Why Non-Food Franchises are the Perfect Portfolio Building Strategy with Jon Ostenson

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Creator Science. Today, we'll be breaking down why non-food franchises are the perfect portfolio building strategy. To drop these value bombs, I brought John Ostinson into EO Fire Studios. John is a top 1 % franchise broker, consultant, investor, and author of the book, Non-Food Franchising. He draws on his experience as a former Inc. 500 franchise president and multi-brand franchisee and serving his clients.

0:39He is a frequent contributor on franchising for Forbes, Inc., Bloomberg, and the Franchise Journal. And today we'll be talking about what's going on in the non-food franchising world. We'll be talking with a successful franchisee and what's going on there. Have some great conversations, some great questions. And a big thank you for sponsoring today's episode goes to John and our sponsors. Artificial intelligence has made a splash in the headlines and for good reason. The digital landscape is changing quickly and AI is a huge part of that. If you're feeling behind the curve, don't worry. HubSpot has got your back.

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1:55Find out more about how to use AI to grow your business at HubSpot.com slash artificial dash intelligence. John, say what's up to Fire Nation today and share something that you believe about becoming successful that most people disagree with. Fire Nation, it is great to be back with you, JLD. Congratulations on the recent announcement, the addition to the family. Very exciting. So something that people oftentimes overlook about being successful. I'm a part of a mastermind, and we were recently out in Oklahoma City at the headquarters of Hobby Lobby. We spent a full day with David Green, the CEO.

2:34This guy has built an$8 billion business, 1 ,000 store locations. And the two topics that we covered that day were stewardship and family legacy. Now, that's not what most people would think a successful person would be focused on, but that's where he's focused. He is a humble man and has impacted the lives of so many and will continue to through the future generations that he's set up with vision and mission and values. And so really, that just gave me this great vision of what I can do with my family. And really, that's my North Star. I miss it every day, but I strive toward really living out stewardship and being faithful with the resources that we have.

3:13And to me, that's what true lasting success looks like. Well, John, you have been rocking it for quite some time. And as many people within Fire Nation know, you are an annual sponsor of Entrepreneurs on Fire. You've been a guest multiple times. A lot of people within Fire Nation have had fantastic opportunities to exceed in life, thanks to you. So I love the conversations that we get to have. And in fact, we have a nice special guest here today that's going to be sharing some pretty cool things with us. But before we get into that, I want to talk about the first half of 2023, because it's been an interesting six months.

3:51I mean, it rarely is uninteresting in the world that we live in today. But, you know, the first half of 2023 has been interesting. So let's talk about what you've seen and what you are currently seeing in the world of non-food franchising. JLD, you know, it's been a great partnership. Thank you for everything. I will say this. Entrepreneurship is alive and well across North America. We are doing placements from L.A. to New York, Seattle to South Florida. A lot of cities that don't get a lot of positive headlines out there in the news. Entrepreneurship, what's going on on the ground, alive and well.

4:23We have a record level of placements in the first half of this year. Really encourages me at where our country is moving and where Canada, North America in total. Just continue to see interest. And we see a variety of backgrounds getting involved in businesses such as in-home health care or youth sports, pet services or various construction oriented niches like we've talked about in the past, you know, those property services, you know, non-sexy, cash flowing, recession resistant businesses. We've also had a great response to our new book, Non-Food Franchising. And certainly if any of your listeners haven't gotten a copy yet, reach out to us on our website for Ambridge Consulting.

4:59We'll make sure that you get a free copy as well. And then finally, on a personal note, I recently pulled the trigger on two more franchises myself, you know, with my own investment portfolio, got into a great pavement, coating, line striping business up in Minneapolis, and then into a custom orthotics and footwear business just outside of Miami, where we have great demographics for a business like this. And that orthotics business is actually one of a very small handful of opportunities where the franchisor will run the business for you. It's a truly passive model, very rare, but there's four or five companies out there doing it today.

5:33As you can imagine, that's been wildly successful with our clients. That's so cool. I love hearing about all these success stories because, you know, as you kind of alluded to a little bit, I mean, in this world that we live in today, you know, that phrase, if it bleeds, it leads is so true. I mean, people are looking to talk about the disasters that are happening, you know, whether that be political, whether that be, you know, world stage wise, whatever that might be, like people are always seeming to harp on what is shocking and terrifying people. but there's so many amazing things that are going on.

6:04And of course, that's one thing that Entrepreneurs on Fire is, is a place to talk about successes. Of course, we talk about failures too, because that's an important part of the journey, but we love talking about those successes and the struggles and the obstacles and the challenges that are turned into amazingness down the road with these fantastic entrepreneurial stories, journeys, businesses, et cetera. And that being said, John, we're doing something that we've never done before, you and I specifically, is we're bringing on a guest today, somebody who you know and somebody that you wanted to bring and introduce to Fire Nation because there's something really cool when you share a success story or when I share a success story, but it's something even next level cool when we can bring somebody that's maybe heard about you from Entrepreneurs on Fire or has connected with you through various channels, has gone through the process with FranBridge and now they're rocking and rolling.

6:59So make that introduction, John. Yeah, no, excited to have Nathan Bocock with us today. He is a true rock star, and I think he's an inspiration. And I can't wait for Fire Nation to get to listen to him and his wisdom. So Nathan and I met a couple years ago, helped him get into a waste management-related franchise. Since then, we've done several deals together. And Nathan's become a really great friend, one of my all-time favorite clients. I brought Nathan on the show because he's really a good case study of what many of our clients are working towards. He's the CEO of Gray Fox. He's got a lot of different entities and interests going on out there, but he's had great franchise success.

7:35He's kind of done what I call franchise stacking, where he's taking two men in a truck moving service, and he's taking several businesses in the property services space. I think he has 30 different territories in which he operates. Oftentimes, they're congruent, but does over$30 million a year just in his franchise portfolio. and he's built what I call a portfolio effect where a lot of these businesses have synergies within each other. He builds up an organization, promotes young talent to bigger areas of responsibility and then really grooms them. And he actually coaches some Free Enbridge clients as well and they've been very appreciative of that.

8:10But yeah, he's here to drop some wisdom on Fire Nation and with that, I'll turn it over to Nathan. Well, I do love that. I want to jump in here real quick because I want Fire Nation to really understand that Nathan is just a person, Fire Nation, that at one point decided to take action, to stop just hearing about the successes of others and hearing about opportunities and seeing opportunities, but actually say, you know what? I'm gonna plant a flag in the sand and I'm gonna go out and I'm gonna take this risk. I'm gonna try this. I'm gonna see if this works. And he put action. He put one foot in front of the other.

8:43Action was what he took day in and day out. So with that kind of setup, Nathan, tell us a little bit about your journey. And then, of course, what led you to get into franchising? And then, of course, where you are today with that amazing portfolio. Well, thank you, JLD. And thank you, John. And hello, Fire Nation. It's an honor to be here today with you all. You know, my story started in the early 2000s in the insurance business. And I'd been in the industry for a while. And I was getting ready to become a partner in the firm that I was with. And a lot of times, if you make it five years in the insurance business and built a book, then you're good to go.

9:20And that's kind of your path for the rest of your life. And I remember sitting in my office one day thinking, you know what, I think I care more about running this agency and the way this agency runs than I do about selling and building a book, a business. And that was kind of a pivotal moment for me to say, okay, am I where I want to be? Am I where I'm supposed to be? And so the move into franchising was initially with two men in a truck. I did not get into Two Men in a Truck because I was interested in franchising. Frankly, I knew very little about franchising at the time. I'm really glad that I went into a franchise, but Two Men in a Truck was a business, a non-sexy business that everyone needs and that everyone is going to need as long as we have things.

10:07We just seem to have more and more things every day, it seems like. Once I got into franchising, I started to understand the power of a strong franchise system. And it really, the first thing I noticed was that it was going to give me the ability to scale faster than if I had Nathan's moving service. And so I really kind of grabbed hold of that with two men and said, I want to build a portfolio within this brand because it's got a really good reputation. It's been around since 1985. And really, I've spent the last 13 years, years doing that throughout kind of the Southeast. I got to know as many people as I could.

10:49And I kept running across great people, you know, in the early phase of that journey and even to today. And what happened was I met folks that wanted to get into business for themselves or wanted to partner in the businesses. And it kind of led me to a problem, a good problem, but I had people that wanted to do things and I didn't have positions for them in the organization. Um, and so that's what led me to diversification and looking outside a two minute truck. And that's what kind of led me to John. And when I got to know John, I saw opportunities and other good brands that I didn't know anything about.

11:24You know, John didn't need to talk me into non food franchising that had already been my life for a long time, I believe in that type of franchise. And so since then, I've been involved in six different brands across six states. So now we run a holding company called Grayfrog Strategic. We do, like John said, we do roughly $30 million in top line. And we're continuing to grow and expand in all of those brands. And John, before we go to a quick break, is there anything you want to add to the journey and the story that Nathan just shared that could be really impactful for our listeners? You know, we could spend all day with Nathan.

12:00I think the way he looks at businesses, the way he thinks about businesses, you know, the way he coaches his team, it's so strategic. So we'd love to unpack some of that when we get back. Absolutely. Fire Nation, don't go anywhere. We'll be right back as soon as we thank our sponsors. Success Story hosted by Scott D. Clary is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business startups, and entrepreneurship. One of Scott's recent episodes was with none other than Jack Canfield, where they discuss adapting to life's twists and turns.

12:39Listen to Success Story wherever you get your podcasts. So we're back. And Nathan, you shared a little bit about your journey before the break, which was awesome, just to kind of see that progression and see that realization that you had of like, you know, I want to diversify, which led you to John with Franbridge and like all these other opportunities that came. And now you're running this massive portfolio that we've mentioned and you advise a lot of early stage entrepreneurs now, which is so cool. And frankly, my audience, Fire Nation, they are early stage entrepreneurs. Some people are further down the road.

13:12Some people haven't even taken a step down that road. And some people are in that kind of beginning stages of like, okay, what is an opportunity that I can really sink my teeth into? So what advice do you have for Fire Nation, those listeners today that are looking to follow in your footsteps? That's a great question. There's a lot to it. We could spend a lot of time on it. I really think of advising kind of early stage entrepreneurs in really kind of three parts. And those three parts are mindset, kind of talent, and then investment criteria. And really mindset, I think for me, and I've heard some of what you all have been able to do with EO Fire and everything John's doing.

13:59And to me, like when I talk to early stage entrepreneurs, I ask them what they want. And most people say they want income or more income or they want autonomy or they want flexibility. And they seem to always reference someone that they've seen or a podcast they've heard. And I think all those stories are great because they're inspiring. But I think, and you all may agree with this, The problem a lot of times is that when people are coming across entrepreneurs that have inspired them, they haven't seen the past 10 years of building that company. They see the rewards of what's paid off, but they haven't seen the early stage.

14:38And so a lot of times what I really want to get to the bottom of what people is not like, what do you want, so to speak? And that's important. It's important to go after what you want, but why? Why do you want it? And people have a hard time answering this question. They almost answer it with the same answers to the first question. Oh, because it's nice to have income, or it's nice to be my own boss, or it's nice to have flexibility. and frankly I used those same answers in the early days but I think and I think those can be valid reasons to some degree but I think they're more byproducts of running a successful business and if those are the main reasons that you're getting into business especially if you're early stage in your company or you got a startup or you're a founder like you can be disappointed for the first few years because it can take a while, right?

15:30Like you all said it on the program before, it takes time. It takes commitment. It takes day in, day out work. It takes quick decision making. You know, I think it takes selflessness, right? Putting the needs of your team, your customers in front of yourself. And frankly, it just takes work every day. To dig deeper, I think, you know, what gets you out of bed in the morning? And what do you think about when your head hits the pillow? So for me in the early days, I was the same way. I just wanted to go make money and have flexibility. But I realized about halfway through this journey that at the core, I'm a builder.

16:04I'm creative, I'm a builder, and I'm an approver of things. And so every day, my mindset is, how do I improve the top line? How do I improve the bottom line? Like good growth, sustainable growth. How do I grow people? And how can I grow into other brands and other businesses. So that's kind of the mindset piece of it, how to build something great. And that's what, like I said, gets me out of the bed in the morning. The last thing to kind of say about mindset is, in my opinion, there's rarely such a thing as absentee ownership. For me, ownership is a mentality. And if you're absent in the mentality department there, as far as ownership, then you really don't have business owning a business.

16:48but there's ownership and there's working along good management teams but at the end of the day if it's your business and it's your responsibility and you really have to think of it that way as we were scaling and growing the company talking about good management teams one thing we decided to invest in early was people and we actually with our investment strategy we kind of reverse engineer new businesses and new startups most people start with a brand or they start with the business and they buy that business or they decide to go into that business and then they're on the hunt to find someone to run it.

17:22So we kind of operate in the reverse. So we try to identify someone that we feel like has that entrepreneurial spirit and drive that wants to work alongside of us within our methodology. And then we try to go identify an opportunity for them. And that's worked really well for us. Every single person that runs a business unit for us in all of our brands has autonomy over the P &L, and we let them make decisions that they need to make. And we hold them accountable, but we really coach them up and try to coach them into making the profit that we want to. I think it's also important when you're talking about talent in your business, you know, if you're starting a company or buying a company, you really need to get in there day one and work alongside the management team or the leadership team, or you need to be the manager of that business and kind of create the playbook for your successor as a GM to kind of take it over and run it.

18:17To me, that's motivating for your staff. It builds a teamwork atmosphere. And to me, that's the most sustainable way to grow it. And the last thing I would say is investment criteria. You know, it's different for everybody and should be different for everybody. Obviously, it depends on, you know, how big of an organization you want, what your exit plan is, what your risk tolerance? What's your cash position? What sort of industry do you like? You know, when we look at investment criteria in franchising specifically, we have some non-negotiables. And those non-negotiables are strong management teams, strong track records in the brand already, both from a top line and net free cash flow perspective, and strong marketing teams.

18:58Because when you get into franchising, the brand a lot of times, the brand and the systems is what you're looking to invest in. And the brand, obviously, is what's going to drive lead flow. And so you want good marketing teams at the franchisor. The good thing about working with John has been that I think he and I kind of have the same viewpoint of how we find value in franchisors. And the thing I like is he does a lot of the front-end research for me because, again, I think he has the same non-negotiables that I do, and especially in the strong management team area of that. So, John, I want you to follow up in a second here with one of your bigger takeaways from what Nathan just shared.

19:36But I was sitting here just being like, okay, mindset, talent, investment criteria. Let's see how this breaks out. And of course, many value bonds are dropped across these three things. One thing that really jumped out to me was the talent aspect. So I do want to circle back to that for you, Fire Nation, because I love how Nathan said, most people start with a brand or a business, but Nathan starts with the people. He finds the talent and then he finds the fit for them. Because then guess what, Fire Nation, you can be so much more well assured that that individual is going to have passion, drive, motivation to run that business to the best way possible without you having to be there micromanaging day in, day out, which is, of course, a lot of what many of us are trying to do.

20:23So, John, from all that great content that Nathan just shared, what was one of your takeaways? Yeah, absolutely. Same with you, JLD. It's the people. And it can be the people that you hire. You know, we do have a lot of clients that will find the opportunity first and then find the right person there. And we have a recruiter that helps them find that general manager. You know, but certainly if you have someone in mind and then kind of find the business that fits them, if they're on board and they're sticky and they've proven themselves, then that can be a great way to go. So definitely love that.

20:51And again, his track record speaks for itself. But the other piece of people would also be the franchisor. Now, I've been a franchisor myself. I'm a multi-brand franchisee. And I put so much weight, not just in the financial model, not just in the competitive advantages of the business, but in that franchisor leadership team. The older I get, the more I invest in people. That is so important. That's your business partner in franchising. So totally resonate with that with what Nathan said there. John, totally agree for all those reasons. And let's talk about Fire Nation now because they're hearing Nathan's success.

21:24That's awesome. They're seeing what it could look like to go through my set talent investment criteria. What should be our listeners next step now? Easy step. We've talked about it. Come out to our website. We'll send you a free copy of our book, Non-Food Franchising. That's a great primer, great place to get the juices flowing. and educate yourself a little bit more on this world of franchising. And then if you'd like to take a next step, like so many EO Fire listeners have, just book a call with us. I'll have our assistant reach out when we send the book, ask her to book a call. I would love to get on the phone, help in any way I can.

21:58But as you know, we work with over 600 different franchise companies. But once we narrow that down to what fits your criteria, what we're seeing in the market, the strength of the franchise or leadership team, financials that go into that, really it narrows down and filters down to roughly 10 or 12 opportunities in your market that if we're in your shoes, here are the ones we want to be looking at. So we've really streamlined our process to get you in front of the right opportunities in a very streamlined way. But we'd be more than happy to help even more EO Fire listeners. You know, Nathan's a great example.

22:32I love his case study. And part of the reason I want to have Nathan on, and he's extremely humble. I mean, his successes have been huge. And this is a guy, he spends time with his family. He's driven by values. We didn't get into some of that today, but this is a good, good guy outside the business and inside the business. And I just have a ton of respect for him. And we have so many other EO Fire listeners that are on the road to the portfolio approach. We had a guy in Philadelphia just last week, come back and buy another franchise. He bought one back in the fall, has a great manager in place.

23:00He said, Hey, John, I'm coming back for round three later this year. So, you know, everyone's at a different stage. You got to start somewhere. And the same way you said at the beginning of the show, JLD, you got to take action, get off the couch. We've made it very easy to put a toe in the water and kind of get to the point of eventually swimming. But we've given you a great jumping off point. Would love to help. And what is that call to action if people want to jump on a call with you? Come out to FranbridgeConsulting.com. You'll have a pop-up that asks you if you'd like a free copy of the book.

23:28Share your email address. Our assistant will then reach out with a link to multiple versions of the book if you want audio or if you want PDF. Certainly, if you buy it on Amazon.com, all profits go to a great nonprofit that we support, Hope International. But when our assistant reaches out, just let her know that you'd like to hop on a call. She'll send you a link to my calendar, and we'll make it happen. Nathan, you've dropped a ton of value bombs. Give us the one takeaway you want our listeners to get from today's conversation. You can't do this on your own. it's an okay thing. Surround yourself with people who are smarter than you.

24:02Surround yourself with people who know things you don't know. Know what you don't know. Focus on what you're good at and work as a team to build something big. Fire Nation, you are being given the gifts of an opportunity to literally jump on a call with somebody like John, who has the connections, the experience, the know-how to get this ball rolling for you. FranbridgeConsulting.com. Get that process moving because you're the average of the five people you spend the most time with. You've been hanging out with John, Nathan, and JLD today. So keep up that heat. For links to everything we talked about, eofire.com, type J-O-N, John, in the search bar.

24:39The show notes page will pop right up. John, Nathan, thank you both for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Hey, Fire Nation, a huge thank you to our sponsors and John for sponsoring today's episode. And Fire Nation, are you ready to rock your very own podcast? Check out our free podcasting course where I will teach you how to create and launch your podcast for free, freepodcastcourse.com. I'll catch you there or I'll catch you on the flip side. Artificial intelligence has made a splash in the headlines and for good reason.