MORE Ownership Opportunities in 'Non-Food' Franchises with Jon Ostenson: An EOFire Classic from 2022

0:01Light that spark fire nation. JLD here and welcome to Entrepreneurs on fire brought to you by high level, the all-in-one sales and marketing platform. On today's classic episode, we'll be breaking down more ownership opportunities in non-food franchises. To draw these vibe bombs, I brought John Austen in the E-Fire Studios. John is a top 1 % broker, owner, investor, and author specializing in non-food franchising. He draws on his experience as a former Inc. 500 franchise president and multi-brand franchisee in serving his clients. And today we'll talk about how success is not the time freedom you have, but what you do with that time and how a cost analyst business is a great opportunity and oh, so much more.

0:39And a big thing for sponsoring today's episode goes to John and our sponsors. Fire Nation, success isn't a solo journey. It's about who you surround yourself with. That's why I built the Freedom Circle, a powerful community of entrepreneurs ready to support, inspire, and share the ideas that move you forward. Visit freedom-circle.com to learn more. Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white label your own software. Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today.

1:25John, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Howdy, Fire Nation. Excited to be back with you. You know, something about becoming successful, along with some other like-minded business owners, you know, I've come to realize that success isn't just how much time freedom you have, but what you do with that time, what are your options? And typically to have options, you've got to have resources. Now, in order to not have to exchange your time for those resources, it's important to have passive revenue streams. And so that's one of the big areas of focus that we've had under the microscope, as well as a lot of our clients.

2:09Fire Nation, this is John's third time on Entrepreneurs on Fire. So please listen to the value bombs that A, he just dropped, but B is about to drop because I've heard from a lot of you over the past year plus who have gotten a lot of eye, not just from these episodes, but from specifically working with John and doing some really cool things. So let's get a catch up because this is your third appearance. You know, it's been a while since we've caught up and I'd love a little catch up for Fire Nation. What have you been up to? Really, it boils down to helping clients get into great opportunities all across North America.

2:43You know, we've been able to watch the vast majority of them come back and expand to additional locations, oftentimes within the first few months of operations. So great validation on that front. We recently launched an exciting initiative for our clients where we partnered with a past client of mine who we've done a couple of deals with, a guy named Nathan Bocock, largest franchise owner of Two Minute and Truck. I've seen firsthand how he's bought into other businesses and created this portfolio. And in each case, he puts a young general manager in place, sets them up for success and he's just pouring it up.

3:15And so I've now got him coaching my clients out of the gate once they make that franchise purchase. So really exciting about, you know, just setting our clients up for success with one more step. And then, you know, we, something we haven't talked about in the past, but we've been able to work with a lot of companies that are thinking about scaling and, you know, should franchising be considered as a way to do that. So we've got some great resources that we bring into play with them, but that's been another Avenue. And then finally, on the home front, as you know, we own multiple franchises ourselves as franchisees.

3:46We practice what we preach. And one of them that's just really exciting, the driveway company, great little niche business. We've recently bought out two other franchise owners, provided them with exits and just continue to expand our operation here in Atlanta. We sponsored a NASCAR with that brand and had a lot of fun just with everything that goes into of that. It was kind of a random bucket list item of mine, but we're having a lot of fun in the process. So what is that? You had a wrap on one of the cars? How does that work? We had the wrap. I took my 10-year-old son down to the pit. We got to hang out with the driver.

4:17He came over to our home the night before, and I just had a lot of fun. I'm not a big NASCAR guy, but hey, it's a great experience and a lot of fun to dip your toe in the water. Oh, I love hearing that. Now, we had mentioned just a few minutes ago that in your past two EO Fire episodes, you've really had a lot of newly minted business owners within Fire Nation, which is so cool to hear from Fire Nation, to hear their stories and their successes and just their aha moments when they understand the opportunities that are out there of like, you know, hey, it's great to go the come up with an idea yourself and go off to the races and build something from the ground up.

4:51There's also this amazing opportunity of getting into a well-oiled machine to kind of keep going on this NASCAR route and just hit the gas button, the gas pedal, and then boom, you can just start moving forward from day one. So give us some updates on what you're seeing in the overall franchise landscape at the present moment, because obviously, we're hopefully continuing to, quote unquote, come out of this pandemic. So things are really starting to pick up in a lot of areas. Let's talk about that. We are out. And if you're an American, you should feel very excited about the future prospects. I mean, we're seeing entrepreneurship live and well, all across the country.

5:24I've never seen so much interest in what we do with what I call non-food franchising. We've done deals year to date with those in their 20s, 30s, 40s, 50s, 60s. I mean, it really isn't age contained. Obviously, the 30s through the 50s, I'd say is kind of the sweet spot where most of the action is happening though. But about half of our clients are looking for full-time jumps, maybe coming from the corporate world where they will run the day-to-day business. Others are looking for a side hustle where they put a manager into place on day one. So it is a mix of those two. But I think there's some common threads I'm hearing out there.

5:57COVID has led to a lot of introspection. Many starting to look around and see success stories around them in entrepreneurship, and they're encouraged to check it out themselves. And I think there's a realization, too, as we get out there and educate that franchising substantially de-risked the startup. You know, not entirely, but it does de-risk it quite a bit. Just look at the numbers. And people are realizing, hey, if I'm a W-2 employee, that's kind of risky in itself. I'm working for someone else, and I'm at their whim and their discretion. So I think people are just having a change of mindset.

6:28You know, also, it's obvious is there's a general lack of good investment opportunities in the market. Stock markets at an all-time high or close to it. Interest rates are exceedingly low. And only so many good real estate deals to be had because we all have some real estate in our portfolio, right? But crypto as well. What is that alternative? And I think people are realizing what I call the trifecta of business ownership. You can create a cash flow. You can write off expenses that you wouldn't be able to as a W-2 employee. And then you're also building an asset that's going to have exit value down the road.

7:01So those are a few things. And I will say that the competitive landscape, I mean, it's extremely competitive right now. Good opportunities are going fast and strong markets. So I always find myself positioning my clients against other candidates for the same opportunities. And fortunately, I've got relationships with a lot of these franchisors. I'm able to use some pull on the back end to set my clients up for success and to win the deal. But it is competitive out there. It's competitive. And that's why I loved when you shared that story about how you've actually provided some exit liquidity for a couple individuals that are up there right now.

7:32And that's really cool to see that this is something that you can jump into, improve, get the business going, get it humming along. And then somebody like John might walk along and say, hey, you have really taken this to where we want it right now. So we're going to come in and give you a big check and you can walk away and maybe do something else or maybe take some time off, or who knows, maybe retire into the sunset. Let us take it from here. And one thing that we talked about on the last episode was actually the top 11 franchise opportunities across all the industries. And, you know, that was a lot.

8:02People were like shocked at how many opportunities are actually were out there. So that was really cool to get that many to understand just the breadth and width of opportunities out there. But can you share maybe just a few of the franchise opportunities across all the industries that you're seeing right here? Because I think that could be really helpful for our listeners. I'll start with the home and property services space, $600 billion market. I have not seen more interest in any other sector than home and property services, especially coming out of COVID. There's a great business. It's a painting business.

8:35Now, that's obviously somewhat of a commodity out there, and there are a lot of companies that do it. However, this painting business has a patented paint and a patented application process. What other paint company has that? Anyway, they sold out in the Canadian market. They entered the U.S. market. They're able to provide a factory finish, whether it be kitchen cabinets or the exterior of the home. And they're able to do it in a fraction of the time and provide a 15-year warranty. So talk about differentiation in a large market. These guys do it. And average investment, all-in investment, you're right around$150 ,000, including working capital.

9:10But their franchise owners are doing a million dollars a year with about a 25 % bottom line. So So neat to see kind of a unique business in a very common space. Another business, gutters. Again, these non-sexy are the new sexy in the world that we live in. People have had their minds in the gutters, you might say, of late. I've had three clients purchase this business in the past couple months. One had an insurance background. One had a sales and marketing corporate background. Another was a Wall Street attorney. I mean, these guys had no experience in this industry. but what do they like about it?

9:45They like the culture. They like the competitive advantages within this niche. And most of all, they love the numbers. Average franchise owner across their system is doing 1.2 million with about 380 ,000 dropping the bottom line. And that's again, on an average investment of right around 150. And so you kind of extrapolate what that ROI looks like and you can see why people are getting into these businesses. you know one other that i'll hit on in the home and property services it's a fencing and railing business it they've got the largest buying power of the u.s which is a benefit of a franchise that is that competitive advantage of the buying power they manufacture a lot of the product in-house which saves their owners 20 to 30 percent versus the open market so really boosts the margins and they've got national accounts like home depot they're driving constant leads for them And John, I am not lying about these numbers.

10:37These are, their averages, published, audited numbers, average first year revenue, 1.7 million. Wow. 2.8 in year two, 3.9 on average across all their owners that have been operating for a few years. And this is a 20 to 30 % bottom line. A lot of their owners are semi-absentee, meaning they put a general manager in place. They're not running the day-to-day. but they are overseeing the operation from a high level. This is some really exciting stuff, Fire Nation. And I'm just kind of challenging you as you're listening to John here to say, can I vibe with these companies? Can I see myself in these opportunities?

11:18Like how would I get up and get excited about doing X, Y, or Z and improving like whatever might be within this opportunity that you're seeing in front of you. And we have some really cool things coming up about how you can specifically find the right opportunity. We're going to be talking some more future talk with John and more when we get back from thanking our sponsors. Okay, let's talk about a platform that's completely changing how entrepreneurs are running their business, and they are also our featured partner, HighLevel. If you're an entrepreneur, coach, agency, or course creator looking to grow faster and smarter, HighLevel is the all-in-one platform that replaces your entire tech stack.

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13:13And when I scaled my business to eight figures and mentored thousands of entrepreneurs, I saw the same thing again and again. People trying to do it alone, and that's why I created the Freedom Circle. You've heard me end every episode of Entrepreneurs on Fire by saying you are the average of the five people you spend the most time with. That's not just a quote, it's the reality of success. The Freedom Circle instantly becomes your family of five and then some. It's a community of driven entrepreneurs ready to pour ideas, connections, and support into every part of your journey. So Fire Nation, if you're ready to level up and finally create freedom on your terms, head to freedom-circle.com to learn more.

13:49that's freedom-circle.com so John we're back and right before the break we mentioned a few of the franchise opportunities across the industry so if you have another one or two that you'd like to talk about please do we'd love to hear some more details and also I want to get into next what Fire Nation can do to find the right opportunity for themselves because there's a lot of opportunities sometimes people just get overwhelmed and they make no decisions so how do we narrow things down to find the right fit for us. Absolutely. So kind of rounding out, we hit on some home and property services. Let's give an example of health and wellness.

14:28Fitness has been coming back since COVID. Obviously, that landscape has changed some due to the pandemic. But I really like niches within fitness. There's one opportunity that I recently had a client buy into. She's a PhD out at the University of Arkansas. I was looking for a side hustle. And it's a business that caters to those 50 and above that are largely underserved And yet they're a growing demographic with large exposable income. And so anyway, she bought in a little under$200 ,000 to get in, much lower than other fitness concepts. It's about 1 ,200 square feet, incredible technology all throughout the business.

15:04They're averaging about$250 ,000 per location in revenue with$120 ,000 dropping to the bottom line. Now, are you going to get rich off that? No, but is it a great side hustle? Yes. Automotive. I believe I mentioned this one last time, but the oil change industry has a long road ahead, even with electric vehicles. 15 years from now, still under 10 % of cars on the road will be electric. So oil changes aren't going anywhere. There's a model that we recently had clients buy over a dozen of, and they've since come back and bought more. And what it uses is kiosks that are prefabricated, backed by an investor group, and then they use unused retail parking spaces.

15:40You've got great road frontage and drivability, super convenient, gets people in and out under 10 minutes. They stay in their car. And from an owner standpoint, you only have two people working at any given time. And all in investment, because investor groups involved, you're less than$150 ,000 per location, kicking off$330 ,000 top line revenue with about$130 ,000 dropping to the bottom line. Again, great side hustle, great opportunity to maybe open up multiple locations. locations. Two more that I'd hit on. One, it's a cost analyst business. And so for someone with a B2B sales background, this would be a great opportunity where, you know, low buy-in costs, you're able to go in and work with small and medium-sized business owners and be that cost expert where you're analyzing the vendor invoices, you're looking at different aspects of the business, and then making recommendations on ways to save on expenses because you've got a home office team that has been doing this for thousands of clients over many years.

16:41They have all the benchmarks in place and they know, you know, they've got a lot of agreements in place that people are able to buy into. So, you know, something like that is kind of a unique niche where you don't have to have any employees or maybe have very few employees, you know, over time. And then finally, you know, I'll hit on one that relates to kids, something a little bit different. I always say that people love their kids. They love their pets, their homes and their health. And, And even if a recession happens or what have you, they're still going to spend on those areas. And there's an opportunity that probably has been one of the hottest in franchising in recent years.

17:14And it has to do with kids and the martial arts. Small footprint, few employees, great recurring revenue, open only four days a week, very much a semi-absentee type business. But you think about those macro trends, alternative sports, anti-bullying. Of course, you've had the karate kid come along here recently. but it's a business you can get into for right around$200 ,000, maybe$225 ,000. And then it's kicking off$350 ,000 in revenue per year with a 48 % EBITDA margin. So call it$175 ,000 bottom line. And people absolutely love that business. Fire Nation, that's some really exciting things when you think about what do you want.

17:53I mean, I love that, hey, if you just want to get involved with the pets, I mean, there's something there because you love animals. Or maybe it's the kids because you just love that aspect. or hey, you want no employees? I mean, John was just talking about there's no employee opportunities either. So you're not like managing all these employees. There's a lot of exciting things. It really sounds like there's something for pretty much everyone and you can find that right opportunity for you when you talk to the right people. And that's what I wanna get into next is the rest of 2022 for you, John, because you've got a book release that's coming out.

18:26I mean, this could be something that people could really sink their teeth into to get that next level of education. There's a learning series. Tell us more. Yeah, I know. We're excited. We've got a lot going on this year in Q3. We are releasing a book called Non-Food Franchising. And if anyone would like to sign up for our newsletter, we'll make sure that you get a copy of that book as well. Filming a nano series for the Entrepreneurs Organization on all things franchising. So we're excited about that. Most importantly, we're looking forward to helping more people get into business ownership. I mean, as I shared previously, over 80 % of our clients end up in a field they did not expect and did not have on their radar.

19:03So once we peel back the onion and really understand what do they want that day-to-day to look like, how large of a team do they want, what kind of referral partners, you know, we really drill in on the types of businesses that would be a good fit for them. So, yeah, excited about what the balance of this year holds. We want to end with it being here. I want to get some real specific details about where Fire Nation can, it needs to go to learn more about your book, your learning series. And I also want you to start with one big takeaway from everything that we talked about here today. Like what's the one thing you really want to make sure Fire Nation gets from our entire conversation, then move into specifics about where we can go for the book, the learning series, all that jazz, and then we'll say goodbye.

19:43If you're interested in exploring business ownership and franchising, you can certainly Google around. But what you're going to see is brands putting their best foot forward. I mean, they're going to not provide that understanding of what's going on behind the scenes. You're simply reading the marketing messaging. And what we're able to do with clients is we've got those relationships. We know what's going on behind the scenes. And to work with us, it's entirely free. There is no cost at all. We get paid by the franchisors on the back end. None of that, not a dime gets passed on to our clients in any form or fashion.

20:12And what we've done, we've taken 4 ,000 brands, taken out those in the food and lodging space, narrowed it down to roughly half. Then we vetted those franchisors. And you constantly have new brands coming in, but we look for the leadership teams, for the models, for the unique niches they operate in. And then we narrow that down for our clients to those that are available in their area that really match up. And it's a very streamlined process that we have that I'd be happy to walk clients through. But it's just proven successful time and time again. And so it does appear to be the best way to go about your search.

20:45So more than happy to connect with any and all of your listeners as we've been doing. Just a great audience that you've built up JLD and have engaged so many and helped them find those business ownership opportunities. They're the perfect fit. But I would invite everyone, come out, come to our website, FranBridgeConsulting.com. Join our email list. We come out with a great newsletter once or twice a month. We'll send you a copy of the book once it's released. And then if you want to take that next step, if you do want to set up, let's say, a 10-minute call, reach out to me at john at franbridgeconsulting.com.

21:19No H in John. John at franbridgeconsulting.com. And I would love to just jump on a quick call. Let's talk about your situation and whether franchising may make sense for you. And then if so, what would those next steps be? And then lastly, I'd encourage everyone to start thinking about are you in a position where you'd like to go full-time or is it a side hustle? And if it's a side hustle, are you open to hiring a manager out of the gate? What does that look like? Who is your network? Where do you see areas in your market that may be underserved or in turn overly penetrated? So start collecting those thoughts and bring them into our first call.

21:53Fire Nation, you're the average of the five people you spend the most time with. And you've been hanging out with J-O and J-L-D today. So keep up that heat and head over to eofire.com. Type John, J-O-N, no H, in the search bar. His show notes page will pop up as well as the prior two episodes, which were both fire as well. John, one more time, just actually spell out the URL so we get that locked in the listener's brain, and then we'll say goodbye. Fran, F-R-A-N, bridgeconsulting.com. Feel free to Google it. You'll find us. Franbridgeconsulting.com. John at Franbridgeconsulting.com. Fire Nation, head over there.

22:31Make it happen. John, I want to say thank you for sharing your truth, your knowledge, your value. once again for the trifecta with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Hey, Fire Nation. Today's value bomb content was brought to you by John. And Fire Nation, are you ready to rock your very own podcast? Well, check out our free podcasting course where I will teach you how to create and launch your podcast for free. Freepodcastcourse.com. I will catch you there or I'll catch you on the flip side. Fire Nation, success isn't a solo journey. It's about who you surround yourself with.

23:07That's why I built the Freedom Circle, a powerful community of entrepreneurs ready to support, inspire, and share the ideas that move you forward. Visit freedom-circle.com to learn more. Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white-label your own software. Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today.