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Diversifying Your Portfolio with Franchising: Insights from FranBridge CEO Jon Ostenson
In this episode of the Short-Term Show, Avery sits down with Jon Ostenson, the founder and CEO of Fanbridge, to dive into the world of non-food franchising. Jon shares his journey from the corporate world to building a diverse portfolio of five franchises, focusing on how real estate investors can diversify through franchising. Learn about the synergies between real estate and franchise investing, why Jon avoids food-based franchises, and the pros and cons of starting a franchise versus a company from scratch. If you’ve ever considered adding franchising to your investment portfolio, this episode is packed with insights!
Avery:
Hey guys, welcome back to another episode of the Short-Term Show! I know you guys like to talk about other types of businesses besides just short-term rentals, because a lot of us are like, “All right, I’ve got a lot of real estate. I want to buy some other types of businesses.” And we have John Austinson, the founder and CEO of Fanbridge, a franchising company, to talk to us about different types of franchises. Personally, I think I would love to buy a franchise, but I don’t know what kind of food I want, but besides that—thanks for coming on, John!
Jon:
Hey, Avery, I appreciate you having me on. You know, I focus on what I call non-food franchising—that’s the title of my book.
Avery:
Awesome. So first, tell us a little bit about yourself, how you got into this business, and what kinds of franchises you’ve started or have now. Let’s hear it all!
Jon:
Yeah, appreciate it. I’m based in Atlanta, Georgia, and we work with clients all across the country. My background is corporate; I had a good run but wanted to do something a little more entrepreneurial. I had the opportunity to step away from a public company into a private one and run the day-to-day operations for a business called Shelf Genie, which is custom pull-out shelving for your kitchens and pantries. I ran the home office supporting all our franchise owners across North America. I fell in love with the franchise model and saw how so many backgrounds could get plugged into business ownership. Long story short, I invested in franchises, and now I think I’ve got five in total at the moment.
Avery:
That’s interesting. You said you’ve got five franchises now? Tell me more about how investors get plugged in with those.
Jon:
We work with about 600 different franchise brands, mostly those in growth mode. A large portion of our clients are real estate investors, probably 75%. I think there’s a lot of overlap and synergy between real estate investing and franchising. They both offer that gateway into other types of entrepreneurship.
Avery:
That makes sense. I know it’s the same basic idea, building your own empire, not someone else’s, and you’re building cash flows. You get tax benefits of having active investments, and you’re also building long-term value with the asset. I think that’s why a lot of real estate investors are gravitating toward this.
Jon:
Exactly, especially with interest rates being high and inventory being limited. Many are looking to diversify portfolios through franchising.
Avery:
I’ve been in the bar business—my husband owned one, and I helped run it. He always says I’ll never get back into food or beverage, and I agree. So what makes you focus on non-food franchises?
Jon:
I get it! I know plenty of food franchise owners, including the CEO of Chick-fil-A, who’s a good friend of mine. But personally, I believe there are easier ways to make money that require less upfront capital and fewer employees, and you aren’t as susceptible to trends or customer whims.
Avery:
That’s true! I’ve always thought that food was more stressful with a higher risk, even though some brands do well. But what about the pros and cons of starting a franchise vs. starting from scratch?
Jon:
For sure, real estate investors tend to lean toward franchises. You’re essentially buying into a proven system, reducing the trial and error that comes with starting from scratch.
Avery:
Totally! I’m an elder millennial, 36 now, and I feel like I’ve done all the trial-and-error stuff. I’ve started real estate companies and mortgage companies, but I’m tired of busting through walls. I just want someone to tell me what to do, and I’ll execute it. That’s what a franchise offers, right?
Jon:
Absolutely! A franchise provides that structure. Some entrepreneurs might feel too entrepreneurial for a franchise, but I think it gives the balance of autonomy with guidance, which is exactly what a lot of investors are seeking.
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