Sponsor Message From Zoho

Tom DuFore 0:00

The most successful franchises share one thing in common. They're never satisfied with where the business is today. They're always thinking about the road ahead. That ambition is the fuel that drives growth, and Zoho's business software is the engine that gets you there. With the right technology, your franchise won't just run better. It'll move faster. Candidates will progress through the development pipeline more quickly. New locations will open on schedule. Decisions will get made based on better data and better insights. Zoho gives every size and style of franchise the power to move faster without breaking what works. Whether you're a single location operator building a portfolio, a multi-unit operator scaling across brands, or a regional franchise or growing into a national network, Zoho grows with you every step of the way. Built over 30 years, Zoho's software ecosystem can be configured to match how your franchise actually works. CRM, operations, marketing, HR analytics, and more all designed to work together from the start. The more of your business that runs on Zoho, the more connected it gets. Head to zoho.com slash franchise to learn more about what Zoho has to offer. That's zoho.com slash franchise. And now back to the show.

Franchising Meets ETA Explained

Tom DuFore 1:14

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 Dufour, CEO of Big Sky Franchise Team. And as we open today, I'm wondering if you have heard of this concept called entrepreneurship through acquisition. And how does franchising compare to this type of growth strategy? Well, our guest today is John Austinson, and he shares with us the insights that he's gained over the years in franchising. Now, John is the CEO of Frambridge Consulting, a firm ranked on the Inc. 5000 list in 2024 and 25. John is a top 1% franchise consultant. You heard that right. He's a top 1% franchise consultant, also known as a franchise broker, who helps thousands of investors diversify their portfolios through over 600 high-growth non-food franchise opportunities. His work sits at the intersection of smart investing, scalable business ownership, and risk managed wealth creation. I'm so excited to have John back on the show. He's someone I've had the great chance of working with for several years in franchising. I just think he's wonderful and does great work out in the world. So let's go ahead and jump into my interview with John Austinson.

SPEAKER_01 2:37

Yeah, John Austinson, founder of Frambridge Consulting here in Atlanta, Georgia. Work working with clients all over the country, helping them step into business ownership through what I call non-food free and trusting.

Tom DuFore 2:47

Perfect. Perfect. Well, John, you are a repeat guest, which is a rare opportunity to have a guest back. And today I'm excited to be talking about this idea that you were telling me about pre-show of entrepreneurship through acquisition and the rise in interest in this and some of the things that you're hearing from your

Why Buying A Business Takes Years

Tom DuFore 3:09

perspective. So I'd love to start with what's this idea of entrepreneurship through acquisition?

SPEAKER_01 3:14

Yeah, it's a popular term these days. You'll hear it referred to as searchers, ETA. The idea is buying existing business, right? And there's so much, you know, oftentimes good content out there. You know, a lot of talking heads and personalities that are getting getting out saying, hey, go buy a business and then build it from there. You know, I think that could be a great proposition if you find the right one. From where I sit, I have conversations literally every day, oftentimes with people that have been looking for an existing business for three or four years. And one of my friends actually hired two full-time analysts to go find a business, and it still took them two years to find one. Now, every now and then you have an exception, but by and large, it takes a long time. All that time could have been spent building a business. And so I think a lot of people, you know, I call them wannabreneurs, and no offense to them, but they feel like they're in the game because they're having conversations, they're submitting LOIs, they're um, you know, looking at different business listings, but they're not actually building a business. They're not in the game. And so I love franchising because it allows you to take a proven business model and step into it, but put your thumbprint on it from day one. You know, you're building your team, your culture. And I think that's one of the things that oftentimes people overlook is when you buy an existing business, you're inheriting someone else's team, right? And their culture. And we all know that when you have a change in ownership, you may lose key employees, you may lose key customers and clients. And oftentimes that gets overlooked because you're paying a premium for that business, assuming everything's going to stay the same. You know, it looks great on paper. You know, whereas for me, I love franchising because it allows you to get in the game and it gives you a platform to build off of. You can still go buy an existing business down the road. You can start a business, you can do what I call franchise stacking, come back, buy in another franchise brand, but allows you to get in the game. And one common approach, Tom, and I'm giving you a long answer here. One common approach we see is once you become a franchisee, you're going to get first line of sight into any other franchisees that may be selling their business. And we have client after client that have gone that path where they've expanded via buying other franchisees' businesses. You can kind of hit the ground running then. So that can be a great opportunity. I actually wrote an article in Forbes last week called franchising versus entrepreneurship through acquisition. So would encourage everyone to go out and check that out as well. I think that could be a helpful resource.

Franchise Stacking In The Real World

Tom DuFore 5:27

We'll make sure we dig up the article and post it in the show notes here so someone can click on that and and go right to that. And it's interesting what you talked about with someone that starts with a franchise, that they're able to grow beyond that. You mentioned someone at a franchisee getting first opportunity to maybe buy other franchisees out that are ready to exit within that franchise system. So I'd love to talk about this idea or concept of franchise stacking or this idea behind that. So it seems like that could go a bunch of different ways.

SPEAKER_01 5:59

It can. And some of our clients will come back and buy additional franchise brands that complement their first one. Some will buy brands that you know totally diversify. You know, I'll give two examples. We had a client recently, the uh couple in the Dallas area that got into youth soccer a couple years ago, had a lot of success. Two years later, they came to me and said, Hey, John, we're right for our next thing. We've got a good team in place running the business. And end of the day, they ended up going with a business that provides like what I would call digital billboards, essentially TV screens that go in the waiting rooms of oil changes and doctors' offices and such, where local companies advertise on there and then they get a cut of those. So it's kind of a cool model. They felt like there could be some synergy with what they're currently doing, but it's also a very different business. One where it would be more complimentary would be our clients in Boise, Idaho, that got into two business partners, got into in-home senior care and came back to me, I think it was three or four months after starting and said, Hey, John, what's a good complimentary business? I introduced them to one that provides wheelchair ramps and stair lifts and mobility solutions, you know, where they can kind of retrofit the home to allow people to age in place, was obviously a great compliment to the in-home senior care business. So, you know, in the one third example, just because I love this story. It's a client of ours that's a little further down the track than than most, but my client Nathan is the largest franchisee of two-minute truck moving service, operates in probably a dozen markets. And in his case, he's kind of done both. He um, you know, has acquired other franchisees in the system over time, building up this large book of business around a dozen different markets. But then he also comes to us every couple of years and says, Hey, John, I've got a young guy in my organization that's doing a great job that I want to promote. What's a good franchise for them to step into, you know, have introduced them to ones that he's then placed people in. And what's cool is since then, I know in at least one of those, he's actually bought other franchisees. So it's kind of like rinse and repeat, you know, with that business model.

Tom DuFore 7:44

Very interesting. Well, I love this idea, and it's something I haven't talked a whole lot about, but hearing you describe this and share this, you're on the front lines of a lot of this information that before it's a trend, you're seeing it happen, right? You're seeing it early before some of these trends start to occur. Is I was listening to you, it made me think about this idea of as someone buys the franchise, they're viewing themselves more like a mini private equity group or venture capitalist, where you know it might not be hundreds of millions of dollars that they're working with, maybe it's hundreds of thousands or seven figures that they're working with for investment in the beginning to get this going. It made me think about that. And I'd just be curious what your thoughts are with that idea.

SPEAKER_01 8:30

You're

Thinking Like Micro Private Equity

SPEAKER_01 8:31

exactly right, Tom. And I think that's a good way of putting it. I mean, end of the day, private equity loves franchising, right? They love the franchise model. I was speaking at a conference last summer in Cincinnati, and one of the private equity firms that was presenting there alongside me said, hey, it's sexy for franchises, for PE firms to have franchises in their portfolio. They just love the business model. And you are seeing that play out on a micro scale too. A lot of our clients, you know, many of have a financial background or maybe they've been a part of a PE shop and they say, hey, I kind of know how it works. I want to go do this on my own. But, you know, in some cases, they'll raise some capital. Like I've invested in a few of our clients on the capital side where they're they're more the operating partners, but you know, they've got a vision of you know, building a portfolio over time. And so no, I I love that. I always encourage people to think about what's right for the next season for them personally. You know, what's going to provide that platform that can then take them to where they want to be. And with franchising, you get that optionality. Again, two years into the franchise, you may have a chance to buy another franchisee. We actually had a client that got into a pool cleaning franchise probably three months ago. Literally a month later, she was talking with another franchisee and just acquired him a couple of weeks ago. And this was a big deal that she did. So you never know where it will come when that opportunity will be there. But whether it's acquiring other franchisees, buying additional franchise brands, or acquiring existing businesses or starting new businesses, you know, you have the options and you're in the game, is my point. Like let's get off the sidelines, let's get in the game.

Semi-Involved Ownership That Works

Tom DuFore 9:54

Well, what have you found as you work with these clients and go through this process, this idea of semi-passive ownership? Because thinking about someone that maybe a more conventional or traditional type franchisee, they come in, they own and they operate it for years, and that's kind of what they do. But now, as we're talking about this franchise stacking, how have you found franchisees have success in this arena?

SPEAKER_01 10:18

Yeah, great question. It's kind of the age-old question. I tell my clients, at the end of the day, your competition is not going to be semi-passive. They're not going to be semi-absentee, right? They're going to be trying to win business, and you better have a, you know, put your best foot forward. So a lot of franchises do market themselves as semi-passive, semi-absentee. I always tell my clients, I like to call it semi-involved. I think that's a better term. The fact is, half of our clients will go owner-operator out of the gate, usually with the eye on eventually replacing themselves. The other half start out with that semi-involved or executive model, as we call it. The idea is you put a manager in place to run the day-to-day while you keep your day job or you keep your current business uh focus. That could be tremendously successful. We have so many client case studies, but Tom, it comes down to having a good operator that you put in place. If you have a good operator and you've got a good franchise or and I say good because not all franchisors are created equal, that's where we come in to try to help. But a good operator and a good franchise or that franchise or can carry a lot of the daily support water for you and allow you to be very hands-off. I, you know, I know it, I flipped it. But if you don't have the right operator, you're gonna have a lot of headaches and you're gonna find yourself leaning in until you do. So I just never want to sugarcoat it. I'm always very straightforward. You know, if business ownership was easy, everyone would be doing it. There's a reason why you can make outsized returns, it's because it does take some involvement.

What Franchise Candidates Want Most

Tom DuFore 11:36

Speaking of the franchise oars, there are likely franchise ours that are gonna tune in and listen to this. And you have a wonderful perspective of helping match prospective franchise buyers with franchise organizations or franchises that are hopefully the right fit or you think might fit in with what they're looking to accomplish and go through. And I'd love for you to maybe talk through, it could be at a high level or narrow level, whatever makes sense, the qualities that you have found helpful for franchisees to either choose that brand or find success with that brand so that the franchise owner can be thinking, beginning with that end in mind of how do I help set my system up to attract the best possible candidates.

SPEAKER_01 12:22

Every candidate I've ever had has said what provides the highest return on investment with the fewest number of employees. So if you can position yourself around that, that that'll be to your benefit. No, it's important for franchise ours to recognize you're not a candidate's not just looking at them versus their competition or in their industry, but they're also looking at a competitor set of other industries. You know, and what I found, Tom, is I'm terrible at guessing what direction a client's going to go industry-wise. And so I like to show more opportunities than not. We'll look at 10 or 12 opportunities that are open, looking to expand their market. And inevitably, clients will surprise me and they'll surprise themselves. You know, 80 or 90% of the time, they go into an industry or sector that was never on their radar, never on their bingo card. So it's a lot of fun to see those light bulb moments take place where they look at their scouts and say, our community needs that. I think we would enjoy doing that. I think we can transfer our skills over. So from a franchise or standpoint, if it's a newer franchise or I would say, you know, never jump at your first franchisee candidates, you know, pick the right ones. They're going to be setting the item 19, setting the culture. You know, you want to find the right people. People also have the humility to follow the franchise system, right? I think some people, some candidates think they're the smartest guy in the room, no matter what room they're in. And so they're not good franchisees. So I would say take your time. You know, I helped start a franchise six years ago. Art of Drawers is the name of it. We were very selective on our first franchisees and it's paid off. We now have about 45 franchisees, 120 territories. It's been a lot of fun to help help them grow that from the sidelines. But some of the things that candidates are looking for today, you know, certainly if you're a B2B franchise, you know, I think that's attractive. A lot of them have B2B business-to-business backgrounds. So I would play that up if that fits you. If your business offers recurring revenue, that's another attractive selling point. Obviously, it comes down to the financials, right? There's got to be a good return there. No, but candidates are asking about the marketing. What are you providing to them? If they're going to be paying in 7% or 8% royalty, what is it that you're providing that's unique? Can't just be a technology stack. It can't just be some lead generation services. What is going to really give you that unique? You know, and so I think about everything, everything from procurement to your training to your how you're using AI, right? Some of the trends that we're seeing out there are for the first trend is non-trendy. You know, people want non-sexy oftentimes with business ownership. They want things that AI is not going to replace. But so if you can say, hey, this is we're in a fragmented, unsophisticated market that we compete in, but we're using AI, whereas the competition's not, that could be a selling point. But no, I joke that non-sexy is the new sexy. It's they they want understandable, cash-flowing businesses that are not going out

AI In Franchising Right Now

SPEAKER_01 14:59

of style.

Tom DuFore 14:59

You mentioned the elephant in the room with AI being, you know, front and center. It seems like every other article you read in the news is something orienting around AI, positive or negative. You know, sometimes it's a lot of gloom and doom about it and what's coming through. And, you know, I guess from your vantage point, I'd be remiss if I didn't at least ask what you're seeing or what's going on with this whole AI thing and what you're seeing in franchising.

SPEAKER_01 15:24

You know, I think franchising tends to be a little less, you know, tip of the spear when it comes to technology. So I'd say there's a little bit of catch up, and I, you know, probably people are using it more as a Google search right now than they're really capitalizing it. I just got my first AI agent recently, so that's been fun to play with and kind of figure out everything that he can do. And my kids joke that, you know, they've got a new brother because I refer to him by his name, which is kind of funny. Now I saw a chart the other day that shows really illustrates how early innings we are when it comes to AI adoption. So I think franchising, like every other industry, has a ways to go. I applaud the franchise rulers that are being innovative, they're testing new things out. And I think not only can it help your franchisees, but it can also help you sell more franchises. I mean, it really is a differentiator at in this season. Now, a year from now, two years from now, you know, it's probably table stakes, but right now you can really differentiate yourself if you're AI Ford.

How To Reach John And Get Help

Tom DuFore 16:17

John, what's a great way for someone to get in touch with you? Maybe they know someone who might be looking into buying a franchise, or maybe they're saying, hey, I'm interested in diversifying my own personal portfolio and maybe exploring the idea of buying a franchise or adding this in. How can someone get in touch?

SPEAKER_01 16:33

Yeah, I would comment that it's entirely free to work with us. Essentially, we get a referral fee from the franchise brands on the back end. None of that's passed along. So it's very much like a real estate model. If you were going to buy a house, you would use a real estate agent and they get a referral fee from the seller right, same exact model. And we're part of the largest franchise network in the country. So, you know, would love to help anyone. Uh, happy to jump on a call. You can come out to our website, Franbridgeconsulting.com, F-R-A-N Bridgeconsulting.com, share your email address. My assistant will then reach out, and my actual physical assistant will reach out and share downloadable copies of my book, uh, non-food franchising. But love to share a free copy with all of your listeners. And uh, if you'd like to take take a next step and book a call, just let her know and we'll get you set up and uh we'll go from there.

Tom DuFore 17:14

That sounds great. Well, we'll make sure we include those links in the show notes for us. And John, this is a great time in

Misses Wins Masterminds Success Framework

Tom DuFore 17:20

the show. And we ask every guest the same four questions before they go. And we're gonna ask you again as a repeat. The first question we ask is have you had a miss or two on your journey and something you learned from it?

SPEAKER_01 17:30

Yeah, you know, I once when I left the corporate world after I was on the franchise or side, and then I started a company with a business partner, and we built it up to 35 employees, doing you know, a couple million a year in revenue. It was a marketing agency and a call center serving franchises, but it wasn't a franchise itself. And at the end of the day, we couldn't get to that point of where the profitability justified the efforts that were being put in. And I had to wind the business down. Found homes for our employees, done homes for our clients, proud of how we did it, but that was a humbling experience. And at the same time, it gave me all the more appreciation for the franchise model.

Tom DuFore 18:02

Very, very interesting. Well, let's look at the other side, a make or a highlight or two you'd like to share.

SPEAKER_01 18:08

Yeah, you know, Frambridge has been on the Inc. 5000 the past two years, which is a testimony to the growth that we've had on behalf of our clients. I mean, it's it's directly correlated. And so, yeah, I've just had the absolute pleasure of helping several hundred people step into business ownership and you know, find that freedom for themselves. And, you know, it's not easy, like I said, but so proud of so many that have made that step and now are living life on their terms.

Tom DuFore 18:31

We ask every guest about this idea of a multiplier. So have you used a multiplier to grow yourself personally, professionally, or any organization you've run?

SPEAKER_01 18:40

Yeah, in fact, I would point to masterminds and the impact that's had on me. So I've been a part of EO Entrepreneurs Organization for about eight years now. That's been hugely impactful on my entrepreneurial journey. Uh, have been a part of several other masterminds, some more on the investor side, some on the entrepreneur side. But there's so much power in being in the room with other like-minded people that are going after big things that raise your level of thinking as well as provide you with tactics and encouragement. So that's been the force multiplier for me. That's one of the things I love about franchising is that essentially you have a built-in mastermind with these franchises, right? You've got a sea of other owners loving the same things, changing best practices. So, you know, it's kind of a built-in mastermind.

Tom DuFore 19:19

But it makes me think of when I was a multi-unit franchisee. I'd been in franchising my whole career. And until I owned it and was immersed in it and realized, wow, the power of the other owners within the network became the most valuable component to me as an owner. Corporate was great and they did their thing, but ultimately it was really my relationships with the other franchisees that they inspired me. They helped me. I had one kind of take me under his wing. He was a longer-term franchisee and took me under his wing and kind of helped give me the extra kind of mentorship, I guess. It was unofficial. It was just something that the owners kind of did to help one another out. It really was like this untapped, kind of unspoken about mentoring or a mastermind like you described, uh group.

SPEAKER_01 20:07

I love that. No, it gets oftentimes overlooked, but I think it's so impactful.

Tom DuFore 20:11

Well, the final question we ask every guest is what does success mean to you?

SPEAKER_01 20:15

Yeah, success to me, I think about my annual goals, my quarterly goals, even my daily rhythms, how I spend my time through a framework. I think everyone's got a framework where they, whether they realize it or not. For me, I call it the 5F framework. It's faith, family, fitness, finances, and franchising. For some people, it'd be general business, but I'm constantly thinking about how I spend my time in each of these, am I moving the ball forward? Really, it comes into my thinking throughout the day. Um so for me, it's moving the ball forward, being successful in all five facets and not shortcoming, you know, any of those. I don't want to go four for five, I don't want to go three for five, I want to go five for five.

Tom DuFore 20:53

Well, John, as we bring this to a close, is there anything you're hoping to share or get across that you haven't had a chance to yet?

SPEAKER_01 20:59

No, I think we covered the gamut. I I would just say I think it's a great time to get involved in franchising. I mean, we're seeing more interest than ever before, whether it be due to AI displacing jobs or whether it be to people that have just been, they're tired of traveling, they're tired of building someone else's empire. They're saying, hey, maybe now's the time. And you know, I love the training wheels of franchising and provide it to allow me to step into business ownership for myself, but not by myself. So to be cliche. So now I I've never been more excited about the different business models that I'm seeing out there in franchising. I know you see those as well. So many different niches across different industries outside of food, whether it be B2B services, property services, home services, you know, businesses carried to seniors or to kids, to pets, health and wellness. So many exciting opportunities. I've never seen so many diverse and exciting models as we see right now. So again, would love to help any of your listeners in any way I can.

Tom DuFore 21:49

John, thank you so much for a fantastic interview. And let's go ahead and jump into today's three key takeaways.

Key Takeaways Win-Win Closing CTA

Tom DuFore 21:56

So, takeaway number one is when John talked about entrepreneurship through acquisition being popular these days, but what he's found is that sometimes these folks that are investigating it tend to be more entrepreneurs and that they keep analyzing and searching for the quote perfect deal, but many times it takes two years or more, or that they never end up buying a business. And he said part of the challenge is that you're acquiring someone else's culture. Staff might leave, customers might leave, and a variety of other potential challenges. Takeaway number two is when he said why he loves franchising, or at least some of the reasons. And he said one of the reasons he likes people considering franchising as opposed to entrepreneurship through acquisition is that you can buy a franchise and get it started right from the beginning, where you're able to start bringing in your own staff and team. You can franchise stack, which is where you're able to buy one franchise and add another, or as he shared a couple examples of clients of his that bought one franchise and then purchase complimentary franchises. And then the other thing he says is you get the first line of sight on other franchisees that you can purchase. And that's so true. I know in my instance, when I own franchises, I sold my franchise to my manager at the time, and he has since acquired other territories within that same franchise system. Takeaway number three is when he listed out some things he has found that are attractive in today's franchise world for the people he's working with, the people he's helping find the right franchise. And he said the list includes a B2B business, a recurring revenue model, a good return, and what do you provide that's unique or what are your differentiators? So he said that the brands that are able to discover or be clear on what makes them unique helps him stand out. And now it's time for today's win-win. So today's win-win comes from the end of the episode when John said he has never seen more interest in franchising than he has right now. I thought that was a great moment to hear that from someone that's in the thick of this every single day. So if you're thinking about franchising your business or you're franchising, you're wondering, should I be maybe doing the marketing or launching this campaign, based off of what John said, it sounds like now might be a really good time. So 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 you know might be ready to franchise your business or take their franchise company to the next level, please connect with us at bigskyfranchise team.com where you can schedule your free no obligation consultation. Thanks for tuning in, and we look forward to having you back next week.