The Multifamily Real Estate Experiment Podcast

MFREE 115 Trailer # 3 with Jon Ostenson : What due diligence separates smart investors from hopeful buyers?

Shelon Hutchinson Season 3 Episode 115

Aloha, It’s Shelon "Hutch" Hutchinson here! If you’re enjoying 'The Multifamily Real Estate Experiment' podcast, please like, comment, and share our episodes to help us reach and inspire more people. Thank you for your support!

Not every franchise is built to last. In this segment, Jon Ostenson unpacks how investors can avoid being blindsided by failing concepts, trendy ideas, or undercapitalized franchise groups.

He explains why due diligence is everything, how to filter out the noise, and what real-world data tells you before you ever sign a check. It's not about chasing what’s hot. It’s about investing in industries where consumer behavior stays steady and predictable.

Business ownership is never guaranteed, but it shouldn’t be blind either. With the right filters and prep, you can take calculated risks that stack the odds in your favor.

Frozen yogurt might’ve faded, but your strategy doesn’t have to.

 #FranchiseInvesting #SmartRiskTaking #DueDiligenceMatters

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hutch@hsquaredcapital.com

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Track 1:

So how do we ensure that we are buffered against, franchise, selling, I mean selling off all the location or closing down the mud altogether? Yeah. Again, I think a lot of those examples would be in the food space. Not all, but I'd say the majority. And that's where a good example, frozen yogurt was big until it wasn't, right. That's where I like some of these industries where consumer whims don't change. Now, every now and then you'll have a situation where, something went wrong with the franchise or maybe they weren't well capitalized or did something, that hurts the business model. That's why, the due diligence on the front end is important. Nothing in life is a sure thing, right? End of the day, this is business and business isn't for the faint of heart, but if you go into it, eyes wide open, that's what I love about our exploration processes. The best indicator of future success is the past experience, The past historical results. You're able to get a lot of data, talk to other franchisees in the system before you ever buy in to hear about their experience. We try to, prepare people as well as possible going into it, to make it the most, calculated risk possible because the vast majority of franchises, end up doing well. We try to avoid the pitfalls, when you have a couple thousand franchises. There's gonna be a few that get the headlines that didn't do well, which is sad and it breaks my heart. Fortunately we've had a pretty good track record and try to set our clients up for success.