Today’s episode focuses on fractional franchise investing. I have often wondered about the idea that our guest shares in franchising.
Our guest today is Kenny Rose, and he talks with us about how a small investor can become an owner of franchises.
As a disclaimer, we are not endorsing their investment, and, as of this recording, my company and I are not investors in this company. You should seek your professional advice.
A franchisee’s employee can own a part of the franchisee’s business through fractional franchise investing.
LINKS FROM THE EPISODE:
- You can visit our guest’s website at: https://franshares.com
- Attend our Franchise Sales Training Workshop:
- If you are ready to franchise your business or take it to the next level: CLICK HERE.
- Follow our guest on social:
ABOUT OUR GUEST:
Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing. With over a decade of experience in the franchise industry, Kenny has worked with over 600 franchise brands in more than 100 industries. As an expert on franchise evaluation, he helped individuals identify the best ways to deploy capital into franchise ownership to maximize return on investment and operations.
Rose founded FranShares to allow individuals to invest in a diversified portfolio of franchises with as little as $500.Backed by Chicago Ventures, the platform is aimed at creating passive income streams for investors. Rose is recognized as a franchise expert and has been featured in various high-profile media outlets, including Forbes, Entrepreneur, Business Insider, ABC, American Express, The Hustle, and Marketwatch, reaching an audience of over 300 million people.
ABOUT BIG SKY FRANCHISE TEAM:
This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/ or by calling Big Sky Franchise Team at: 855-824-4759.
Dr. Tom DuFore, Big Sky Franchise Team (00:01):
Welcome to the Multiply Your Success podcast, where each week we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team, and today’s episode focuses on fractional franchise investing. And this is something that I’ve wondered about that our guest shares for many, many years in franchising. And our guest, Kenny Rose talks with us about how he’s built a company called FranShares that allows for small investors and large investors to become owners in franchises without necessarily having to operate those investments. Now as a quick disclaimer, we’re not endorsing this investment or their company as of the recording of this podcast. Our company and I we’re not investors in this company. And of course, you should always seek your own professional advice on investment options, but this topic is one that I’ve always wondered about if there might be a company that does something like this in franchising, and it’s really exciting to hear what he has going on.
Dr. Tom DuFore, Big Sky Franchise Team (01:07):
Now, Kenny Rose is the Chicago-based founder and CEO of FranShares, which is a platform that democratizes franchise investing. With over a decade of experience in franchising, Kenny’s worked with over 600 franchise brands in more than 100 industries. As an expert on franchise evaluation, he helps individuals identify best ways to deploy capital and to franchise ownership to maximize return on their operations. He founded FranShares to allow individuals to invest in a diversified portfolio of franchises with as little as $500. Backed by Chicago Ventures, the platform is aimed at creating passive income streams for investors. He’s a recognized expert and has been featured in various high profile media outlets, including Forbes, Entrepreneur, Business Insider, ABC, American Express, The Hustle, Market Watch, and many others reaching an audience of more than 300 million people. So let’s go ahead and jump right into my interview with Kenny Rose.
Kenny Rose, FranShares (02:04):
Thanks for having me, Tom. My name’s Kenny Rose. I’m the founder and CEO of FranShares.
Dr. Tom DuFore, Big Sky Franchise Team (02:08):
Right. Well, today is really to talk about FranShares and what it is and what you’re doing. And so just as a starting point, let’s talk about FranShares. What is it and what are you doing?
Kenny Rose, FranShares (02:22):
So FranShares is the first platform where any investor can get into franchise ownership for as little as $500. They do so by investing in a portfolio of franchises alongside other investors, everyone from your retail average Joe, to accredit investors and all the way to institutional. And really the purpose of this is to bring back true owner operators to franchising. I came from the brokerage side of the franchise world the last decade, and I saw a lot of people who wanted to write a check but then not actually do anything for the business. And because any business owner tell you that’s how you destroy a business. And so there was this separation between where money comes from and who the true owner operators are. A lot of people, they’re like, “I will be in and out every single day and be passionate, enthusiastic about it,” but they often don’t have the capital to actually go and start a franchise. And so we separated owners, operators and the capital by crowdfunding capital to fund these true owner operators to start or expand their franchises.
Dr. Tom DuFore, Big Sky Franchise Team (03:21):
I love the concept. Having been in franchising coming up on 20 years, having been involved with franchise sales, I’ve been a franchisee where I was that really absentee to semi absentee owner and saw the difference with not having that vested owner operator in the operation. It was different and seen on that franchise development side and that franchise sales side where we’ve all had these candidates. If you have any sort of experience in it, and it really doesn’t matter the industry where you have experienced people who have been managers or assistant managers or have kind of grown up in an industry, I think of food service and hospitality and others where they come up, they’ve got awesome experience, but they can’t afford the $500,000 or $800,000 to get that restaurant up and running. So I think it’s brilliant. I love what you’re doing.
Dr. Tom DuFore, Big Sky Franchise Team (04:15):
I’ve always wondered if there’d be an opportunity or something like that, number one, from the owner operator side and then number two from an investor side where you don’t have to be an accredited investor to help support or get involved with these franchises. So what led you to structure it in this way and build it how you have?
Kenny Rose, FranShares (04:36):
I came up through, well actually it was kind of my whole career that led up to, because originally I was a financial advisor at Merrill Lynch, so I had experience selling investment products to high net worth individuals. And then I found myself in the franchise world on the brokerage side. So I was helping place people into franchises who are looking to leave the corporate world. And I noticed that a lot of them would say like, “Hey, can I just give you 50 grand and you fund someone else,” and just doing it one-to-one like that, you’re basically creating a partnership and it brings a lot of liability for you, the franchisee, everyone, versus when you’re doing it as an investment vehicle, you’re able to then basically show, “Hey, this is a bunch of people investing and it’s going into multiple franchises.”
Kenny Rose, FranShares (05:16):
And I get asked a lot about, “Hey, why don’t you just do investing one franchise at a time?” And I think we’ll get there eventually, but I realize that most people don’t know anything about franchising. And so to just show them like, “Hey, here’s one franchise,” they don’t really know what they’re looking at. And so we started off with a diversified portfolio. So you get into different industries, different brands and different geographies. So that way it’s like a mutual fund of franchises. And so you’ll start seeing these come up in different industry verticals, different specific geographies like, I’m based in Chicago and I’m excited for the day where I go eat, get my hair cut, go work out, get my oil changed, are all things that I own a piece of.
Kenny Rose, FranShares (05:58):
And so it’s not like owning a share of Apple and going to the Apple store. There’s a lot more going on and money gets chopped up a whole lot of ways versus going to eat at the McDonald’s down the street and it’s like, “Okay, it’s going through the expenses at that location and then gets paid out to investors in the owners.”
Dr. Tom DuFore, Big Sky Franchise Team (06:14):
One of the things I would imagine would be happening for franchisors that may be listening in, I would think this would be almost like a holy grail for franchisors and franchise development professionals. So talk about how franchisors are able to get involved, if they’re able to get involved, if there’s a selection process, how does that all work?
Kenny Rose, FranShares (06:35):
Great question. So it’s funny, honestly, I don’t think a franchisor has said no to us yet because like you said, it’s kind of like the holy grail and that’s why I spent a decade in the industry to bring… I’m like, “This is a big problem and they’re going to see that this is a need.” We’ve had franchisors come from everything from emerging to some of the top 10 in the world all the way to, we’re looking at different industries that I mentioned before. And as far as how people can get involved, for one, I always say add me on LinkedIn and start chatting with me there. But in addition to that, if you go to franshares.com, we actually have a partners page because we’re taking partners that are franchisees looking to get funded, franchisors looking to fund those franchisees, wealth managers and institutional capital that are looking for other types of investments.
Kenny Rose, FranShares (07:16):
And so if you’re a franchisor, you’ll give us some very high level details like size of the brand, things like that. And then honestly, I chat with them all one-on-one to get an understanding of what their experiences, who they are, how they got here and what their long-term plans are and see how we could be a part of that. As far as the selection process, we like to take a step back and look at the industries first and see what industries have been growing and have a lot of long-term momentum. We like to look at things that are fairly Amazon proof, what are they going to keep their hands out of? So I mentioned a lot of service and food industries, those are one’s that Amazon’s not coming into at all. And then we actually look at the brands within those industries and see like, “Hey, how do you stack up with other brands in there?”
Kenny Rose, FranShares (07:59):
Because we’re curators, so we don’t want to just be like, “Hey, anyone who comes can go and list,” because then frankly you’re going to… I say there’s over 4,000 brands, but that doesn’t mean there’s 4,000 good ones. And so we want to make sure that we’re really bringing the best of the best on the platform there. So something that shows good unit economics. A lot of things that you’re going to be dealing with traditional franchisees and what they’re going to look into, what they like about it. But things that we are going to look at outside of what a prospective franchisee would is how many owner operators do you have, who’s actually in the business? I’ve had brands say like, “Oh, we’re all owner operators.”
Kenny Rose, FranShares (08:35):
Then you go talk to him. It’s like, “This guy lives in a different state. What the hell do you mean he’s an owner operator?” Another thing that we truly love if possible is having corporate stores involved. A lot of franchises don’t have any, if not a ton of corporate stores. But reason we like this is that we’re going to be working with your true owner operators who are looking to expand. But where we see a ton of opportunity is those ones, like you said, that don’t have any money and they’ve just got all of the grit and all of the experience. I like to say if you were a Burger King GM for 10 years and then you went to go try and be a McDonald’s franchisee, they’d be like, “Well, you have everything we need except for 1.5 million in the bank.” And so those are the ones that we really are excited about funding.
Kenny Rose, FranShares (09:18):
And frankly, if you have corporate stores, it makes it even easier for us because I have to say, you’ve really got a franchisee farm where you can really grow these people that you have into GMs and you already have them. And there’s ones where like, “Hey, they’re probably out the door soon because there’s no upward mobility.” Well, we get to bring that ladder to them. And so then it’s like, “Hey, it especially helps with your expansion.” Say you’ve got a bunch of corporate stores in Chicago, but you’re like, “Hey, I really want to get to Phoenix.” Well, I’m going to say, “Hey, pick your top three GMs. Ask them if they’d be willing to move to Phoenix to own three stores, and we want to fund them for that three store development.” Every GM is going to say yes. It opens you to a new market and not just a new market, it’s a new market where you have the best possible franchisees starting that market because they’ve been in it already.
Kenny Rose, FranShares (10:04):
And on top of that, we love to prioritize local ownership. So investors that are in these areas where we’re starting locations, they get first dibs on an investment. And so with that, when you’re opening these new stores, it’s not like one franchisee boots on the ground like you typically have telling everyone to come to the store, be that main evangelist. You change it to having hundreds or thousands of boots on the ground. And all those people that invest in your locations say, let’s use the McDonald’s example. If you invest in a McDonald’s that’s going there, you are never going to Burger King again, ever. And none of your friends you are ever going to let to go to a Burger King ever. You’re going to suggest going to McDonald’s more often than you would generally because you’re a part owner in it. It’s like that Reddit versus Wall Street effect in the network aspect of it.
Kenny Rose, FranShares (10:50):
So we’re looking for one’s that are really great at what they do, fast growing and honestly ready for a lot of growth, which I’m sure ready for growth is every franchise, but there’s ones who want to grow and ones who are ready for it.
Dr. Tom DuFore, Big Sky Franchise Team (11:04):
Well, we’ve talked to some about the franchisee side, the franchisor side. Now let’s talk about the investor side for someone who’s investing, as you had mentioned as starting investment at $500 on up to accredited investors or maybe large sum investments that are coming in. So how does that work for someone who says, “Well, I’m interested and I’m willing to give this a try. I’d like to put some money into invest to help one of these budding entrepreneurs get going.” They invest the money and then what happens?
Kenny Rose, FranShares (11:34):
Yeah, well, you know what? I even like to take it a step back before the investment because a lot of it happens before there. I’m big fan of education. I came from a good school, I was in financial services, but I don’t know anything about franchising when it was introduced to me. And most people don’t. You’ve heard it a million times. And so I like people to understand franchising as a whole first. And so we do a lot of educational materials, research guides so we can understand what the hell they’re investing in. I find that’s something that people haven’t done in the past often. And once you get a general education on franchising, create an account and you can actually learn about the open offerings and so what these franchises are. It’s not a blind pool and, “Oh, let’s see what happens,” but go learn about the brands, their experience, the leadership, the franchisees that you’re investing in, understand all of that stuff.
Kenny Rose, FranShares (12:19):
And then once you actually do invest, you’re investing into a pooled portfolio. So it’ll be multiple locations and multiple geographies to start. Eventually we’ll get in those single geography ones. As the franchisees perform, we pay quarterly dividends. And so investors get their pro-rata share of that return. So say, just to use round numbers, you invest 10% of the portfolio size, you’re going to get 10% of those returns paid out to you in quarterly dividends. And so you get that dividend producing side, which investors really love because they’re all looking for new streams of income, both because of increase in living costs, but also because they don’t want to work forever. And when you go to retire, social security does not allow you to maintain that lifestyle that you’ve had in the past. By stacking these different income streams you can be a little more prepared for retirement, but also for your day-to-day life, just being able to afford more things.
Kenny Rose, FranShares (13:15):
In addition to the income side of it, you also have this equity growth. So we have different types of portfolios and will in the future where some of them are growth one’s, so you’re investing into new locations. Now that’s where we will see the biggest equity upside because you’re building at cost and as the business grows, it’s worth more. Now over somewhat more of just an income investment. And so it’s like, “Hey, this is already up and running. We’re going to invest in it.” But you’re not going to see as much equity growth, but you’ll see quicker income because it’s already going and frankly you’re paying a higher premium because they already built it. But in addition to that, once we eventually sell a portfolio, so goal being to sell every seven to 10 years or so, you get your pro-rata share of that sale price. So again, going back to the example, if you own 10% of the portfolio, you’re getting 10% of that share price there or the sell price I should say.
Dr. Tom DuFore, Big Sky Franchise Team (14:05):
Interesting. Now, for that owner operator, for the franchisee in this scenario, how does that work for them? Do they get a piece of ownership as part of that process? What do they end up with as part of the deal?
Kenny Rose, FranShares (14:17):
So every deal’s going to be a little different depending on what they have and what they’re trying to do. So if you were to own a few locations and we’re helping you build the next five, it’s going to look a little different than if you’re doing what I call the Chick-fil-A style of ownership and you’re coming in with little to no money and we’re putting in everything for you. A lot of times we’ll do like a waterfall. And so we help investors recoup their capital faster also because it’s more risk at the beginning. And so it’ll be something like a 75, 25% split of the income that’s 75 going back to the investors until they recoup that total investment. And it’ll go more to a 50/50 share until we basically get a certain type of return form and then it’ll be 25% in perpetuity for the investors until we eventually exit the portfolio.
Kenny Rose, FranShares (15:05):
So you still maintain that equity side, the level of payout is going to switch because frankly we want franchisees who are, we’re not taking advantage of them, we want them to be equity owners. We want them to really make substantial capital and be able to grow. We don’t want to do one location with each franchisee. We want to help scale them and build them. And that’s also why we’ve got advisors everywhere from franchise investment banking all the way to major franchisees that have over 400 locations, is that do we want to have these different ways to help support you in how you grow over time. And as I really thought about this, I was thinking about what franchisees like? What they don’t like? Problems they have. Solutions offered out there. And when you look at it traditionally, you get a bank loan, you are basically paying interest and they’re very high payments and that’s it.
Kenny Rose, FranShares (15:53):
That’s all. They give you the capital and fear for your life. And so for us, it’s not here’s your payment that’s due every month. It’s we’re partners with you, we’re growing with you at the same rate you are. And in addition, franchisees, they want to run the business. There’s a lot of other parts of it that you’re required as a franchisee to do, but are very difficult and they don’t come up all the time. It’s site selection, the permitting process, construction management, how you get insurance for the business. There’s a lot of things out there where if you are a thousand person company, you got great platforms out there for you, but they’re not built for small franchisees. Versus we have subscriptions for this that we then end up sharing with franchisees or give significant discounts for, and it’s something that franchisors can’t do or else it gets too close to joint employer law.
Kenny Rose, FranShares (16:39):
But we’re partners with them. We can give them all the support we want. We’re helping to support them by offering all these different areas as well. But then even taking it a step further and looking at the employees themselves, employees and franchise, they’re often getting minimum wage and there’s no upward mobility. And so that’s why you see a ton of turnover in the franchise space. So how do you reduce that? Well, again, it’s something Chick-fil-A figured out and something that we replicate for other brands, which is there’s a ladder now, you can start as a minimum wage employee and work your way up to become a general manager and then eventually an owner because we’re going to fund you.
Kenny Rose, FranShares (17:13):
But in addition to that, it’s everything before then. So when you’re minimum wage employee oftentimes, it’s how do I get insurance, auto insurance, health, how do I save for retirement? What if I have an emergency expense? And so again, a lot of platforms out there that can help with these things, but they don’t really cater to the smallest of businesses. So we end up bringing these opportunities to franchisees so they can offer benefits for their employees. Now and you can offer benefits for employees you have better quality employees coming to you, and they’re staying for longer because they’re not getting these things other places. And so that’s what’s going to keep better people there for longer term. And in essence, that’s going to increase returns, better operations, lower turnover. And so we’re trying to look at the full life of the business and how we can help because it starts with the money, but it doesn’t end there. And that’s what banks have always thought it has, but it’s like, “No, I want to support you throughout your entire operation partners with you.”
Dr. Tom DuFore, Big Sky Franchise Team (18:07):
I really like what you described, especially for those employees that are either working at a franchisee location or working at a corporate location that now can see an actual pathway and provides to these franchisees into the franchisor what I’ve always encouraged our clients to do, which is build this employee to franchisee pathway to make it a clear path for them to say, “Here’s where I can start, but here’s where I can go if I work hard and put the time in.” And what I’ve seen for companies that implement these kinds of programs, and I’m sure you have as well, it doesn’t take as long as someone might normally think to rise up quickly to become a star and be viewed or recognized or maybe tapped as the next in line or getting in line for that. It happens much more quickly than I think people think.
Kenny Rose, FranShares (19:00):
Oh yeah, well, they just don’t care to listen or look at them. And honestly, I think if you don’t give people opportunity, you don’t give them a chance to rise. And so we want to give opportunities so people can prove themselves and work their way up. Because honestly, I’ve always said, “Hey, five years, anyone working in a franchise could probably run it by then.” It’s actually realistically probably less, but I like to say it as a safe thing. And so it’s like, yeah, you’ve got all the people you need to help continue to scale this business. They just lack funds. As a franchisor it’s a real gray area/ impossible to fund them. That’s where we like to create this opportunity for them. And I love that you call it employee to franchisee path. I’ve been calling it the latter. I think that resonates a lot more, especially with a lot of people, to be honest. So yeah, no, we’re excited to really create this ladder for people.
Dr. Tom DuFore, Big Sky Franchise Team (19:44):
How can someone learn more about what you’re doing? Reach out to gather the info or get involved? What’s the next step they can take?
Kenny Rose, FranShares (19:52):
Go to franshares.com and it’s like shares of franchises. Also add me on LinkedIn. My name’s Kenny Rose. Rose felt like the flower. Yeah, start the conversation and you never know where it could go.
Dr. Tom DuFore, Big Sky Franchise Team (20:02):
Love it. Well, this is a great time in the show where we transition and we ask every guest the same four questions before they go. And the first question we’d like to ask is, have you had a miss or two on your journey and something you’ve learned from it?
Kenny Rose, FranShares (20:16):
A miss, man, honestly, it was with a vendor I worked with very early on, that was a technology one. And honestly, I think we just raised our venture funding and I was new to being a founder of a tech company and signed a contract without having the legal team review. And I ended up paying for it dearly, just a lot of over promising, under delivering and not a lot of action I could take from it. And so I learned that, don’t take people’s word for it, verify everything and always have legal take a second and third peak at it.
Dr. Tom DuFore, Big Sky Franchise Team (20:48):
Great advice there, certainly. Well, let’s talk about a make or two you’d like to share.
Kenny Rose, FranShares (20:53):
Make was actually getting my funding for the company. I had this idea seven or eight years ago. I built another brokerage before I actually went and launched it. And then actually it was when the pandemic hit and I read an article, people were gambling on the stock market because sports weren’t on. And I was like, “Oh, investing doesn’t make sense anymore. It’s time for this.” I’ve got everything together. And then I was like, “All right, time to go fundraise.” And it’s amazing how much venture investors don’t really like that F word that is franchising. And so I reached out to probably 400 of them, maybe got three responses back, and even then I was like, “Ah, cool idea. Maybe talk to us later.”
Kenny Rose, FranShares (21:27):
And I was like, “You know what? I’m going to go prove it.” And so I started networking the people I knew and online and I was like, “I’m going to go raise from angel investors to start.” And I ended up raising almost 600,000 in three weeks. Then I went back to all the venture venture funds and said, “Hey, I’ve got money in the bank, I’m ready to roll.” And said to keep working my way there, but eventually raised our full pre-seed round for the company, which was a little over 1.5 Million. And so it was a lot of beating my head against the wall, but we got there.
Dr. Tom DuFore, Big Sky Franchise Team (21:56):
Amazing. Well, let’s talk about a multiplier that you’ve used to grow your sell for your business.
Kenny Rose, FranShares (22:01):
Yeah, it’s funny, some people won’t like this, but it’s hire slow. I’ve heard a lot of people say, “Hire fast, fire fast.” And I couldn’t disagree more. My very first hire for the company, I couldn’t have gotten a better person, but it took me five months or so, maybe even longer. I was like, “Oh, I can keep building stuff while I look for them.” I had 1,000 applications for it. People saw that we were funded and stuff, and I was just like, it can’t be a, “Oh yeah, good,” or, “They could probably do it.” It’s got to be a burning, “This is the person for the job.” And I ended up hiring a recruiter because I still couldn’t find that person. Even out of all those applications interviews I did. And then the recruiter brought me a couple people and then I met Brandon our first hire, and this guy is just an absolute machine and best marketer I could possibly imagine working with.
Kenny Rose, FranShares (22:49):
And so we’re like, “Okay, you need to be very careful with who you hire and just take your time.” And even when we’ve been hiring lately, we talk with the team and we’ll have conversation and it’s like, “I don’t know.” And then I’m like, “If it’s not a hell yes, it’s a no.” And so we literally passed on candidates in the last rounds because it just wasn’t a hell yes. And then after we did that, brought on the next people and it was like, “Oh hell yeah, there we go.” And so we’ve got an amazing team that’s just done incredible for, honestly a few of us there are VCs are baffled by what we’ve done with, now we’re at five people and they’re like, “I don’t know how you do this.” And I’m like, “I hired very slowly.” That’s what I recommend people. It’s just like, I know it’s really tempting to jump on. “Oh, they check all the boxes.” But it’s like, “Yeah, they can check boxes, but are they the person?”
Kenny Rose, FranShares (23:39):
If it’s not the person, start over because it’s a lot more expensive and frustrating to hire the wrong person. And the multiplier you get from hiring the right people is just, it’s so hard to actually quantify.
Dr. Tom DuFore, Big Sky Franchise Team (23:51):
Great advice there. And the final question we ask every guest, Kenny, is what does success mean to you?
Kenny Rose, FranShares (23:59):
Oh man. A lot of ways to define it. It’s funny because I like to tell people I’m the least greedy founder ever. I don’t care about being a billionaire or anything. I’m here to build something good for everyone. I find it’s one of those all boats rise to the tide thing. So success to me is something I really saw for where I see this business going is that eventually I want you to be able to walk into a Jimmy John’s that you’re going to, and you’ll see a QR code on the counter there, so own a piece of this business. You can scan it and invest in shares of that franchise you’re standing it. That’s success to me. I can’t wait for that day. And it’s really going to put the tangibility of what local business ownership is and local investing is. So that’s success to me when I can do that.
Dr. Tom DuFore, Big Sky Franchise Team (24:42):
Hearing you say that spurred a thought thinking of that QR code sitting at that local Jimmy John’s or a local, whichever franchise it might be. And it makes me think about maybe an employee who’s there. If the minimum buy-in, as you said is $500, someone who’s even a part-time employee might decide, “I’m going to save a little from each of my paychecks for the next little bit. And now they know they own a part of that.” And you can literally as that owner now create this version of shared ownership with your staff and with your employees as a benefit. So it’s beautiful.
Kenny Rose, FranShares (25:17):
It’s actually in the pipeline for us. Instead of a 401k, 401 Fran. So yeah, I want people working there and owning it to own a piece of it because frankly, everything will go so much smoother and better.
Dr. Tom DuFore, Big Sky Franchise Team (25:30):
Brilliant. Well, as we bring this to a close, Kenny, is there anything you were hoping to share or get across that you haven’t had a chance to yet?
Kenny Rose, FranShares (25:37):
No, honestly, just go check us out, learn something new and hope to see you in an offering one day, hopefully.
Dr. Tom DuFore, Big Sky Franchise Team (25:44):
Kenny, thank you so much for a fantastic interview and let’s go ahead and jump into today’s three key takeaways. So takeaway number one is when Kenny just talked in general about FranShares and that any investor can get into the franchise investment with just $500. So it really becomes accessible to literally just about anyone.
Dr. Tom DuFore, Big Sky Franchise Team (26:06):
Takeaway number two is the way the model’s set up with the franchisee is it provides a waterfall investment for that franchisee. So in the beginning he described for a franchisee, the investors might own 75% of the franchise and the operator owns 25%, and then eventually it swaps and it phases out where the investors eventually are bought out of their investment to own 25% and then the operator will own 75%. So I love, again, how this is providing to a potential great operator that maybe doesn’t have the financial resources to open and operate a franchise to pair together with FranShares.
Dr. Tom DuFore, Big Sky Franchise Team (26:50):
Takeaway number three is when Kenny shared his multiplier and he said, “Fire fast and hire slow.” And he said, if it’s not a, “Heck yes,” then it’s a no when hiring someone. I thought that was just a great takeaway. If it’s not heck yes, then maybe you should find another candidate for that position.
Dr. Tom DuFore, Big Sky Franchise Team (27:10):
Now it’s time for today’s win-win. So today’s win-win is when Kenny shared what success means to him. And one of those things that he said was that now with FranShares, a franchisee’s employees can own a piece of the franchise company that they’re working for. So if you’re a franchisee out there or that’s part of this FranShare system, over time your employees could literally buy a part of the business and then share in the dividends that come through that investment. And to me, that’s a beautiful thing that brings it full circle to have some level of ownership from the franchisee to the investors all the way down to a full-time or a part-time employee could be able to become a part of this. So I thought that’s just a phenomenal, phenomenal win-win.
Dr. Tom DuFore, Big Sky Franchise Team (28:07):
And that’s the episode today, folks. Please make sure you subscribe to the podcast and give us a review. And remember, if you or anyone might be ready to franchise their business or take their franchise company to the next level, please connect with us at bigskyfranchiseteam.com. Thanks for tuning in and we look forward to having you back next week.