October 7, 2025 • 28 mins
Jon is a top Franchise Consultant, investor, author, and speaker specializing in non-food franchising. As CEO of FranBridge Consulting, he draws on his experience as a former Inc. 500 franchise system president and multi-brand franchisee to help clients explore business ownership. Through FranBridge, Jon connects entrepreneurs with over 600 high-growth non-food franchise opportunities, providing expert guidance throughout the process.
Previously, Jon served as President of ShelfGenie, a national franchise with 200 locations, and was Vice President of Sales at Carter’s Inc., where he managed over $350 million in annual sales. He began his career as a Consultant with Accenture, working internationally. He is also the author of Non-Food Franchising and a recognized thought leader in the franchise and investment space.
Jon earned a BBA in Finance and an MBA from the University of Georgia and was named to UGA’s “40 Under 40” list in 2014. He lives in the Atlanta area with his wife and three children and serves on the boards of Growing Leaders, Inc. and the Entrepreneur’s Organization while mentoring through various nonprofits.
During the show we discussed:
- Why focus on non-food franchises
- Why non-food often beats food franchising
- Helping clients discover unexpected franchise options
- What it’s like to work with FranBridge Consulting
- Finding the right franchise fit
- Typical franchise investment range
- Common funding options (SBA, retirement, etc.)
- Why franchises earn 1.5X higher exit multiples
- Balancing risk vs. return in franchising
- Owner-operator vs. semi-absentee models
- Support systems from franchise partners
- Common franchising misconceptions
- Traits of successful franchise owners
Resources:
https://franbridgeconsulting.com/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we're talking about a topic we've never
talked about before.
It's probably an easier path to business ownership,
(00:43):
which is franchising.
Specifically, we're really talking about non-food franchising,
which we've never talked about here on the
show.
And I think this is very, very, very,
very valuable because it is well known that
it is easier to take an existing model
or an existing business and go from there
than try to launch one from scratch.
And I think if you're watching this, you
may be somebody trying to launch a business,
(01:04):
and we're gonna give you an easier path
to success than being able to try to
do that on your own.
And to have this conversation with us today
is John Austinson.
Now, John is a top franchise consultant, investor,
author, and speaker specializing in non-food franchising.
Now, the CEO of FranBridge Consulting, he draws
on his experience as a former Inc.
(01:25):
500 franchise system president and multi-brand franchisee
to help clients explore business ownership.
Now, through FranBridge, John connects entrepreneurs with over
600 different high-growth non-food franchising opportunities.
That's like a tongue twister, by the way,
non-food franchising.
Okay, so non-food franchising opportunities, providing expert
guidance throughout the process.
(01:46):
Previously, he served as the president of Shelf
Genie, a national franchise with over 200 different
locations and was vice president of sales at
Carter's Inc.
as well.
Now, he's managed over $350 million in annual
sales there.
So, needless to say, he's got a ton
of experience in this.
And he began his career as a consultant
and at Atkinshire working internationally.
(02:08):
He's also the author of Non-Food Franchising,
a recognized thought leader in the franchise investment
space.
John earned a BBA in finance and an
MBA from the University of Georgia and was
named UGA's 40 Under 40 list in 2014.
And he lives in Atlanta area with his
wife and three children and serves as the
board on the board of Growing Leaders Inc.
(02:28):
as well and the entrepreneurs organization while mentoring
through various nonprofits.
John, you've done a lot of cool stuff.
Welcome, thanks for joining us today.
Thanks for having me.
That's the longest intro I've had in a
long time.
So, I'm not sure where you found all
that.
It's hard to cut it even out because
when it comes to franchising, I don't think
I've ever met somebody that has more experience,
not just in offering franchising, but you lift
(02:50):
it multiple different ways to the tune of
hundreds of millions of dollars you're dealing with.
And yeah, to be correct, so the hundreds
of millions was when I was in the
corporate world, but no, it had a very
large bank of business and P&L on
the franchise side is Shelf Genie.
And really that experience about eight, nine years
ago, it changed everything for me.
So, like so many of your listeners, I
spent many years in the corporate world and
(03:11):
had a great run and very thankful for
it, but I had that desire to do
something a little more entrepreneurial and was very
fortunate to get the opportunity at Shelf Genie
to come in and run our home office
and support all these franchisees.
And that really caused me to fall in
love with the franchise model.
I just saw how so many different backgrounds
could get plugged into business ownership through a
shared system and a shared platform.
And so, yeah, long story short, since then
(03:32):
I've acquired franchises myself on the franchisee side
and I started the consulting practice about six,
seven years ago and love helping others do
the same.
So what do you think between building or
buying a business versus franchising?
What's the benefit of franchising?
Absolutely.
So I do get that question off ETA,
Entrepreneurship Through Acquisition is a big thing out
there and everyone's out there looking.
(03:53):
There's a lot of content around that.
That can be a great proposition, but here
are the case studies that I hear every
single day, multiple times a day.
People come to me and say, hey, John,
we've been looking for an existing business for
three years, four years, five years.
We've been out there and we've been under
LOI multiple times, due diligence fell through or
something couldn't come to terms.
And then they come to me and say,
(04:15):
what about franchising?
And maybe that makes sense.
I hadn't thought about it previously or I
associated it with just fast food.
And one thing I point out to them
there's risk to anything in business, but with
an existing business, you are inheriting someone else's
customer base, someone else's team.
And whenever that happens, there could be some
changes versus what you anticipated.
So you paid a premium for the business
(04:35):
and thinking everything was going to stay the
same.
And there can definitely be good opportunities out
there, but oftentimes people don't kind of think
about the risk associated on that side.
And then they come to franchising and say,
wait a minute, so it's a proven model.
I get to pick my team.
I get to put my thumbprints on the
business from day one.
And I get a playbook.
I get to go, there's already product market
fit established.
(04:55):
It's all about going out and executing.
And one thing that oftentimes gets overlooked is
sounds cliche, but you're in business for yourself,
but not by yourself.
And not logically you think, oh yeah, I've
got a franchise on the sideline and their
support team supporting me.
You also have a community of other franchisees.
It's almost like a mini mastermind of people
that are running the same business as you
learning daily, exchanging best practices.
(05:18):
And so that whole community aspect oftentimes gets
overlooked, but is important as well.
Yeah, a lot of benefits and all real
pain points for starting a business and being
able to test the concept to even see
if it's viable, let alone get it to
a point where it is viable, growing and
scaling.
Sounds like you can also make money a
lot faster this way than trying to go
(05:39):
out and acquire, which is a real problem.
I mean, my best friend bought a business
a couple of years ago.
Man, it was a nightmare.
Two year process to even find a business
to buy.
Lot of work went into it to be
able to get it done.
Why did you focus on non-food franchising?
Out of curiosity, the only person I've ever
heard from or talked to that's actually focused
on that niche.
(05:59):
Yeah, when I say food, people think franchise,
right?
I mean, the F word gets associated that
way, franchise.
We've got nothing against the food guys.
I know a lot of them, respect them.
We support them.
Some of them can do very, very well.
However, at the end of the day for
most people, myself included, there's just easier ways
to make money in my opinion.
And some of these opportunities we work with
require fewer employees, less operating hours, less CapEx
(06:22):
investment, a typically higher margins because you don't
have the food waste, right?
And they're also less susceptible to consumer whims.
Certainly if you own 80 Wendy's, you're sitting
pretty.
But a lot of these are newer businesses
and industries that aren't fully proven.
So frozen yogurt, I joke that Froyo was
big until it wasn't, right?
Think about all the frozen yogurt places you
(06:42):
had in the neighborhood that are no longer
there.
People's tastes change at times too.
So my clients tend to like businesses that
are understandable, cash flowing, non-trendy, in some
cases even non-sexy, just the different niches
out there that they can get plugged into
that aren't going out of style anytime soon.
600 plus that you have access to to
(07:03):
help your clients connect with.
What the heck, how do we choose?
Like how do you go through a process
to narrow that down to figure out the
right kind of franchise for each individual you're
speaking to?
Great question.
So while we work with over 600 and
have those partnerships, end of the day, there's
probably 50 or 60 at any given time
that I feel strongest about.
(07:23):
And again, looking through the lens of having
been a franchisor and I am a multi
-brand franchisee, I'm looking at competitive advantages, financial
model, what are current owners in their system
saying about their experience?
You know, we're looking at the leadership team.
We wanna see a good blend of industry
experience and franchise experience.
So once you start applying these filters combined
with what our clients are looking to do,
(07:44):
not that they're telling me what industry because
they usually don't know and that's why we're
having the conversation, but what's their background from
a skillset standpoint?
What role do they wanna take in the
business?
Is it full-time or is it part
-time?
What, do they see any needs not being
addressed while they're in the market?
You know, so they give me little data
points, but I have such a viewpoint into
so many others with similar backgrounds to them
(08:05):
that oftentimes they don't know what they don't
know.
And that's where I come in to say,
if I were in your shoes, here are
the top 10 opportunities that are currently available
in your market that I would want to
explore if I were you.
And here's what I like about each one.
And then they'll usually narrow that down to
three or four to then have a conversation
with.
And I'll hold their hand through this whole
discovery process.
And Ty, the beautiful thing is it's entirely
(08:27):
free to work with us.
I'm essentially a real estate broker, but for
franchises.
So we essentially get a referral fee from
the brand on the backend.
None of that's passed on to my clients.
So it's entirely free to my clients to
go through the process with us.
So what is that process?
If I'm working with Fairbridge, what does the
process look like?
I come in, I want to talk to
you at Fairbridge Consulting.
What does that process look like for me?
(08:48):
Yeah, so first off, many of our clients
have already read the book, my book, Non
-Food Franchising, by the time we get on
the phone.
And so we're able to start on third
base and really get into more detail.
But typically we would have an introductory conversation.
And then as the next step, I would
have them fill out a profile that takes
just two or three minutes.
It's very high level.
And then I'll start reaching out to franchisors.
Again, I know what's going on.
(09:10):
I know which franchisors are attracting clients with
similar backgrounds, which ones we feel strongly about.
So I'm reaching out to a whole number
of franchisors.
I get the feedback from them as far
as what's available.
Are they looking to expand in that market?
That usually narrows us down a good bit.
So maybe that takes us down to nine
or 10 opportunities.
And I try to provide my clients with
opportunities in different industries, different price points, again,
(09:32):
to give them some good variety.
And so from there, I would then take
my clients through those, let's say 10 opportunities
and talk about them together.
And then their goal, like I said, is
to on their end, narrow those down to
a reasonable sample size to have conversations with.
And what's amazing is the magic starts happening
once they start having those conversations.
They start to crystallize in their mind the
(09:54):
characteristics they like or don't like in a
business.
And they're constantly sharing that with me.
And it may be that we get a
little ways down the road a couple of
weeks and I say, hey, we didn't look
at these other two opportunities, but given the
feedback that you're sharing with me, let's now
take a look at those.
So my preference is to get the ball
in play.
Let's start having real conversations because that's where,
(10:16):
again, the magic starts happening versus just sitting
on the sidelines and hypothesizing around businesses.
I've asked you this question, but I want
to dig a little bit deeper about finding
the right franchise for a client.
I know you're filling in the intake, the
questionnaire that you'd mentioned.
And then you talked about talking to some
of the other, the franchises or franchisors out
there to find the fit.
Like when I'm coming in, what is the
(10:38):
thing you're looking for in me?
Are you looking at my skillset that I
have?
Are you looking at my, mainly my interest
in what I'm really like to do that
I'm passionate about?
Or how do you like really go, this
guy is the best fit for this kind
of franchise?
We have some clients that say, hey, it's
all about the dollars.
What has the most profit potential?
(10:58):
If it's port-a-potties and I can
drop 2 million to the bottom line, I'll
take port-a-potties.
I've got others that say, hey, we're really
into the community.
That's important to us.
We care a little bit less about the
financial side.
We really want to have a passion about
what we're doing and how we serve.
Most people I'll say are probably somewhere in
between.
And they say, John, we're an open book.
We're a blank page.
We don't know what we don't know.
We don't know what we're looking for.
(11:18):
And that's why we're having the conversation.
So again, I like to hit on a
lot of different categories.
Home and property services, health and wellness, categories
like kids, pets, seniors, things that regardless of
the economy, people are always going to spend
on that.
Yeah, that's the general theme.
Most people tell me, hey, John, I'd like
to make the most return on my investment
with the fewest number of employees.
I don't even ask about that, because that's
(11:39):
a given these days.
That's what everybody wants, right?
And so a little bit from a skillset
standpoint, if they were a salesperson, there might
be certain franchises that we look at.
If they say, hey, I'm totally adverse to
sales, then we'll look at some other ones,
or we'll look at ones where they can
hire a salesperson to kind of fill that
need.
So there's a little bit of that.
But again, I don't want us to get
too pigeonholed in a corner because I've seen
(12:00):
it time and time again.
I just had a doctor the other day
by a restoration business.
They didn't come to me saying, hey, John,
I want to do water cleanup and mold
remediation.
Instead they said, wait a minute, I love
the financials, and that's a business that's always
going to be needed.
That's a business that I believe I can
hire a good manager for to go off
and run, and I'll support them, and the
franchisor will support them.
So I'd say the role in the business
(12:21):
that they're looking to play, full-time or
part-time, their background, skillsets, and then really
a lot of it comes down to what's
available in the market, because good opportunities are
moving very fast in good markets.
Give me an idea of some franchises that
are out there.
You touched upon some of them.
Port-A-Potty's was not one I thought
about, by the way.
That's brand new in my brain.
I never thought about that one.
Water Damage Restoration, I actually do a lot
(12:41):
of marketing for water damage restoration companies.
So love, I mean, love that industry.
Some of my favorite industries out there.
What are some other, just of the most,
of the ones that are hitting right now
that are non-restaurant franchises that are out
there?
Yeah, a lot of smart money is flowing
into property services.
A lot of PE is getting involved there
and just very scalable type businesses.
So everything from roofing to flooring to pool
(13:03):
cleaning to landscaping to cabinets, dumpsters.
I've got several in the property services arena
that I'm personally invested in.
Health and wellness, I mean, really, that's something
people will always spend on.
I just had a client that bought a
business that provides infrared sauna, cold plunge, cryotherapy,
red light, all those modalities under one roof
on a membership model to complement gyms very
(13:25):
well.
Certainly have plenty of gyms out there.
We're doing a lot of placements in home
senior care, but while people love that space
of in-home senior care, it does take
a lot of employees.
And so we have some that say, I
want exposure to that, but I don't quite
want that.
So I think of one that provides people
that are looking to age in place with
wheelchair ramps and stair lifts and retrofitting for
Metro Mobility Solutions in their home.
(13:47):
Another one that's very consultative in the senior
space where they work with those, they're looking
to place their parent in a nursing home.
It's the first time they've ever done that.
They don't know where to start.
And so this person becomes a subject matter
expert.
They develop relationships and then they get a
placement fee with these different senior homes.
So it's almost like a brokerage type role.
We have one that we're excited about right
(14:07):
now that is in the logistics consulting space.
And that's kind of a unique space.
I don't know any other franchises in that,
but they're working with some of the large
carriers out there and kind of serving as
we go between for small and medium sized
companies that do a lot of shipping.
And they're able to come in and get
the leverage buying of a franchise system with
the carriers and negotiate better rates, bring those
to the market along with their technology systems.
(14:29):
But everything from pet grooming to, I mean,
we've had clients do incredibly well like youth
soccer.
There's just so many different opportunities across different
industries.
Certainly automotive, you'll always have oil changes and
places like that.
We're not doing as much in automotive these
days.
And now a quick break to hear from
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(14:50):
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(15:10):
I'd say the bulk of it's in those
other categories with probably home and property services
being the biggest one.
I appreciate that because there's so many things
that you hear about non-food.
It's like, I'm like, what other franchise?
And then there's so many things you just
mentioned.
I was like, man, I haven't even thought
about that at all.
But all areas that are really well and
a lot of them are blowing up right
(15:31):
now.
It's impossible to say with 600 of the
investment range.
But it is, let's be honest, it's one
of the biggest questions that people have on
their mind.
So if you had to start with a
minimum of money to invest into the franchise
to maximum within this range of 600, like
what roughly is that starting point to get
in?
Or like if you really wanted to blow
it up, you could be up here.
(15:52):
I'd say on the low end, most investment
placement I've done in recent years is probably
around 70,000.
And that's all in franchise fee, startup cost
and working capital all built in.
Largest one, I had clients buy 10 trampoline
parks recently in Texas.
And those are about $3 million each to
all in.
So that was a big deal.
(16:13):
Most of our clients, when you look again
at your all in investment, which the franchise
or breaks out for you, your franchise fee,
your startup cost, several months of working capital,
all built in.
Oftentimes you're in the 150,000 to 400
,000 ballpark.
I'd say that's a very reasonable area.
Certainly quite a few on either side, but
that might be a customer facing retail business,
(16:33):
or it might be two or three territories
of a service-based business, but that doesn't
have a physical location, but it's more out
in the field, it's territory based.
There are multiple ways that people are getting
involved.
A small minority of my clients are using
all cash, but the majority like the idea
of SBA loans or other types of loans.
Some will roll over their old 401k from
a previous employer through what's called the ROBS
(16:54):
program.
Some will use HELOCs, but I'd say most
of them are looking to leverage and use
other people's money.
And obviously franchises, lending institutions prefer franchises just
from a predictability standpoint.
Yeah, and it's way cheaper than I thought,
by the way.
I instantly thought, I mean, a million dollar
plus, like one of my friends in high
school, her and I went to prom together.
She builds like the Taco Bell buildings, like
(17:16):
not just Taco Bell, like that whole, whoever,
that group they buy, she builds all that.
It's freaking expensive, man.
Like they're putting millions into that building itself.
And I think about that, I'm like, jeez,
well, I don't even begin to know how
much money it is, but it's a lot.
So to talk about where you are, to
load them in six acres, that's actually surprising
to me.
What about financing?
Is it possible for somebody to come in
(17:37):
and get help with financing the franchise?
Yeah, absolutely.
And I'd say probably two thirds of our
clients do finance it, they use leverage.
And so SBA loans are fairly easy to
get.
If someone has this halfway decent credit history
and halfway decent net worth, and by halfway
decent, I mean even like 200,000 net
worth or 150,000, then there are a
(17:57):
lot of SBA programs designed to support them.
So yeah, we utilize SBA loans day in,
day out.
That's a great way.
People can always pay them back early once
they're cash flowing.
And certainly the interest is tax deductible.
So even if someone's sitting on a pile
of cash, they usually like the idea of
leveraging.
What about multiples?
Let's say I buy a franchise, I build
it, I want to exit.
(18:18):
What's the multiple on a franchise?
Is it possible to compare the multiple of
a franchise versus a non-franchise business to
see like which multiple may be higher?
Yeah, that's a great question.
There's been research done that I've seen.
It's a little dated, it's a couple of
years old, but comparing like-kind businesses in
similar industries.
And they showed that in most cases, the
franchise has traded a slightly higher multiple than
(18:40):
the non-franchised.
And I think that resale buyer has an
appreciation for the support they're going to get.
There are fewer unknowns, right, in their due
diligence going in.
So they're willing to pay a little bit
of a premium.
A lot of franchise resales never hit the
open market though.
And the reason for that is other franchisees
in the system buy them before that ever
happens.
(19:00):
It's what I call internal M&A.
So I have a lot of clients that
say, hey, I'd love to buy an existing
operation in franchising.
I can see all that in my system,
but there's really not a whole lot out
there usually that's that attractive because that's already
been bought by another franchisee.
I've personally bought out another franchisee.
I've also sold to another franchisee.
So it can be a really good path,
both for an exit as well as for
(19:21):
a scalability strategy.
Do you find that that's common?
Like somebody comes in and they like a
Chick-fil-A, because a lot of the
athletes and stuff like that that I see
invest do, like they have one Wendy's and
they have 50 Wendy's or the one trampoline
park where they came in and had one
in 10.
Do you find that that's common with once
they get it down, they like it, and
then they go and expand and get another
(19:41):
franchise?
I'd love the location or franchise within that
same, you know what I'm saying.
Absolutely, and in some cases, they'll buy multiple
out of the gate.
So it gives them that path to scale
over time.
But other times it is that internal M
&A acquiring another franchisee.
Very, very, very common.
It happens all the time.
I like to use my client, Nathan, as
an example.
He's the largest franchisee of two minute and
truck moving service.
And started small and then started acquiring other
(20:03):
franchisees within the system.
And he's now up to, I don't know,
13, 14 markets.
Does over 45 million a year in revenue.
But he really got the systems down, learned
the system inside and out, and then went
out and bought up other franchisees as they
were looking to exit.
He also buys other franchises.
So he's built an empire that's multi-brand.
I've helped him in that regard.
And certainly there are financial benefits, but there's
(20:26):
also a culture benefit.
He's attracting great talent because they see the
path within the company to move into other
types of opportunities down the road.
And he gives them a lot of responsibility,
in some cases equity as well, to go
run these other businesses.
And he's just had a ton of success
doing that.
Yeah, I don't think people listening or watching
really understand the value of that because like
I'm in an industry with business credit, but
(20:47):
I can't go do roll-ups.
Like it doesn't exist in my world.
There's nobody out there to acquire that's really
doing what we're doing.
But then if you're, and I got a
buddy that just exited out of the biggest
like T-Mobile spinoff.
Like he was buying all these T-Mobiles.
I mean, just crushed it, exited.
Like I don't know how many multiple line
figures, but it was big.
And that's just a way to do it.
You just go to the same thing.
You could just buy and you already have
(21:07):
the systems and expand.
And that's really hard to do with a
business, but fairly easy to do, I imagine,
if you're buying within the same kind of
franchise.
Yeah, a hundred percent.
No, those bolt on possibilities.
So, you know, franchising gives you optionality, right?
I mean, you can get several years in
and decide, hey, I think I want to
try my hand at another franchise that either
complements my current one, or maybe it diversifies
from it, from a customer base and backend
(21:29):
office personnel standpoint.
Or you can potentially acquire other franchises within
that system.
So you have different, or you can go
out and start a business, you know, that's
outside of franchising.
So again, you're not locked in.
I always encourage people, start with the end
in mind, knowing the end isn't, it's going
to be a little bit vague, but just
kind of aspirations.
Where are you looking to go?
And then what's right for that next season?
(21:50):
Because that next season is going to be
a building block that propels you to do,
you know, again, have options to do multiple
things.
Idea of returns, again, really hard when we're
talking about 600 different ones, I get that.
But I think that's interesting too, is when
I look, it's so interesting how I look
at mostly restaurants and franchising.
I don't know why.
I think that's probably why you are the
non-food guy.
(22:11):
Because like, when I think about it, it's
what pops in my head, as you said
early on.
But man, I'm shocked at how little money
they make.
Like how little the profits are on some
of those franchises that are out there.
I'm like, why would you even do that
with so little money?
Like to own an entire business and make
50K or 100K or 150K.
But I guess to each his own.
So is there any kind of idea of
(22:32):
returns that somebody can make on franchises?
Yeah, certainly it's across the board.
I mean, these are all small businesses end
of the day, right?
But let's just say quite a few kind
of in that 20% ballpark, 20%
margin.
So if you're, a lot of these are
a million dollar business.
So a million dollars, that's kicking off 200
,000 to the bottom line.
Well, your all-in investment may have only
been around 200,000.
(22:53):
That's how a lot of these models are
set up.
So from that standpoint, yeah, you're making a
100% return every year and you're building
an asset that you're gonna be able to
sell and you're getting tax benefits as a
business owner, right?
Oftentimes W-2 people don't think about the
tax benefits.
The whole tax code was written in favor
to support small business owners and create employment.
And so you can make outsized returns in
(23:14):
a lot of cases, but the trade-off
is you're putting time and effort and energy
into it, right?
I always say if business ownership was easy,
everyone would be a business owner.
It takes work.
And I never wanna sugarcoat that.
Even with a franchise, you have a lot
of support systems.
You're able to kind of shortcut your way
to success.
It still takes a lot of work and
it takes having a good operator you put
in place if it's not gonna be you.
(23:35):
So, and that's actually an interesting point.
A lot of franchises market themselves as executive
model or semi-passive, semi-absentee, some call
it.
I like to call it semi-involved because
even if you put a manager in place
day one, you're still gonna be involved in
the business.
And, but it does make it doable when
you've got a franchise or in their support
team on the sideline supporting that manager, they
(23:57):
can carry a lot of that daily support
water for you.
So you can continue focusing on your W2
job or what else you have going on.
And what's the difference kind of between an
owner operator and then somebody that's like a
semi-absentee?
I don't know the difference, but I guess
what I'm trying to say is that, do
you have people that just really wanna be
actively involved and other people that just wanna
put a manager in place and be hands
(24:17):
off?
Yeah, we have about half and half.
So the owner operator typically say they're looking
to make a jump from the corporate world
and they wanna run the business.
They typically don't wanna do that forever.
Their goal is to get in, learn the
business and then hire to replace themselves and
move on to the next thing.
The other half of our clients, I mean,
this includes doctors, high paid W2s that aren't
gonna give up their day job, but they
(24:38):
want to get something going on the side,
start building another revenue stream.
They've all got a variety of different reasons.
But in that case, yeah, it is putting
a manager in place.
Well, that executive model.
And again, you're kind of tag teaming the
management of that person with the franchisor.
So if you've got a rockstar in that
seat, you can put in very, very little
(24:59):
time in theory in that business.
A lot of my clients do that.
If you don't have a great person in
that seat, you're gonna find yourself leaning in
until you do.
So I just always want people to go
in eyes wide open.
You can have a great vehicle, you still
have to have a good driver.
What are some misconceptions about franchising?
Franchising is just like every other industry in
that there's great players and then there are
(25:19):
ones that are not as great.
And the ones that are not as great
are not providing the support to the franchisees
in the way that they should.
So that's where we come in and help
our clients identify which are the top ones
and the ones you don't wanna be associated
with because they're not all created equal.
So I think that would be one point.
I think franchising also, I'll say not everyone
should be a franchisee.
Some people are too entrepreneurial and just wanna
(25:40):
put their thumbprint all over everything and they
think they're the smartest guy in the room
no matter what room they're in.
But I truly believe that franchising is a
better path to business ownership for the majority
of people out there where they can benefit
by the support and the shared system.
Some people think franchising is too rigid and
you certainly see this in the food space
or the hotel space.
It's very closely managed.
(26:02):
However, a lot of industries within franchising, a
good franchise is always gonna let their franchisees
have a little bit of bandwidth and a
longer leash to try new things.
That's where the innovation comes from.
And then, hey, if it works for them,
let's bubble it up to the whole franchise
system.
So I'd say the misnomer can be that
it's too rigid.
They're not gonna let you do anything that's
totally off-brand and hurts the brand, but
(26:23):
they're gonna give you some leeway in most
cases.
What qualities should I have to make me
a really good franchisee?
Yeah, number one, you've gotta be halfway decent
with people.
I mean, that's just business 101.
You gotta be somebody people wanna work with
or work for.
And then secondly, really the big one is
just the humility to follow a playbook.
Again, not to challenge everything.
(26:45):
If there's something that needs to be challenged,
pick your spots, but there's a reason why
you're buying into the franchise system.
And when I was at Shelf Genie and
I saw all these franchisees across North America,
our best performers were the ones that followed
the system and didn't try to recreate the
wheel.
And so I'd say it's having the humility
and the discipline to follow a system.
John, thanks for coming on with us today.
I mean, this has been really eye-opening.
(27:07):
I mean, I can't even think of anything
that you haven't been so openly kind to
be able to share with us.
But I know in your book that we're
just scratching the surface, right?
There's so many things I didn't even think
of to ask you that we need to
cover, and anybody thinking about getting into especially
non-food franchising needs to know.
So where can they go?
(27:28):
Will people watching, what step can they take
to be able to learn more?
Yeah, again, it's entirely free to work with
us, so I'd like to get that out
of the way.
But come out to our website, franbridgeconsulting.com,
F-R-A-N, bridgeconsulting.com, and share
your email address.
There'll be a pop-up when you come
to the website.
Share your email address, we'll send you a
free downloadable copy of non-food franchising.
It's about 90 pages packed with a lot
(27:48):
of content.
It's a good first step, but certainly indicate
on there as well on that pop-up
in the notes space, if you'd like to
jump on a call.
You're happy to jump on a call with
any of your listeners and get to know
them a little bit better and answer their
questions and talk about the process.
And like I said, we like to jump
into the, looking at real opportunities pretty fast
out of the gate.
So yeah, been able to place hundreds of
(28:09):
clients over the last couple of years, and
I would love to help in any way
I can.
Sounds good.
John, thanks for coming on with us today.
Enjoy it.
Thanks, Ty.
So listen, if you're watching this, make sure
you go to franbridgeconsulting.com, franbridgeconsulting.com.
If you go to franbridgeconsulting.com, as John
said, one of the first things that happens
is you see a pop-up and you're
able to grab the non-food franchising book
(28:29):
right there.
And this is a lot of great information
that will give you more details and more
insight being able to break into this world.
Look, it's way easier, way faster, way cheaper
to come in this way than anything you're
thinking about doing with acquiring or starting a
business from scratch.
So let's be honest.
If you're gonna make a wise decision, then
(28:50):
just get educated.
All you have to do is go to
franbridgeconsulting.com, grab the non-food franchising book,
and then at least you're educated.
And I think it's gonna open your eyes
to say, man, does it even make sense
to launch a business?
Does it even make sense to stay on
this path?
Or also, my video just cut off because
my camera just died, but this is exactly
why we have backup cameras here.
So then the other part of this is
(29:11):
that you might realize that it's way easier
than buying or building a business to actually
go down this road.
So make sure you check it out right
now, franbridgeconsulting.com.
Thanks for tuning in.
Take care.
Have a great day.
You've been listening to the Business Credit and
Financing Show with your host, Ty Crandall.
(29:34):
Watch for our next episode to get even
more insight on financing and growing your business.
And don't forget to check us out online
at creditsuite.com for even more business growth
strategies.
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we're talking about a topic we've never
talked about before.
It's probably an easier path to business ownership,
(00:43):
which is franchising.
Specifically, we're really talking about non-food franchising,
which we've never talked about here on the
show.
And I think this is very, very, very,
very valuable because it is well known that
it is easier to take an existing model
or an existing business and go from there
than try to launch one from scratch.
And I think if you're watching this, you
may be somebody trying to launch a business,
(01:04):
and we're gonna give you an easier path
to success than being able to try to
do that on your own.
And to have this conversation with us today
is John Austinson.
Now, John is a top franchise consultant, investor,
author, and speaker specializing in non-food franchising.
Now, the CEO of FranBridge Consulting, he draws
on his experience as a former Inc.
(01:25):
500 franchise system president and multi-brand franchisee
to help clients explore business ownership.
Now, through FranBridge, John connects entrepreneurs with over
600 different high-growth non-food franchising opportunities.
That's like a tongue twister, by the way,
non-food franchising.
Okay, so non-food franchising opportunities, providing expert
guidance throughout the process.
(01:46):
Previously, he served as the president of Shelf
Genie, a national franchise with over 200 different
locations and was vice president of sales at
Carter's Inc.
as well.
Now, he's managed over $350 million in annual
sales there.
So, needless to say, he's got a ton
of experience in this.
And he began his career as a consultant
and at Atkinshire working internationally.
(02:08):
He's also the author of Non-Food Franchising,
a recognized thought leader in the franchise investment
space.
John earned a BBA in finance and an
MBA from the University of Georgia and was
named UGA's 40 Under 40 list in 2014.
And he lives in Atlanta area with his
wife and three children and serves as the
board on the board of Growing Leaders Inc.
(02:28):
as well and the entrepreneurs organization while mentoring
through various nonprofits.
John, you've done a lot of cool stuff.
Welcome, thanks for joining us today.
Thanks for having me.
That's the longest intro I've had in a
long time.
So, I'm not sure where you found all
that.
It's hard to cut it even out because
when it comes to franchising, I don't think
I've ever met somebody that has more experience,
not just in offering franchising, but you lift
(02:50):
it multiple different ways to the tune of
hundreds of millions of dollars you're dealing with.
And yeah, to be correct, so the hundreds
of millions was when I was in the
corporate world, but no, it had a very
large bank of business and P&L on
the franchise side is Shelf Genie.
And really that experience about eight, nine years
ago, it changed everything for me.
So, like so many of your listeners, I
spent many years in the corporate world and
(03:11):
had a great run and very thankful for
it, but I had that desire to do
something a little more entrepreneurial and was very
fortunate to get the opportunity at Shelf Genie
to come in and run our home office
and support all these franchisees.
And that really caused me to fall in
love with the franchise model.
I just saw how so many different backgrounds
could get plugged into business ownership through a
shared system and a shared platform.
And so, yeah, long story short, since then
(03:32):
I've acquired franchises myself on the franchisee side
and I started the consulting practice about six,
seven years ago and love helping others do
the same.
So what do you think between building or
buying a business versus franchising?
What's the benefit of franchising?
Absolutely.
So I do get that question off ETA,
Entrepreneurship Through Acquisition is a big thing out
there and everyone's out there looking.
(03:53):
There's a lot of content around that.
That can be a great proposition, but here
are the case studies that I hear every
single day, multiple times a day.
People come to me and say, hey, John,
we've been looking for an existing business for
three years, four years, five years.
We've been out there and we've been under
LOI multiple times, due diligence fell through or
something couldn't come to terms.
And then they come to me and say,
(04:15):
what about franchising?
And maybe that makes sense.
I hadn't thought about it previously or I
associated it with just fast food.
And one thing I point out to them
there's risk to anything in business, but with
an existing business, you are inheriting someone else's
customer base, someone else's team.
And whenever that happens, there could be some
changes versus what you anticipated.
So you paid a premium for the business
(04:35):
and thinking everything was going to stay the
same.
And there can definitely be good opportunities out
there, but oftentimes people don't kind of think
about the risk associated on that side.
And then they come to franchising and say,
wait a minute, so it's a proven model.
I get to pick my team.
I get to put my thumbprints on the
business from day one.
And I get a playbook.
I get to go, there's already product market
fit established.
(04:55):
It's all about going out and executing.
And one thing that oftentimes gets overlooked is
sounds cliche, but you're in business for yourself,
but not by yourself.
And not logically you think, oh yeah, I've
got a franchise on the sideline and their
support team supporting me.
You also have a community of other franchisees.
It's almost like a mini mastermind of people
that are running the same business as you
learning daily, exchanging best practices.
(05:18):
And so that whole community aspect oftentimes gets
overlooked, but is important as well.
Yeah, a lot of benefits and all real
pain points for starting a business and being
able to test the concept to even see
if it's viable, let alone get it to
a point where it is viable, growing and
scaling.
Sounds like you can also make money a
lot faster this way than trying to go
(05:39):
out and acquire, which is a real problem.
I mean, my best friend bought a business
a couple of years ago.
Man, it was a nightmare.
Two year process to even find a business
to buy.
Lot of work went into it to be
able to get it done.
Why did you focus on non-food franchising?
Out of curiosity, the only person I've ever
heard from or talked to that's actually focused
on that niche.
(05:59):
Yeah, when I say food, people think franchise,
right?
I mean, the F word gets associated that
way, franchise.
We've got nothing against the food guys.
I know a lot of them, respect them.
We support them.
Some of them can do very, very well.
However, at the end of the day for
most people, myself included, there's just easier ways
to make money in my opinion.
And some of these opportunities we work with
require fewer employees, less operating hours, less CapEx
(06:22):
investment, a typically higher margins because you don't
have the food waste, right?
And they're also less susceptible to consumer whims.
Certainly if you own 80 Wendy's, you're sitting
pretty.
But a lot of these are newer businesses
and industries that aren't fully proven.
So frozen yogurt, I joke that Froyo was
big until it wasn't, right?
Think about all the frozen yogurt places you
(06:42):
had in the neighborhood that are no longer
there.
People's tastes change at times too.
So my clients tend to like businesses that
are understandable, cash flowing, non-trendy, in some
cases even non-sexy, just the different niches
out there that they can get plugged into
that aren't going out of style anytime soon.
600 plus that you have access to to
(07:03):
help your clients connect with.
What the heck, how do we choose?
Like how do you go through a process
to narrow that down to figure out the
right kind of franchise for each individual you're
speaking to?
Great question.
So while we work with over 600 and
have those partnerships, end of the day, there's
probably 50 or 60 at any given time
that I feel strongest about.
(07:23):
And again, looking through the lens of having
been a franchisor and I am a multi
-brand franchisee, I'm looking at competitive advantages, financial
model, what are current owners in their system
saying about their experience?
You know, we're looking at the leadership team.
We wanna see a good blend of industry
experience and franchise experience.
So once you start applying these filters combined
with what our clients are looking to do,
(07:44):
not that they're telling me what industry because
they usually don't know and that's why we're
having the conversation, but what's their background from
a skillset standpoint?
What role do they wanna take in the
business?
Is it full-time or is it part
-time?
What, do they see any needs not being
addressed while they're in the market?
You know, so they give me little data
points, but I have such a viewpoint into
so many others with similar backgrounds to them
(08:05):
that oftentimes they don't know what they don't
know.
And that's where I come in to say,
if I were in your shoes, here are
the top 10 opportunities that are currently available
in your market that I would want to
explore if I were you.
And here's what I like about each one.
And then they'll usually narrow that down to
three or four to then have a conversation
with.
And I'll hold their hand through this whole
discovery process.
And Ty, the beautiful thing is it's entirely
(08:27):
free to work with us.
I'm essentially a real estate broker, but for
franchises.
So we essentially get a referral fee from
the brand on the backend.
None of that's passed on to my clients.
So it's entirely free to my clients to
go through the process with us.
So what is that process?
If I'm working with Fairbridge, what does the
process look like?
I come in, I want to talk to
you at Fairbridge Consulting.
What does that process look like for me?
(08:48):
Yeah, so first off, many of our clients
have already read the book, my book, Non
-Food Franchising, by the time we get on
the phone.
And so we're able to start on third
base and really get into more detail.
But typically we would have an introductory conversation.
And then as the next step, I would
have them fill out a profile that takes
just two or three minutes.
It's very high level.
And then I'll start reaching out to franchisors.
Again, I know what's going on.
(09:10):
I know which franchisors are attracting clients with
similar backgrounds, which ones we feel strongly about.
So I'm reaching out to a whole number
of franchisors.
I get the feedback from them as far
as what's available.
Are they looking to expand in that market?
That usually narrows us down a good bit.
So maybe that takes us down to nine
or 10 opportunities.
And I try to provide my clients with
opportunities in different industries, different price points, again,
(09:32):
to give them some good variety.
And so from there, I would then take
my clients through those, let's say 10 opportunities
and talk about them together.
And then their goal, like I said, is
to on their end, narrow those down to
a reasonable sample size to have conversations with.
And what's amazing is the magic starts happening
once they start having those conversations.
They start to crystallize in their mind the
(09:54):
characteristics they like or don't like in a
business.
And they're constantly sharing that with me.
And it may be that we get a
little ways down the road a couple of
weeks and I say, hey, we didn't look
at these other two opportunities, but given the
feedback that you're sharing with me, let's now
take a look at those.
So my preference is to get the ball
in play.
Let's start having real conversations because that's where,
(10:16):
again, the magic starts happening versus just sitting
on the sidelines and hypothesizing around businesses.
I've asked you this question, but I want
to dig a little bit deeper about finding
the right franchise for a client.
I know you're filling in the intake, the
questionnaire that you'd mentioned.
And then you talked about talking to some
of the other, the franchises or franchisors out
there to find the fit.
Like when I'm coming in, what is the
(10:38):
thing you're looking for in me?
Are you looking at my skillset that I
have?
Are you looking at my, mainly my interest
in what I'm really like to do that
I'm passionate about?
Or how do you like really go, this
guy is the best fit for this kind
of franchise?
We have some clients that say, hey, it's
all about the dollars.
What has the most profit potential?
(10:58):
If it's port-a-potties and I can
drop 2 million to the bottom line, I'll
take port-a-potties.
I've got others that say, hey, we're really
into the community.
That's important to us.
We care a little bit less about the
financial side.
We really want to have a passion about
what we're doing and how we serve.
Most people I'll say are probably somewhere in
between.
And they say, John, we're an open book.
We're a blank page.
We don't know what we don't know.
We don't know what we're looking for.
(11:18):
And that's why we're having the conversation.
So again, I like to hit on a
lot of different categories.
Home and property services, health and wellness, categories
like kids, pets, seniors, things that regardless of
the economy, people are always going to spend
on that.
Yeah, that's the general theme.
Most people tell me, hey, John, I'd like
to make the most return on my investment
with the fewest number of employees.
I don't even ask about that, because that's
(11:39):
a given these days.
That's what everybody wants, right?
And so a little bit from a skillset
standpoint, if they were a salesperson, there might
be certain franchises that we look at.
If they say, hey, I'm totally adverse to
sales, then we'll look at some other ones,
or we'll look at ones where they can
hire a salesperson to kind of fill that
need.
So there's a little bit of that.
But again, I don't want us to get
too pigeonholed in a corner because I've seen
(12:00):
it time and time again.
I just had a doctor the other day
by a restoration business.
They didn't come to me saying, hey, John,
I want to do water cleanup and mold
remediation.
Instead they said, wait a minute, I love
the financials, and that's a business that's always
going to be needed.
That's a business that I believe I can
hire a good manager for to go off
and run, and I'll support them, and the
franchisor will support them.
So I'd say the role in the business
(12:21):
that they're looking to play, full-time or
part-time, their background, skillsets, and then really
a lot of it comes down to what's
available in the market, because good opportunities are
moving very fast in good markets.
Give me an idea of some franchises that
are out there.
You touched upon some of them.
Port-A-Potty's was not one I thought
about, by the way.
That's brand new in my brain.
I never thought about that one.
Water Damage Restoration, I actually do a lot
(12:41):
of marketing for water damage restoration companies.
So love, I mean, love that industry.
Some of my favorite industries out there.
What are some other, just of the most,
of the ones that are hitting right now
that are non-restaurant franchises that are out
there?
Yeah, a lot of smart money is flowing
into property services.
A lot of PE is getting involved there
and just very scalable type businesses.
So everything from roofing to flooring to pool
(13:03):
cleaning to landscaping to cabinets, dumpsters.
I've got several in the property services arena
that I'm personally invested in.
Health and wellness, I mean, really, that's something
people will always spend on.
I just had a client that bought a
business that provides infrared sauna, cold plunge, cryotherapy,
red light, all those modalities under one roof
on a membership model to complement gyms very
(13:25):
well.
Certainly have plenty of gyms out there.
We're doing a lot of placements in home
senior care, but while people love that space
of in-home senior care, it does take
a lot of employees.
And so we have some that say, I
want exposure to that, but I don't quite
want that.
So I think of one that provides people
that are looking to age in place with
wheelchair ramps and stair lifts and retrofitting for
Metro Mobility Solutions in their home.
(13:47):
Another one that's very consultative in the senior
space where they work with those, they're looking
to place their parent in a nursing home.
It's the first time they've ever done that.
They don't know where to start.
And so this person becomes a subject matter
expert.
They develop relationships and then they get a
placement fee with these different senior homes.
So it's almost like a brokerage type role.
We have one that we're excited about right
(14:07):
now that is in the logistics consulting space.
And that's kind of a unique space.
I don't know any other franchises in that,
but they're working with some of the large
carriers out there and kind of serving as
we go between for small and medium sized
companies that do a lot of shipping.
And they're able to come in and get
the leverage buying of a franchise system with
the carriers and negotiate better rates, bring those
to the market along with their technology systems.
(14:29):
But everything from pet grooming to, I mean,
we've had clients do incredibly well like youth
soccer.
There's just so many different opportunities across different
industries.
Certainly automotive, you'll always have oil changes and
places like that.
We're not doing as much in automotive these
days.
And now a quick break to hear from
our sponsor.
Hey, it's Ty Crandall with Credit Suite.
(14:50):
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(15:10):
I'd say the bulk of it's in those
other categories with probably home and property services
being the biggest one.
I appreciate that because there's so many things
that you hear about non-food.
It's like, I'm like, what other franchise?
And then there's so many things you just
mentioned.
I was like, man, I haven't even thought
about that at all.
But all areas that are really well and
a lot of them are blowing up right
(15:31):
now.
It's impossible to say with 600 of the
investment range.
But it is, let's be honest, it's one
of the biggest questions that people have on
their mind.
So if you had to start with a
minimum of money to invest into the franchise
to maximum within this range of 600, like
what roughly is that starting point to get
in?
Or like if you really wanted to blow
it up, you could be up here.
(15:52):
I'd say on the low end, most investment
placement I've done in recent years is probably
around 70,000.
And that's all in franchise fee, startup cost
and working capital all built in.
Largest one, I had clients buy 10 trampoline
parks recently in Texas.
And those are about $3 million each to
all in.
So that was a big deal.
(16:13):
Most of our clients, when you look again
at your all in investment, which the franchise
or breaks out for you, your franchise fee,
your startup cost, several months of working capital,
all built in.
Oftentimes you're in the 150,000 to 400
,000 ballpark.
I'd say that's a very reasonable area.
Certainly quite a few on either side, but
that might be a customer facing retail business,
(16:33):
or it might be two or three territories
of a service-based business, but that doesn't
have a physical location, but it's more out
in the field, it's territory based.
There are multiple ways that people are getting
involved.
A small minority of my clients are using
all cash, but the majority like the idea
of SBA loans or other types of loans.
Some will roll over their old 401k from
a previous employer through what's called the ROBS
(16:54):
program.
Some will use HELOCs, but I'd say most
of them are looking to leverage and use
other people's money.
And obviously franchises, lending institutions prefer franchises just
from a predictability standpoint.
Yeah, and it's way cheaper than I thought,
by the way.
I instantly thought, I mean, a million dollar
plus, like one of my friends in high
school, her and I went to prom together.
She builds like the Taco Bell buildings, like
(17:16):
not just Taco Bell, like that whole, whoever,
that group they buy, she builds all that.
It's freaking expensive, man.
Like they're putting millions into that building itself.
And I think about that, I'm like, jeez,
well, I don't even begin to know how
much money it is, but it's a lot.
So to talk about where you are, to
load them in six acres, that's actually surprising
to me.
What about financing?
Is it possible for somebody to come in
(17:37):
and get help with financing the franchise?
Yeah, absolutely.
And I'd say probably two thirds of our
clients do finance it, they use leverage.
And so SBA loans are fairly easy to
get.
If someone has this halfway decent credit history
and halfway decent net worth, and by halfway
decent, I mean even like 200,000 net
worth or 150,000, then there are a
(17:57):
lot of SBA programs designed to support them.
So yeah, we utilize SBA loans day in,
day out.
That's a great way.
People can always pay them back early once
they're cash flowing.
And certainly the interest is tax deductible.
So even if someone's sitting on a pile
of cash, they usually like the idea of
leveraging.
What about multiples?
Let's say I buy a franchise, I build
it, I want to exit.
(18:18):
What's the multiple on a franchise?
Is it possible to compare the multiple of
a franchise versus a non-franchise business to
see like which multiple may be higher?
Yeah, that's a great question.
There's been research done that I've seen.
It's a little dated, it's a couple of
years old, but comparing like-kind businesses in
similar industries.
And they showed that in most cases, the
franchise has traded a slightly higher multiple than
(18:40):
the non-franchised.
And I think that resale buyer has an
appreciation for the support they're going to get.
There are fewer unknowns, right, in their due
diligence going in.
So they're willing to pay a little bit
of a premium.
A lot of franchise resales never hit the
open market though.
And the reason for that is other franchisees
in the system buy them before that ever
happens.
(19:00):
It's what I call internal M&A.
So I have a lot of clients that
say, hey, I'd love to buy an existing
operation in franchising.
I can see all that in my system,
but there's really not a whole lot out
there usually that's that attractive because that's already
been bought by another franchisee.
I've personally bought out another franchisee.
I've also sold to another franchisee.
So it can be a really good path,
both for an exit as well as for
(19:21):
a scalability strategy.
Do you find that that's common?
Like somebody comes in and they like a
Chick-fil-A, because a lot of the
athletes and stuff like that that I see
invest do, like they have one Wendy's and
they have 50 Wendy's or the one trampoline
park where they came in and had one
in 10.
Do you find that that's common with once
they get it down, they like it, and
then they go and expand and get another
(19:41):
franchise?
I'd love the location or franchise within that
same, you know what I'm saying.
Absolutely, and in some cases, they'll buy multiple
out of the gate.
So it gives them that path to scale
over time.
But other times it is that internal M
&A acquiring another franchisee.
Very, very, very common.
It happens all the time.
I like to use my client, Nathan, as
an example.
He's the largest franchisee of two minute and
truck moving service.
And started small and then started acquiring other
(20:03):
franchisees within the system.
And he's now up to, I don't know,
13, 14 markets.
Does over 45 million a year in revenue.
But he really got the systems down, learned
the system inside and out, and then went
out and bought up other franchisees as they
were looking to exit.
He also buys other franchises.
So he's built an empire that's multi-brand.
I've helped him in that regard.
And certainly there are financial benefits, but there's
(20:26):
also a culture benefit.
He's attracting great talent because they see the
path within the company to move into other
types of opportunities down the road.
And he gives them a lot of responsibility,
in some cases equity as well, to go
run these other businesses.
And he's just had a ton of success
doing that.
Yeah, I don't think people listening or watching
really understand the value of that because like
I'm in an industry with business credit, but
(20:47):
I can't go do roll-ups.
Like it doesn't exist in my world.
There's nobody out there to acquire that's really
doing what we're doing.
But then if you're, and I got a
buddy that just exited out of the biggest
like T-Mobile spinoff.
Like he was buying all these T-Mobiles.
I mean, just crushed it, exited.
Like I don't know how many multiple line
figures, but it was big.
And that's just a way to do it.
You just go to the same thing.
You could just buy and you already have
(21:07):
the systems and expand.
And that's really hard to do with a
business, but fairly easy to do, I imagine,
if you're buying within the same kind of
franchise.
Yeah, a hundred percent.
No, those bolt on possibilities.
So, you know, franchising gives you optionality, right?
I mean, you can get several years in
and decide, hey, I think I want to
try my hand at another franchise that either
complements my current one, or maybe it diversifies
from it, from a customer base and backend
(21:29):
office personnel standpoint.
Or you can potentially acquire other franchises within
that system.
So you have different, or you can go
out and start a business, you know, that's
outside of franchising.
So again, you're not locked in.
I always encourage people, start with the end
in mind, knowing the end isn't, it's going
to be a little bit vague, but just
kind of aspirations.
Where are you looking to go?
And then what's right for that next season?
(21:50):
Because that next season is going to be
a building block that propels you to do,
you know, again, have options to do multiple
things.
Idea of returns, again, really hard when we're
talking about 600 different ones, I get that.
But I think that's interesting too, is when
I look, it's so interesting how I look
at mostly restaurants and franchising.
I don't know why.
I think that's probably why you are the
non-food guy.
(22:11):
Because like, when I think about it, it's
what pops in my head, as you said
early on.
But man, I'm shocked at how little money
they make.
Like how little the profits are on some
of those franchises that are out there.
I'm like, why would you even do that
with so little money?
Like to own an entire business and make
50K or 100K or 150K.
But I guess to each his own.
So is there any kind of idea of
(22:32):
returns that somebody can make on franchises?
Yeah, certainly it's across the board.
I mean, these are all small businesses end
of the day, right?
But let's just say quite a few kind
of in that 20% ballpark, 20%
margin.
So if you're, a lot of these are
a million dollar business.
So a million dollars, that's kicking off 200
,000 to the bottom line.
Well, your all-in investment may have only
been around 200,000.
(22:53):
That's how a lot of these models are
set up.
So from that standpoint, yeah, you're making a
100% return every year and you're building
an asset that you're gonna be able to
sell and you're getting tax benefits as a
business owner, right?
Oftentimes W-2 people don't think about the
tax benefits.
The whole tax code was written in favor
to support small business owners and create employment.
And so you can make outsized returns in
(23:14):
a lot of cases, but the trade-off
is you're putting time and effort and energy
into it, right?
I always say if business ownership was easy,
everyone would be a business owner.
It takes work.
And I never wanna sugarcoat that.
Even with a franchise, you have a lot
of support systems.
You're able to kind of shortcut your way
to success.
It still takes a lot of work and
it takes having a good operator you put
in place if it's not gonna be you.
(23:35):
So, and that's actually an interesting point.
A lot of franchises market themselves as executive
model or semi-passive, semi-absentee, some call
it.
I like to call it semi-involved because
even if you put a manager in place
day one, you're still gonna be involved in
the business.
And, but it does make it doable when
you've got a franchise or in their support
team on the sideline supporting that manager, they
(23:57):
can carry a lot of that daily support
water for you.
So you can continue focusing on your W2
job or what else you have going on.
And what's the difference kind of between an
owner operator and then somebody that's like a
semi-absentee?
I don't know the difference, but I guess
what I'm trying to say is that, do
you have people that just really wanna be
actively involved and other people that just wanna
put a manager in place and be hands
(24:17):
off?
Yeah, we have about half and half.
So the owner operator typically say they're looking
to make a jump from the corporate world
and they wanna run the business.
They typically don't wanna do that forever.
Their goal is to get in, learn the
business and then hire to replace themselves and
move on to the next thing.
The other half of our clients, I mean,
this includes doctors, high paid W2s that aren't
gonna give up their day job, but they
(24:38):
want to get something going on the side,
start building another revenue stream.
They've all got a variety of different reasons.
But in that case, yeah, it is putting
a manager in place.
Well, that executive model.
And again, you're kind of tag teaming the
management of that person with the franchisor.
So if you've got a rockstar in that
seat, you can put in very, very little
(24:59):
time in theory in that business.
A lot of my clients do that.
If you don't have a great person in
that seat, you're gonna find yourself leaning in
until you do.
So I just always want people to go
in eyes wide open.
You can have a great vehicle, you still
have to have a good driver.
What are some misconceptions about franchising?
Franchising is just like every other industry in
that there's great players and then there are
(25:19):
ones that are not as great.
And the ones that are not as great
are not providing the support to the franchisees
in the way that they should.
So that's where we come in and help
our clients identify which are the top ones
and the ones you don't wanna be associated
with because they're not all created equal.
So I think that would be one point.
I think franchising also, I'll say not everyone
should be a franchisee.
Some people are too entrepreneurial and just wanna
(25:40):
put their thumbprint all over everything and they
think they're the smartest guy in the room
no matter what room they're in.
But I truly believe that franchising is a
better path to business ownership for the majority
of people out there where they can benefit
by the support and the shared system.
Some people think franchising is too rigid and
you certainly see this in the food space
or the hotel space.
It's very closely managed.
(26:02):
However, a lot of industries within franchising, a
good franchise is always gonna let their franchisees
have a little bit of bandwidth and a
longer leash to try new things.
That's where the innovation comes from.
And then, hey, if it works for them,
let's bubble it up to the whole franchise
system.
So I'd say the misnomer can be that
it's too rigid.
They're not gonna let you do anything that's
totally off-brand and hurts the brand, but
(26:23):
they're gonna give you some leeway in most
cases.
What qualities should I have to make me
a really good franchisee?
Yeah, number one, you've gotta be halfway decent
with people.
I mean, that's just business 101.
You gotta be somebody people wanna work with
or work for.
And then secondly, really the big one is
just the humility to follow a playbook.
Again, not to challenge everything.
(26:45):
If there's something that needs to be challenged,
pick your spots, but there's a reason why
you're buying into the franchise system.
And when I was at Shelf Genie and
I saw all these franchisees across North America,
our best performers were the ones that followed
the system and didn't try to recreate the
wheel.
And so I'd say it's having the humility
and the discipline to follow a system.
John, thanks for coming on with us today.
I mean, this has been really eye-opening.
(27:07):
I mean, I can't even think of anything
that you haven't been so openly kind to
be able to share with us.
But I know in your book that we're
just scratching the surface, right?
There's so many things I didn't even think
of to ask you that we need to
cover, and anybody thinking about getting into especially
non-food franchising needs to know.
So where can they go?
(27:28):
Will people watching, what step can they take
to be able to learn more?
Yeah, again, it's entirely free to work with
us, so I'd like to get that out
of the way.
But come out to our website, franbridgeconsulting.com,
F-R-A-N, bridgeconsulting.com, and share
your email address.
There'll be a pop-up when you come
to the website.
Share your email address, we'll send you a
free downloadable copy of non-food franchising.
It's about 90 pages packed with a lot
(27:48):
of content.
It's a good first step, but certainly indicate
on there as well on that pop-up
in the notes space, if you'd like to
jump on a call.
You're happy to jump on a call with
any of your listeners and get to know
them a little bit better and answer their
questions and talk about the process.
And like I said, we like to jump
into the, looking at real opportunities pretty fast
out of the gate.
So yeah, been able to place hundreds of
(28:09):
clients over the last couple of years, and
I would love to help in any way
I can.
Sounds good.
John, thanks for coming on with us today.
Enjoy it.
Thanks, Ty.
So listen, if you're watching this, make sure
you go to franbridgeconsulting.com, franbridgeconsulting.com.
If you go to franbridgeconsulting.com, as John
said, one of the first things that happens
is you see a pop-up and you're
able to grab the non-food franchising book
(28:29):
right there.
And this is a lot of great information
that will give you more details and more
insight being able to break into this world.
Look, it's way easier, way faster, way cheaper
to come in this way than anything you're
thinking about doing with acquiring or starting a
business from scratch.
So let's be honest.
If you're gonna make a wise decision, then
(28:50):
just get educated.
All you have to do is go to
franbridgeconsulting.com, grab the non-food franchising book,
and then at least you're educated.
And I think it's gonna open your eyes
to say, man, does it even make sense
to launch a business?
Does it even make sense to stay on
this path?
Or also, my video just cut off because
my camera just died, but this is exactly
why we have backup cameras here.
So then the other part of this is
(29:11):
that you might realize that it's way easier
than buying or building a business to actually
go down this road.
So make sure you check it out right
now, franbridgeconsulting.com.
Thanks for tuning in.
Take care.
Have a great day.
You've been listening to the Business Credit and
Financing Show with your host, Ty Crandall.
(29:34):
Watch for our next episode to get even
more insight on financing and growing your business.
And don't forget to check us out online
at creditsuite.com for even more business growth
strategies.
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