Did you know that the semi-absentee franchise owner and multi-unit franchise owner is on the rise? And did you know that the majority of franchisors are in non-food franchising? It is not to say that food franchises are unimportant, but it is a common misunderstanding with franchising.
I am so pleased to have our guest, and someone I have worked together with for several years. We actually work as counterparts. Our company helps a business owner franchise their company and then Jon and his company can help find franchisees for franchisors.
Our guest today is Jon Ostenson, who recently released his book, “Non-Food Franchising.” You can download a free copy of his book on his website: www.franbridgeconsulting.com.
TODAY’S WIN-WIN:
Working with Franchise Brokers like Jon, help franchise candidates find the right franchise to buy and franchisors grow their system.
LINKS FROM THE EPISODE:
- You can visit our guest’s websites at: https://franbridgeconsulting.com/
- Connect with Jon on LinkedIn: https://www.linkedin.com/in/jonostenson/
- If you are ready to franchise your business or take it to the next level: CLICK HERE.
ABOUT OUR GUEST:
Jon is a top 1% national franchise broker, investor, author, and international speaker specializing in the area he has coined as ‘Non-Food Franchising’. Having served as the President of an Inc. 500 franchise system and now as a multi-brand franchisee, himself, Jon is uniquely positioned to educate others on franchising and franchise selection.
Jon serves as CEO of FranBridge Consulting and has helped thousands of entrepreneurs and investors explore business ownership and investment opportunities.
Jon is the author of the book “Non-Food Franchising’’ and is a frequent contributor and thought leader for publications on the topic of franchising and franchise investments. Prior to FranBridge, Jon was the President of a national franchise system with more than 200 locations
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.
If you are interested in being a guest on our podcast, please complete this request form or email podcast@bigskyfranchise.com and a team member will be in touch.
TRANSCRIPTION:
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 did you know that the semi absentee franchise owner and multi-unit franchise owner is on the rise? Did you know that the majority of franchisors are a non-food franchising? And it’s not to say that food franchises are unimportant, but it is a very common misunderstanding with franchising and I am so pleased to have our guest today, and it’s someone that I’ve worked with together for several years and we actually work as counterparts. Our company helps business owners, franchisor company, and then our guest, Jon Ostenson and his company, FranBridge Consulting, help match franchisees with franchisors. And Jon Ostenson, our guest today, recently released his book called Nonfood Franchising, and he’s offered a free copy that you can download right from his website, franbridgeconsulting.com.
Tom DuFore, Big Sky Franchise Team (01:08):
Now Jon is a top 1% national franchise broker, investor, author, and international speaker specializing in the area he has coined as non-food franchising. Having served as the president of an Inc 500 franchise system and now as a multi-brand franchisee himself, Jon is uniquely positioned to educate others on franchising and franchise selection. Jon just brings a depth and wealth of information having been a president of a national franchise system prior to starting FranBridge that had more than 200 franchises in their system. And so you’re going to love this interview. It’s right to the point and Jon gives a lot of great information. So let’s go ahead and jump right into my interview with Jon Ostenson.
Jon Ostenson, FranBridge Consulting (01:57):
Yeah, Jon Ostenson. I head up FranBridge Consulting based in Atlanta, but we work all across North America.
Tom DuFore, Big Sky Franchise Team (02:03):
As a quick intro, Jon, what do you do with FranBridge?
Jon Ostenson, FranBridge Consulting (02:06):
Yeah, I love what I do. I get the opportunity of helping other people step into business ownership and so we’ve personally invested in franchises as a franchisee. I’m a former franchisor and so I come at it from that angle, but now I’ve just seen so many successes across the board for those looking to get into business ownership through franchising. So our goal is to help as many as we can, whether it be full-time or part-time, executive modelist, semi absentee model by helping them understand this world that we call non-food franchising and then take tangible steps towards getting involved.
Tom DuFore, Big Sky Franchise Team (02:37):
Great. Well, Jon, and this is one of the reasons I was excited to have you on, you just finished your new book called Non-Food Franchising, and so I’d love for you to just give a quick little overview on the book and what led you even to put this together.
Jon Ostenson, FranBridge Consulting (02:52):
Yeah, absolutely. Again, having been a franchise, I saw this landscape out there and I saw that there was a gap in the market really in an understanding about the types of opportunities within franchising. So I say franchise, most people would say fast food, and yet there’s this large world outside of food, outside of hotels, there’s this other world that exists that a lot of people just don’t know much about, don’t take into consideration. So the purpose of the book is to really educate on a number of topics.
Jon Ostenson, FranBridge Consulting (03:20):
We talk about what the franchise model means, how does that work, what are the tradeoffs, the pros and the cons? We talk about franchising versus startups, franchising versus acquiring an existing business. Again, what are the trade-offs? We talk about franchising your business. Again, a lot of business owners that we work with now are either looking to expand their portfolio through buying additional franchises or in some cases they’re looking to franchise their business. And then I introduce him to the great Tom DuFore because he is the one that specializes in that niche. But we talk about the landscape that we see out there as far as the types of opportunities that are resonating with different backgrounds, the different industries, how each works. We talk about the financials, we talk about the funding piece. And so we try to package all this together in a very readable format. Book’s been out two months now. We’ve gotten great feedback and our hope is that it helps a lot of people.
Tom DuFore, Big Sky Franchise Team (04:13):
I appreciate it and I’ve read your book. I thought it was excellent. So anyone who’s tuning in, this is a shameless plug here for Jon’s book, but it’s excellent, especially if you’re coming in, you’re new to franchising or relatively new. It’s an excellent overview on the whole process. And one of the things you just said that really stood out as someone I’ve spent my entire career in franchising is when you speak with people who are not familiar just in general with franchising, the immediate thought is always fast food or some kind of food related business. So I appreciate your interest in helping looking to broaden someone’s understanding that it’s not just food. Franchising is not just food. It’s much broader than that. And with the recent growth here in franchising, it’s really been hot as of late. Give us an overview. Who’s buying? What are they buying? Who are these folks that are coming into franchising at this stage?
Jon Ostenson, FranBridge Consulting (05:06):
From a 30,000 foot level, I’d say most of our clients are somewhere between 30 and 60. We’ve done some deals in their twenties or sixties, but I’d say 30 to 60 and probably 40% of our clients are looking to make the jump into an owner-operator role as we would call it, where maybe they’re leaving their corporate job and they can take on the reins of running the business day to day, full time, but then close to two-thirds or 60% of our clients are looking to go with what we call an executive model or semi-absentee where our semi pass and you’ll hear these different terms and that’s where you put a manager in place day one to run the business for you. Now you want to have a good manager. You want to incentivize and align your interest correctly, and we kind of coach our clients around that.
Jon Ostenson, FranBridge Consulting (05:48):
But ultimately, the beautiful thing about franchising as you know is you’re in business for yourself, not by yourself. You’ve got that franchisor over there. You can send your manager off to be trained by the franchisor. That franchisor is going to be that technical resource for your client. They’re going to be helping almost tag teaming with you. I mean, the buck still stops with you, but that franchisor is really going to help you manage the manager. And so the burden doesn’t fully fall on your shoulders since that’s one of the beautiful things with that kind of support system around it.
Jon Ostenson, FranBridge Consulting (06:16):
So I’d say it’s approaching two thirds of our clients are looking to go with that model. And so we share how we’ve personally done it, how our other clients have done it. And Tom, we work with such a wide array of different backgrounds. I mean, primarily white collar folks that we’ve worked with, but we’ve done multiple deals last couple months with dentists. I mean, I think we’ve done four or five deals with dentists this best fall. Doctors, attorneys, existing business owners, and then of course the corporate guy or gal that’s looking to make an exit or at least get a side hustle going and scratch that entrepreneurial itch that we all have.
Tom DuFore, Big Sky Franchise Team (06:53):
What have you seen in terms of… I guess when I think of from the perspective of the franchisor, when you use these terms semi absentee or executive model, the coaching that oftentimes I’ll provide or others in a similar space will provide us, say you really are looking oftentimes for an owner operator who’s going to be there actively running and promoting the business. So how would you describe to someone the candidates you’re placing to a franchisor just to maybe help them feel more comfortable bringing on a semi absentee owner into their network?
Jon Ostenson, FranBridge Consulting (07:27):
Yeah. Well, if you’ve been around franchising any length of time you’ve already had to address this because again, much of the market is represented by semi absentee, but I think it’s someone that understands what the day-to-day is going to look like and the needs of the business, and they’re willing to roll up their sleeves and potentially put in 15 hours a week early on with the goal that scales back over time. But they’re also going to put forward a very strong manager. They’re going to invest in somebody. They’re going to either give them a little bit of equity or at least a profit sharing plan that aligns the interest with the business and then they’re going to support them. And so I think those are the questions that should be asked. I think a lot of new franchisors out of the gate may get too excited by the first couple of candidates that show interest in their franchise system.
Jon Ostenson, FranBridge Consulting (08:07):
And I always encourage them, “Hey, be patient.” This first couple of franchisees set the tone for your franchise system. They’re going to be the ones validating, they’re going to be the ones building that item 19 for you. And so it’s so important to bring the right people on, but something that we’re helping our clients with, we actually partnered with a national recruiting service that can help our clients find managers to manage business. Now there’s a small investment they have to make to use this recruiting service, but they kind of know what to look for in these managers because we felt like that was the gap that we’re hearing from our clients is, “Hey, we love the idea, but where do we find a good manager?” And so now we’ve got a backup plan for them.
Tom DuFore, Big Sky Franchise Team (08:44):
As with most things, it’s always that how do we find this key manager? And are you finding that when the franchisees you’re helping place and find the right franchise fit and that are going semi absentee executive model, are they employing this manager? Are they coming in as partner in the organization? How do you usually see that structured?
Jon Ostenson, FranBridge Consulting (09:06):
It really is both. It’s a combination of both. I’d say more oftentimes they’re hiring them. I think about one of our franchises is a driveway business, and we brought on a manager and about a month in he said, “Hey, I really like what we’re building here. Can I actually buy into the business?” And we let him buy into 20%, which of course we loved hearing that his interest and he put equity and put his own capital in the game. So it’s a combination. I think of a client of mine, Nathan over in South Carolina. This is a guy, he’s the largest franchisee of Two Men and a Truck moving service, operates in 10 markets, only 40 years old. He’s become a good friend of mine. And every year he comes to me and says, “Hey, what’s new in the market? I’m ready to launch another business.”
Jon Ostenson, FranBridge Consulting (09:46):
And he’ll put a young guy, oftentimes he finds through his church or his community and in charge of the business and he’ll say, go make us proud. And Tom, in every case, he’s come back and bought additional locations within the first year of a launch. And so that’s always good validation. I love seeing it, but he goes heavy on the equity side. He kind of has that mindset. I’d rather have a small piece of a big nut than a big nut piece of a small nut. He wants to really incentivize these young guys that are hungry to go get after it. So other clients might want to keep the cap table clean and they’d rather just use more of a profit sharing plan, which there’s nothing wrong with that. Yeah, pros and cons both ways, but I think either model can work.
Tom DuFore, Big Sky Franchise Team (10:25):
Walk us through a little bit. Maybe someone’s listening in and thinks, well Jon, I’d love to maybe develop my own little extra side hustle business. Or maybe they might have a potential franchise candidate or someone they know that might be interested in going through this. Talk through how you help guide someone. What’s that process look like as they come to you and say, Jon, I’m interested in something. Now what? How do you help guide someone through that?
Jon Ostenson, FranBridge Consulting (10:50):
I’d start by saying it’s entirely free. There’s no cost to work with us. We’re funded by the franchise brands. For them, it’s a sales and marketing expenses, so nothing gets passed on. And we’re affiliated with IFPG, largest brokerage in North America. And even at FranBridge. At FranBridge, we do more deals than just about anybody else out there. So we get to see what’s resonating with different backgrounds all around the country and really be prescriptive in what we recommend to our clients. But we’ve streamlined the process, Tom. We keep streamlining it more and more because what we know is the magic happens when people are engaged with real opportunities and someone gets brought up on that call and they say, “Hey, wait a minute, I can see myself doing that. That does fit.” So our process now, we’ll have an intake call usually with me.
Jon Ostenson, FranBridge Consulting (11:33):
I’ll ask some questions, share some thoughts, we’ll share a copy of our book, share some other resources, kind of help them fill in the blanks. And then the very next session we will jump into reviewing opportunities. And typically it’s around 10 opportunities that we see as the top available opportunities in your market, given what you’ve shared with us, given the strength of the franchisors that we work with, their financial model, their competitive advantages within a given industry and what’s resonating with others. And we bring that together. And then based on market availability, hey, here are the top 10 and we’ll walk you through each of those. From there, you’d say, hey, here are the three or so that seem most intriguing. We would make an introduction to the franchisors. And Tom, after that first call, the franchisor, you may say, “Hey, that’s definitely not for me. What was Jon thinking?”
Jon Ostenson, FranBridge Consulting (12:19):
Totally fine. But every call, you’re going to pick up something, some nuggets that are going to help you build this framework in your mind of what it is you’re looking for. What characteristics resonated with you with this opportunity? And this one’s opportunity’s missing it. That’s just when the magic happens. And so many of our clients go in saying, hey, this one that was number three or four, should I even talk to them, becomes their number one because something gets brought up on that call they hadn’t considered. And so the franchisor, as you know, will then take you through a process of reviewing the franchise disclosure document and financials. We get to validate, talk to other franchise owners within the system. It culminates at the end of usually a two month period with what’s called a discovery day or confirmation day. And we hold our client’s hand through the process. We’ll have a series of touch base calls and we’ll help them explore funding options or if they need a franchise attorney or recruiters I mentioned, we serve as a provider of all those resources to them.
Tom DuFore, Big Sky Franchise Team (13:13):
Yeah. Thank you for sharing that, Jon. And this is a great time in the show where we like to make a transition and ask you the same questions we ask every guest before they go. And the first question we like to ask is, have you had a miss or two in your career and something you learned from it?
Jon Ostenson, FranBridge Consulting (13:29):
I’ve had so many misses in my career, it’s not even funny, but let me think. One that comes to mind that I think is relevant here along with a business partner, we started a business that was a marketing agency and a call center combination. We made the phones ring and we answered them, and we actually served franchises. We were a franchise vendor and we built the business up, had a team of about 40. And I realized that here I was making things up as we go instead of, I didn’t have that manual, a franchise manual, which would’ve been a beautiful thing. And I realized we became too custom for our clients and ended up not being profitable. So here’s an example of building a business without a true path to healthy profitability and made mistakes along the way. Whereas if that had been a franchise business, we probably would’ve identified these mistakes well ahead of time and may not have gone down certain roads. So because of that, I’m all the more a believer in the franchise world.
Tom DuFore, Big Sky Franchise Team (14:20):
I love it. Well, let’s talk about the other end, a make or two you’d like to share
Jon Ostenson, FranBridge Consulting (14:25):
Make or two. So kind of keep it on the generic side or the career oriented side here. Out of college, I joined Accenture, big global consulting firm, and I hated it. Absolutely hated it. A few months in, and it wasn’t my thing, it was more technology. I’m not an IT guy, but I hung with it. And I’d say the make was, it was just grinding it. Understand there’s a season for everything. There’s time to be present where you are. And long story short, ended up getting asked to go to India out of the blue with Accenture shortly thereafter, and just had an amazing experience over there in my mid twenties. So I think sometimes my takeaway here would be oftentimes we’re looking at option A and option B, and option C comes out of left field. If we just keep moving, keep hustling and keep thriving.
Tom DuFore, Big Sky Franchise Team (15:10):
Thanks for sharing that. And let’s talk about a multiplier that you’ve used to grow yourself or your business. You’ve mentioned lots of career growth and businesses you’ve grown. I’d love for you to share a multiplier.
Jon Ostenson, FranBridge Consulting (15:22):
Yeah, I’d say a multiplier would be the Entrepreneur’s Organization. I’ve been a member of EO for a little over five years now, and that organization makes me better. Makes me a better business person, but also makes me a better father and husband and just all around and just a lot of self-development. They always say you become like the five people you surround yourself most with. And I’m very fortunate to have a great group around me that is inspiring me and giving me ideas and making me better. So a lot of credit and multiplying has come from the Entrepreneur’s Organization.
Tom DuFore, Big Sky Franchise Team (15:52):
Thank you. And the final question we like to ask Jon is what does success mean to you?
Jon Ostenson, FranBridge Consulting (15:57):
One of the things I try to live by and I fail consistently, but my North Star is to be a good steward. And so I think to those who much is given much as expected comes from the Bible, which I certainly ascribe to. And I think whether it be the time, the resources, the opportunities that we’ve been given, making most of those, leaving nothing on the table. And certainly we all have the priorities of faith, family, friends, finances, all the Fs that we think about this time of year when we’re setting our goals for that next year, but ultimately comes down to stewardship and making the most of what we’ve been given.
Tom DuFore, Big Sky Franchise Team (16:30):
That actually reminded me in your book, you talk about where the profit is going to for your book, and I’d love for you to talk about what you’re doing.
Jon Ostenson, FranBridge Consulting (16:39):
Yeah. So first off, I’d say for any of your listeners, Tom, happy to provide a free digital copy of our book. If they sign up on our website, we’ll make sure to get you an audio and then a PDF copy as well. But no, if you choose to purchase the book through Amazon or another source, 100% of profits go to Hope International. It’s a great organization, it’s a Christian-based organization, but they operate throughout the world and supporting entrepreneurs and local economies and that whole idea of a hand up versus a handout and building sustainable commerce that will better their community. So my son and I have the opportunity to go down to the Dominican on a mission trip this past summer and get to know the organization in depth down there and just really support what they do and happy to donate all proceeds from the book to hope.
Tom DuFore, Big Sky Franchise Team (17:21):
That’s wonderful. Well, before we go, is there anything you were hoping to share or get across that you haven’t had a chance to yet?
Jon Ostenson, FranBridge Consulting (17:28):
No, I think we hit quite a few topics here, Tom. I’d just say, you know what you and I are talking about before the show is we’re looking at 2023, I mean 2022, which is in the rearview mirror. Now, what a rockstar year. I mean, you and I were both very blessed to help a lot of folks in slightly different capacities, but under that same franchising umbrella, and I mean when we look at 2023, we’re both saying, I mean, I’ve never seen so much interest, so much growth, so much strong economic activity on the ground that flies in the face of everything the big media’s telling us. But all the naysayers about recession and we’re doing deals in Southern California. We’ve done multiple deals in Long Island. I mean places, they’re not getting a lot of good press these days. There’s still a fervent nature on the ground. People are excited, they’re ready to get after it. I think that bodes well for our country. So positive note right there.
Tom DuFore, Big Sky Franchise Team (18:16):
I love it. I love it. Well, and just as a quick note, what’s the best way for someone to get in touch with you, contact? How can they do that?
Jon Ostenson, FranBridge Consulting (18:23):
Yeah, come out to our website, FranBridgeconsulting.com. That’s franbridgeconsulting.com and sign up for our monthly newsletter. We put out some great content, and Tom’s got a great newsletter too. I love receiving his. But sign up for our newsletter. We’ll get a copy of our book over to you. And then if you’d like to take a next step and get on a call, I’d be more than happy to chat with you. So we’ll have my assistant reach out if you sign up for the book.
Tom DuFore, Big Sky Franchise Team (18:47):
Jon, thank you so much for being a guest and for the fantastic interview. And let’s go ahead and jump into today’s three key takeaways. So takeaway number one is that Jon’s book draws attention to the broad and diverse world of franchise opportunities beyond food. And while he says he’s not opposed to working with food, I think his emphasis here is just to let people know, especially the general franchise buyer or someone who’s thinking about franchising, that there are lots of opportunities in addition to food, not instead of, but in addition to.
Tom DuFore, Big Sky Franchise Team (19:23):
Takeaway number two is that Jon is a top 1% franchise broker, and he sees that about two thirds of his franchisees in his network are semi absentee owners that look to hire a manager that then gets trained by the franchisor and creates some kind of a side hustle to put in about 10 to 15 hours a week.
Tom DuFore, Big Sky Franchise Team (19:45):
And I thought that was interesting. So maybe you might be that next person that’s trying to be a semi absentee owner for an investment for something you’re looking into, and Jon would be a great person to talk to, or maybe you are a franchisor or you’re franchising your business and thinking about how you might need to adjust your franchise offering or the support or training you provide to accommodate a semi absentee owner. Just some food for thought there.
Tom DuFore, Big Sky Franchise Team (20:12):
Takeaway number three is when Jon said that the economy is stronger than what is being portrayed based on what he’s seen at his company. And he said he’s having franchise sales all over the country in areas where people may think might not be as hustling with new business anymore. Areas in, for example, as he said in California and Long Island and some of these other areas that are getting franchise sales too. And Jon’s sentiment on the economy is something that I’m seeing as well within the small business community also is that things seem to be really, really strong within the small business community.
Tom DuFore, Big Sky Franchise Team (20:49):
And now it’s time for today’s win win. So today’s win-win is this idea of working with franchise brokers, and it might be working with a franchise broker to help you find the right franchise for you, or it might be referring someone like Jon to maybe a friend that’s looking to get into a new business opportunity of some kind. Or it may be for you as the franchisor considering looking for another way to grow and add new franchisees into your franchise system. Now, here’s the thing that makes this a win.
Tom DuFore, Big Sky Franchise Team (21:28):
So number one is that the franchise broker, all of their fees are paid for by the franchisor, so there’s no cost to the franchisee. Number two, the second win in this equation is that the franchise candidate is going to have the opportunity to work with a third party that’s going to help source and sort and find the right franchises that they think might fit what that franchise candidate is interested in.
Tom DuFore, Big Sky Franchise Team (21:55):
So it could be lifestyle hours that they want to work, type of industry. There are lots of different avenues that go into helping identify that. And then this is going to be a win for the franchisor because the franchisor is now being introduced to a candidate that is qualified and interested in their brand, and there seems to be a better match there. So think oftentimes of the franchise broker community and someone like Jon and his company at FranBridge as a matchmaker to help match together the right franchise candidate with the right franchisor to help both of them find the right fit. And I just think that working with a franchise broker to buy a franchise can be a huge win.
Tom DuFore, Big Sky Franchise Team (22:39):
I’ve seen actually one of my closest friends, it was a husband wife team that ended up buying a franchise and they looked for about three years on their own trying to find the right franchise fit, and then they were linked up with a franchise broker and ended up finding the perfect fit for them that they opened up recently. And they’re very happy with their selection. So just an overall win for the episode today. And so that’s the episode. Thanks for tuning in. 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.
