brokerage, into uh insurance adjusting, um, into business coaching, uh cost mitigation for small and medium-sized companies. Um, you know, and then there are ones, again, just those non-I I joke that non-sexy is the new sexy when it comes to the type of business ownership. And so it's things like industrial hoses or um uh, you know, environmental testing, you know, after restoration work's been done. All these niches. People love niches, is what I found. We're not showing home cleaning, we're not showing mosquito companies. We don't need any more of those, right? We need companies that specialize in the niches that differentiate themselves, and that's where we like to play.

SPEAKER_04 31:28

It it does seem like franchises come in waves. I mean, there was way back the the yogurt wave of and then there was the burger crazy. I mean, when I first moved to Atlanta, you you couldn't find a burger. And now within 10 minutes of your house here, Chris, I mean, how many different high-end burger franchises are there? They just put a Whataburger from Texas here in Atlanta in in Johns Creek. Yeah, and then uh, I don't know, two years ago in commercial real estate, all of a sudden we had a number of different franchise organizations reach out because they were looking for uh they were mental health franchises. And it kind of seems like it seems like somebody gets a good one and then they just get duplicated really quick. And uh, I'm like, man, I I don't know. That's like kill the uh goose that lay the golden egg real quick in franchising.

What Great Franchisors Do Differently

SPEAKER_02 32:18

Well, you brought up the F-word, uh food. Food. That's why we're we're the NF word, we're anti-food, we're non-food. But it's interesting, you actually, John, you hit a couple of uh things that I was told before I started too is that you will find the riches in the non-sexy. Um, and you know, I've got a number of guys who started their own business, not in franchises, but you named a number of ones where I think a lot of people go, asphalt paving, striping. I'm like, well, as a matter of fact, I know a friend of mine who bought into a franchise here in Atlanta in striping. I don't know how he's doing, but uh he's a very sharp dude. He can, I'm sure he's gonna figure it out.

SPEAKER_00 32:56

There's a lot of parking lots out there.

SPEAKER_02 32:58

There are a lot of parking lots that are depth desperately in need of repair and maintenance. You talked about home services, I think excuse me, I get the hiccups going, Alan. Why is that? Uh I'm getting nervous. What? Uh because the answer I expected.

SPEAKER_03 33:15

Oh, okay.

SPEAKER_02 33:17

So I I just, you know, when you look back on some of the uh you talked about them already. That everything you just named cannot be replaced by AI. You can't. You you can't just automatically go out there and asphalt pave something. You can't go out there and pick up dogs poop with AI. Can you? I I don't think so. Okay. Maybe robots. Robot poop kitters. That would be a good franchise. You know, I think if we can come up with a laser poop eliminator, that's what we could do. It's just sit it out back. Unfortunately, what probably go wrong is the kids go running out back, they maybe didn't clean up very well, and next thing you know, their asses are getting fried. Woo! So bad idea there, people. We're on to good ideas. So John, you've seen the impetus, and you you mentioned a number of different uh areas there. As you as you work with clients and you work on that marriage, what makes a good franchise operator? Not not the franchisee, but the franchise. You talked about that a couple of times, but what makes them different? What makes them better?

SPEAKER_01 34:15

Yeah, you know, I think understanding that they're serving the the franchisee, right? I mean, um, you know, if they do it well, they're going to build up a company, they'll probably sell the private equity one day, have a nice exit. But you know, I think I I counsel a lot of emerging franchise ours that, hey, don't get ahead of yourself. Don't bring on, you know, don't the first people to say, hey, we're willing to sign with you, don't bring them on. Make sure you pick the right franchisees out of the gate. They're going to come in, set the tone, set the culture, set your item 19, which is the financial representation. Uh, be selective. People want franchises that are selective. They don't want one, they'll just sign anyone. So um, you know, I get the right people in and then uh, you know, staff up and set the right expectations. I think where franchisors sometimes fall down as they lead people to believe they're going to provide a certain level of support or they're gonna put certain things in place in a given time frame and then they don't follow through on that. And that's where, you know, when I was a franchise or if we were switching marketing vendors or I wanted everyone to try a new program with our call center, I'd better first test that with a couple of franchisees that were influential in the system, get them on board, get them supporting the idea. If I just rolled something out, all of a sudden I'd have folks with pitchforks at my door knocking on the door. And all of a sudden, it's like it's like it keeps you in check. There's a check and balance here because there are a lot of franchisees. There's only one of you. And so um, you know, end of the day, a good franchise world wants to keep the franchisees happy. They want to continue innovating and bringing new things to the market. Um, what's neat is when you get a large enough coverage presence across the country, you can start building in national accounts. Um, we see a lot of service-based franchises now that have enough coverage. They're saying, hey, let's go after some of those large retailers or those large property management companies and you know, build some business that our franchisees can draft off of. So um some of it depends on the industry, but end of the day, it's it's putting franchisees first. And I always love it. Oftentimes the franchise orders are former former franchisee, or maybe their leadership team consists of former franchisees. I think that's a great idea when they do that.

SPEAKER_02 36:17

But that's great advice that I think a lot of people miss. And that's where you know, Alan hit on this. I mean, obviously, you've been around, you've you've you've been in the franchising world, you know how it works, you know where the where the pitfalls are, maybe you know where the bodies are buried. But finding people who are doing this, uh, it I think it's just it's just really cool. Let's

The Book Plus ETA Versus Franchising

SPEAKER_02 36:34

plug your book one more time, non-food franchising. Um, what's in the book? What can we expect to get when we uh read that book?

SPEAKER_01 36:40

Yeah, it's it's 90 pages. It came out about three years ago. We've sold thousands of copies, but I've given away even more and would love to share a free downloadable copy with all of your listeners. You know, if they come out to our website for Ambridge Consulting.com, uh, we'll reach out, share links to the book. Um, but no, 90 pages. In the book, I talk about, you know, all things franchising. You know, certainly share case studies. We talk about industries, we talk about the legal side of how to read the FTD, we talk about the funding options that you have. You know, but then I also have a chapter that compares franchising versus startups. What are the trade-offs? Franchising versus entrepreneurship through acquisition, ETA. That's a popular idea on the market. Um, I've got four different Harvard NBA clients right now working with all have been going down the ETA path for several years and finally came around and said, Hey, I'm ready to get in the game. Let's get a franchise going. I'll acquire a business later. And so we talk about all those dynamics um in about 90 pages. Not a lot of fluff, straight to the point.

SPEAKER_02 37:33

That, I mean, honestly, everything you just said in 90 pages, uh, that's an easy read and a hard read, but at the same time, if you're really reflecting on it. Let's talk about that uh that concept, entrepreneurship through acquisition and why it's so hard for those guys to get into it.

SPEAKER_01 37:49

Yeah, I got a note literally an hour ago from another guy. He's been looking for three years. He's like, hey, let's look at franchising. I've been looking for a company for three years. Buying an existing business can be a great proposition. You know, it can also be a bad proposition in some cases, but it takes a long time in most cases. I mean, you're oftentimes spending several years, you're you know, doing due diligence, the deal doesn't shake out, someone outbids you, the guy pulls the business off the market. It takes a long time, and there are a lot of people looking. So I encourage people that's time you could spend building a business. That's one of the things I love about franchising, allows you to get in the game, build a platform. You can still acquire a business down the road. Um, you can and a lot of people say, Can I buy an existing franchise? And we'll do some of those resale deals, but usually there aren't that many good ones on the market because the good ones get bought by other franchisees in the system. They get first line of sight, that internal MA as I call it. So um, you know, once you're in a system, you can do what my two-man truck client did, you know, buy other franchisees over time, kind of roll it, roll them up that way. Um, and buying an existing business, it does carry risk. Yeah, there may be revenue day one, there may be a team in place, there's market awareness. Anytime that you inherit someone else's team, there's gonna be a change in culture. When you have a change in ownership, you're gonna lose some key employees in almost every situation, maybe key customers. And here you paid a premium for the business, assuming everything is going to stay the same. So, you know, it may take a little more work with a franchise to stand one up there out of the gate, but I think the long-term play makes a lot more sense in a lot of cases.

SPEAKER_04 39:19

Boy, he just made me think of a really good due diligence question, which is have any of your franchisees been bought out by other franchisees? I mean, that's the ultimate validation.

SPEAKER_02 39:29

It is, right? Yeah, yeah, you're right.

SPEAKER_04 39:32

That's yeah, brilliant.

SPEAKER_02 39:34

So John had a great insight. That's why you bring great people on there. And he has better hair than we do. He's bringing the heat man, Fran Bride, Fran Bridge Consulting. John, what else haven't we talked about? I'm gonna do that AI question. Have you you know that by the way? You go in there and go, what questions haven't I asked you about why my business is sucking so bad? What does it say? Uh, I can't tell you. It might it might be you, the guy typing the I'm like, you know, I don't like you anymore. I'm gonna

Costs Funding Options And Closing Takeaways

SPEAKER_02 40:01

try a different AI. I did, I did. I went another AI. You're fine.

SPEAKER_01 40:05

I think I think the only thing we haven't really touched on, which I'll hit on really quickly because we get this question a lot, is hey, how do I pay for this? How much do they cost, right? And end of the day, I mean, I've got a lot of clients that are getting into things. They're seven-figure investments. I had a client recently buy 10 Sky Zones, those are about $4 million each. That was a big deal. Most people, though, when you look at the franchise feed, startup costs, and several months of working capital, you're all in the investment range. Oftentimes you're in the $150,000 to $300,000 range. You know, if it's a service-based business, if it's brick and mortar, maybe four or five hundred thousand. Um, you know, but SBA loans are incredibly common. Banks like lending to franchises. Uh, retirement rollovers are popular. It's called a ROBS program. You can roll over an old 401k, purchase the business that way. So there are a lot of ways to get involved, certainly HELOCs as well. Um, so always work with our clients on those different options. We've got partners to help them uh with the funding as well.

SPEAKER_02 40:57

Honestly, John had a better answer than ChatGPT did in AI. Um, that was a great question. You're right. We didn't ask that because I think one of the things that really keeps people back are you know, people are afraid to give them the numbers. Well, how much is it really going to cost for me to do it? And you know, well, you can't answer it.

SPEAKER_04 41:13

You you can't. I mean, there's the range in the FDD. Yeah. But it sounds like you're steering a lot of people towards non-brick and mortar, which you know, the cost to entry is much lower. That that is a downside on the on the restaurant piece, is I mean, you spend a ton of money before you have an opportunity to make any of it back.

SPEAKER_01 41:33

Yeah, probably two-thirds of those that we work with are going with non-brick and mortar.

SPEAKER_02 41:38

Two-thirds, interesting. Yeah, no, I mean you're right. Because uh, because the the rest of it, you know, is trying to get back, like you said, you're trying to get back to break-even, showing a profit, moving the profit, and then start working your way up the mountain. Because whether you franchise or go on your own, you still got to be the guy who's making it happen. And even if you have in your Europe, you said I think semi-involved owner. I like that phrase, as opposed to passive owner. Yeah, you've got to stay involved because that's the only way it works. You got to show them the skin, you gotta show them where to go, you gotta be able to show them what's happening. So that's great stuff. All right, now we're coming to the end of the podcast. We got to go one more time. So, John, a repeat guest. I know. Huh? Pretty exciting. Back in the old days. Back in the old, old days when we were in the office and not using near as cool equipment as we are now, Alan. No, but still drinking that same bourbon. John, how does everybody find you besides Franbridge Consulting.com?

SPEAKER_01 42:31

Yeah, certainly come out to our website. Uh, sure, the email address will uh send you a link to my calendar as well as uh to our book. Uh, but follow me on LinkedIn. I put a lot of content out there uh on a regular basis, and uh, we get a lot of good feedback there. So, yeah, just my personal name, John Austinson, uh, there on LinkedIn would be the best place.

SPEAKER_02 42:49

Let's do it, guys. He's willing to put his name out there, willing to talk to you guys. I would say take this guy up. He's definitely a smart dude.

SPEAKER_04 42:56

Download that book. Uh, I mean, that chapter on uh uh you know franchise versus startup versus acquisition just sounds really good.

SPEAKER_02 43:04

Yeah, you can't chat GPT your way to that one. That's like going back to uh uh, you know, I looked it up on YouTube. I can change the toilet. No, you gotta go out and read this book, man. The guy knows it, been there, done it. Great to have him back on. John, it's been awesome, man. Thanks so much for coming back on the podcast. For the rest of us, keep working hard, man. And you know what? One of the things, even if you got your own business, or maybe you're still thinking about one, if you got your own another strategy that we didn't talk about, you could still you could have one by one. Nothing wrong with that. So call John, let him talk it up, talk you up, figure it out what's going on. Till next week, man. We got to keep rolling, we got to keep making money. We got to go out there and ascend the mountain for strategic planning brought to you by Chris. Thank you. Suck it, Alan. Cheers, everybody. Thank you for listening to this episode of the Small Business Safari. Remember, your positive attitude will help you achieve that higher altitude you're looking for in a wild world of small business ownership. And until next time. Make it a great day.