Getting Into Franchising with Jon Ostenson

February 24, 2023

Getting Into Franchising with Jon Ostenson

February 24, 2023

About This Episode

Franchising is a word that you hear a lot in the entrepreneurial space, and it has become synonymous with the fast-food industry. However, there’s a whole world of franchising out there that involves non-food industries. That’s what Jon Ostenson, our guest for this episode of SUCCESS magazine’s Brilliant Thoughts podcast, discovered in his years in the industry.

Before Jon became the CEO of FranBridge Consulting, a company that works with over 600 different franchise companies in the US, he was the president of the ShelfGenie franchise system on the franchisor side. 

Over the years, he’s seen an increasing interest among clients getting into opportunities ranging from “boring” businesses like property services, gutters, insulation, dumpsters, health and wellness, fitness, oil changes, and industries around kids, pets, the aging population and all these sectors in which entrepreneurs can thrive if only they have the model to step into.

Franchising vs. Startups

“If I want to start a business, is it better to get a franchise or create my own startup?” That is one of the questions a lot of us have probably thought about. If you are the type who wants to reinvent the wheel and create a new model or want to realize an idea for a new product or service, startups might be more your game.

But if you are looking for an opportunity to invest your capital and generate revenue without having to build your own products, services, systems, and models, franchising might just be for you.

“…the fact is more than 92% of franchises are still in business after five years, which is more than three times that of a traditional startup,” Jon tells us. In franchising, the system and the model are already built out, as well as the marketing playbook. You get support teams. You get a coach on the sidelines, and the franchisor will provide all the help you will need, because “the better you do, the better they do,” he adds.

“So, you're in business for yourself, but not by yourself. That sounds very cliche, but it's true. You've got a community of other owners that are living the same thing day in, day out,” Jon says.

Since the model is already built out, you can buy franchises in bulk, allowing you to open multiple businesses at a time—all that’s left is for you to execute it. Aside from building a business with good cash flow, you are also building an asset with good exit value down the road.

“…Oftentimes with the startup, you're questioning product market fit or whether there is a path to profitability. With the franchise, it's been proven out or else you wouldn't be buying into it. And so, you know what that path to profitability looks like. It's all about going in and executing,” Jon shares.

It is not a passive source of revenue, you still need to put in the work, or at the very least hire someone to manage the business for you, but it is a great way to expand your portfolio, generate capital, and get ideas about what works and what doesn’t in the market, which can all be beneficial if you decide to create your own startup.

What makes a successful franchise?

Of course, franchising isn’t for everyone. 

The people who perform well in franchising are those who are willing to follow a system instead of reinventing it. After all, the reason you buy into a franchise is that if the system. You need to love the idea of executing the existing model to succeed in franchising.

The great thing about franchising is the ease with which you can build your portfolio. As long as you have the capital and the manpower to invest in a franchise company you like and whose system and model you believe in enough to confidently execute on it, you have the option to either stay in a segment you know or diversify your asset class.

If you are an entrepreneur looking to franchise your business, understanding your niche, your market and their needs, and building a model that scales and provides value to your market is necessary. 

But it is the people who are the key piece to success in any business, whether franchise or non-franchise.

Getting the right people in the right seats and retaining them is important, but the most crucial piece is providing them the support to do their best. The better your people do, the better you do in business.

Lastly, continuously putting yourself out there and exposing yourself to different industries, expanding your network, and learning more about different markets help entrepreneurs expand their horizons and see opportunities they never considered before—the boring and non-sexy businesses. 

Why non-food franchising?

When asked why he decided to go into franchising, especially in non-food industries, Jon answers, “I'll be honest. It found me. I didn't find it.”

During COVID, and now the concerns of a recession, entrepreneurs are more sensitive to businesses that are “recession-proof”, “COVID-resistant” or more resilient. 

“Ultimately, what kind of business do you want to own if the economy goes downhill? It's, you know—think about what you're personally going to continue to spend on. You're going to spend on the things you care about,” Jon says.

Industries such as health and wellness, senior care, pets, kids, and the like are among these categories. But so are service industries such as insulation, pipes, gutters, dumpsters, road paving, construction, and other similar businesses.

Things break, Jon says, and renovations are always going to be there regardless of industry, and these “anti-trendy” yet resilient businesses are worthy investments to add to your portfolio.

It is the highly-fragmented, highly niche businesses with well-built financial models and systems that make it far in the non-food franchising industry.

Follow Jon Ostenson

You can learn more about Jon and his business on his website, Sign-up for their monthly newsletter and get a free digital copy of their book, both audio and downloadable PDF.

You can also buy Non-Food Franchising on Amazon, where 100% of profits go to Hope International.

DISCLAIMER: The people interviewed are well-trained experts and highly skilled in their areas of practice. They take many safety precautions prior to attempting the activities described. The activities or research discussed in these podcasts should not be attempted without qualified supervision and training with professionals.

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