#206 Non-Food Franchising: The Career Path AI Can’t Replace

We've got nothing against the food guys. We need them for sure. But my humble belief is there's simply easier ways to make money. Opportunities that may require fewer operating hours, less employees, less capital investment. We like these other industries, things that are non-trendy, in some cases non-sexy businesses that people will always spend on that aren't going outta style.

Welcome to the High Voltage Business Builders Podcast, a show where we interview high voltage entrepreneurs growing and scaling through e-commerce, real estate, and other wealth without Wall Street ventures, showing you the path to making your first or AI is changing the job market faster than most people realize.

It isn't some distant threat anymore. It's here, and it's already reshaping entire industries. Layoffs at major companies keep making headlines, and a lot of professionals are starting to ask the same question: what's my backup plan? That's where today's guest comes in. John, former president of Shelf Genie and founder of Fran Bridge Consulting, spent years helping people move from corporate jobs into business ownership. He's owned franchise Franchises himself, led franchise systems, and worked with thousands of individuals across the country who want stable, scalable businesses that won't get wiped out by automation. In this episode, Neil and John break down why franchising is becoming a go-to path for people who want more control over their income. They talk about which industries AI's starting to disrupt, which ones are still safe bets, how much a franchise actually costs, and what kind of returns new owners can expect. Let's get started.

So guys, on this episode, I have a question for you. What does AI have to do with franchising? You might be surprised, but there's a lot of conversations about that right now and across the world, actually. But we're going to talk today about a specific vertical of impact in that relationship to franchising and business development, the management, operations, marketing, pretty much everything that AI is touching. And today specifically, we're going to cover it in the world of franchising. So I brought someone in here who knows a lot about that, who's had a lot of experience. Um, in this space, and I'm honored to have him on today as a guest, and we're gonna go through and unpack some of that conversation. So, John, welcome to the call, brother.

Hey, Neil. Excited to be here.

Yeah, man. So tell us franchising in your world, like how did you get into it? Give us a little, you know, background into your, into your story.

Yeah. You know, like so many of your listeners, I spent many years in the corporate world working for the man and building some, someone else's empire and had a good run. Very thankful for it. But, uh, it was about 9 years ago that I stumbled into franchising. I had the opportunity to step in as president of Shelf Genie franchise system, and, uh, which was custom pullout shelving for your kitchens and pantries, and ran our home office supporting all of our franchisees all across North America. And, uh, for me, that was the moment where the light bulb went on and, uh, you know, I really fell in love with the franchise model. And, uh, long story short, uh, just saw how so many different backgrounds, uh, could get involved in business ownership through a shared, uh, model like, like we provided them. So, uh, since then I've invested in franchises myself on the franchisee side, owned a couple of those. And I started my consulting practice about 6 years ago. And yeah, I've been very blessed to be able to work with hundreds and even thousands of individuals across the country, helping them step into business ownership, identifying the top opportunities for them in their market and what, in what I call it, non-food franchising.

Okay. Non-food. So we'll get into, there's a lot to unpack there. So when you say you stumbled upon it, what does that mean? Did, did you have an opportunity where you were still at your job? Did you quit and do this? Like, did you have some major life-changing event? I'm sure the There's more to the story down there, John, right? It wasn't a perfect path, right? Yeah.

I was in my mid-30s and, uh, had some, the desire to do something more entrepreneurial. Didn't know what that looked like. You know, I still worked for a Fortune 1000 company at the time as a vice president of sales, but had started doing some networking and, uh, was introduced to a gentleman that, uh, you know, was the founder of Shelf Genie. And he said, hey, we're actually looking to bring in a president. And, uh, so that, that's how I stumbled into it.

Hmm.

And when you got into it, what, I mean, what ultimately did you enjoy about the idea when you first started out, or did you hesitantly go after it, or were you just all in?

I, I was all in. So I took a pay cut. I, I took a significant pay cut to leave corporate America to go work for a private company, even though it was an elevated title, elevated role, you know, but I was given a lot more responsibility and I saw the trajectory of where that could take us.

Now, are you married with children, family, kids?

Married here in Atlanta, Georgia. I've got 3 kids, 14, 9, and 7. Boy, girl, boy, coach their sports teams and chase them around. And we have a good time, pretty active here in the community.

That's pretty awesome. And when you made this jump, was your wife with you or was, were you single in your 30s or?

No, we were married and I had, had one kid, maybe one on the way or close to it. And no, she fully supported it, which, which again, I was very blessed. I know not everyone's in that situation, but yeah, it also, you know, built up, you know, we'd had stock options and such over the years. And so we'd kind of put ourselves in a position financially where we could Step out and take a pay cut.

Yeah.

It's not as, you know, not everybody has that story of the, of the spouse who wants to come along for the ride. There's a risk in all of that with a family and a new baby on the way. Um, that made it, did it, did it work out exactly in the first year like you thought it was, or did something, you know, was there challenges you didn't expect?

There's, uh, all sorts of challenges. Um, I could go pretty deep into this, but yeah, no, we, I mean, had a great experience, loved the team. Um, ultimately the founder and I spun off. We started another business on the side that supported Shelf Genie, supported other franchises. Built that up, had about 35 employees, and then, um, decided, you know, that, that profitability wasn't what we thought it would be. And I had to make a tough call of buying home for our employees. So there's a little bit of evolution, um, you know, beyond the headlines, a lot of learnings, um, but a great experience. Very thankful for it.

Now you say non-food franchising, so unpack that a little bit more for me because that, that sounds like what I think it is, but let's just clarify.

Yeah. Well, we've got nothing against the food guys. We need them, um, for sure. But, um, my humble belief is there's simply easier ways to make money. Opportunities that may require fewer operating hours, less employees, less capital investment, maybe less susceptible to consumer whims. You know, I always say frozen yogurt was big until it wasn't, right? So we like these other industries, things that are non-trendy, in some cases non-sexy, everything from home and property services to health and wellness, to categories like kids, pets, seniors, business-to-business services. I'd say the general theme around non-food franchising, as I've termed it, Is businesses that people will always spend on that aren't going out of style. Yeah.

You mentioned the Wall Street Journal had an article out yesterday about this. What, what was it in relevance to the things you're doing in the, in the non-food franchising?

Wow. The drumbeat just keeps getting louder, Neil. I mean, it's every day or two the Wall Street Journal puts an article out there amongst other publications just around how AI is starting to displace jobs. I mean, we all knew it was coming. It's happening fast, but you see CEOs of major companies coming out being more and more open about just the percentage of layoffs that they see. I mean, in the past week alone, you know, between UPS and Amazon and a variety of others, I mean, they've announced tens of thousands of layoffs apiece.

Yeah.

Even my old employer, Carter's, just announced a 15% corporate workforce reduction. So it's happening. I mean, the CEO of Ford said in a couple years, 40 to 50% of the workforce won't be needed. And so we do see people flocking to franchise ownership, not just for that reason, but that would be one of them. And they're saying, hey, tell me about businesses that will be enhanced by AI, but most likely not displaced by AI for the foreseeable future.

Well, I've said this on my podcast and, and you're saying similar things, but the end result is if you're not considering your own business or you're not adapting to AI in your current work or position, be aware your number might get called. So this may be a good opportunity for you to not be victimized by a situation that goes, well, I got laid off because of AI. And instead you might take the John route and say, hey, I'm going to go out here and do this anyways. I'm going to take the risk. I'm going to go out. There's a different mindset in there, isn't there? Like a successful mindset.

Yeah.

You know, and I always say if business ownership was easy, everyone would be doing it. You know, it takes a lot of hard work. There's also a reason why you can make outsized returns. There's a reason why you can eventually have outsized time availability, right? Once you did the hard work to build it, there's just a lot You can achieve that you couldn't as a W-2.

Is it true? And there's some myths, maybe we can unpack them. I maybe have a few of my own, and I think some people listening to this might have similar questions. Is there a myth that every franchise I get into takes 50% of the profit?

No, no, no. It's much lower. Typically you'd pay a franchise fee of maybe $50,000 upfront, you know, for a territory or location, and then probably somewhere in the neighborhood of 5 to 8% of revenue. in the form of a royalty. Now, oftentimes that is going towards things that you would be paying for anyway if you were to just start a company. So, you know, when we take clients through the process of talking to franchisors and exploring opportunities, we want them asking those questions. What am I getting in exchange for the royalty? What kind of value is being added? Because franchising is just like every other industry, Neil, where you've got great players that provide great support, great, great value, and you've got ones that don't. And so that's where we come in.

Yeah.

come in and try to help.

What can I expect, say, you know, for that $50K and 5 to 8% of royalties? What kind of business size and scope of revenue? What would my potential profit be out of that, say year 1, if that's kind of the route I choose to go?

Yeah, I would say, so I gave an example. I was speaking in Dallas at an investor conference on Friday, and what I shared with them was, you know, if you were to buy 2 territories of a service-based business, which is very common, that could be home services, maybe in-home senior care, property services, pool cleaning, roofing, flooring, insulation, you know, your all-in investment probably is somewhere in the neighborhood of $300,000. That's franchise fee, startup costs, working capital. So if your all-in was $300,000, I'd say your run rate by the end of year 1, it may, you may not hit $1 million in year 1, but your run rate by the end of that year going into year 2 could be right around $1 million. And that's probably dropping somewhere around 15 to 25% to the bottom line, we'll call it 20%. So that's $200,000 to the bottom line on an investment of $300,000. That's a pretty attractive return, right? 67%. And you're getting tax benefits of business ownership and you're building an asset that you can sell one day. But what are you giving up in exchange for that? A, you had to make an investment. And then secondly, you know, you're having to put time and effort and energy into it. And it's not a guaranteed thing. But the beauty of franchising is that you're able to look at a lot of other people before you ever buy. A lot of other people running the same business day in, day out in their markets.

Yeah.

And say, hey, if they can do it, why can't I do it?

Yeah, definitely no guarantees in business. We know that. And anybody listening to this podcast should know that. And as I say it probably every time I'm on an episode, uh, business is not a guarantee of success, right? But it's a guarantee that it will work for the success that can come as long as you persevere longer than anybody else, basically. And you mentioned service jobs and stuff like that. So if I'm not in a location to do that, or I'm not skilled in the labor, is that a requirement of my ability to run the company?

So most people are bringing transferable skill sets in. They're not bringing industry experience. Probably 80 to 90% of those that we work with end up choosing a business in an industry that's never even on their radar, much less they had a background in. So I'd say the skill sets, and a lot of times those could be leading people. Are you halfway decent with people? You know, maybe you have some sales in your background or administrative, and you kind of hire around what you bring to the table. So the franchisor's gonna help you from the industry standpoint. They're gonna help Kind of set you up for success in a lot of different ways, which I'm happy to get into. But ultimately I'd say you hire around your skillset. If you're more of a front-end guy, you bring a back-end, you know, hire a back-end person first and foremost. Most franchisors are wanting owners that are gonna work on the business, not in the business. They don't want you running appointments out there that, you know, maybe in the very early days you get your hands dirty, you learn the business, but very quickly you hire, you know, those day-to-day functions, allowing you to step back and work on the business and coach that team. Yeah.

Let's say I want to, you know, I've got a corporate job and similar to you and you left, you took a pay cut, but obviously you got, you know, kept your house running off of what you made. What, what should somebody expect? Say they're a high-income earner and want to get involved in this, you know, if they want to replace that $150,000, $250,000 a year job, what should they expect in terms of what kind of franchise or what kind of dedication of time? You know, what is really going to be year one expectation for them?

Yeah, I would say, You can certainly do that year one if you are running the business, if you're the main person. So if you were to leave your W-2 job and step in and run the day-to-day, then yeah, you can make $150,000 in that first year. And I always tell people, let's go conservative. I mean, let's assume that it takes longer to ramp up. So I'd say that's possible. It's not a given, right? And so there are variables we have to look at. Now, half of those that we work with actually go in with what we call a semi-passive ownership style. Some call it semi-absentee, some call it an executive model. The idea is that you put a manager in place day one that's going to run that business. So you, in theory, could keep your W-2 job and run this. Now, so much of that comes down to putting the right operator in place. If you've got a great operator and you incentivize them, that franchisor can carry a lot of the daily support water for you and be their go-to resource. However, if you don't have the right operator, you're obviously going to lean in until you do. So I never want to sugarcoat that. It's very doable in franchising, but it takes having a good person working for you.

And finding that person, I think, if I'm not mistaken, and I'm speaking out of turn here, please forgive me, but it's, it's part of the franchise you're buying into to also help you train up and find the right operators, is it not?

I would say they will provide you with the job profiles. They'll tell you where to fish for that right person. They're, in a lot of cases, they're happy to help interview them. But I'd say end of the day, that, that falls a little bit more on your shoulders. Now, once you identify that person, The franchisor, yes, can train them up.

Yeah. In the workforce today, based on these non-food franchises, has it been difficult to find operators or is there plenty, you know, pretty good pool of people out there right now that want to operate these?

There's a pretty good pool. You know, the avatar I've liked in the past is someone in their mid to late 20s that's hungry, that, you know, they've got a few years of work experience, but they're ready to, you know, have a little more responsibility. They don't want the big company breathing down their neck. And so, You know, we've been successful in plucking those type of people. Um, and what I found is just a couple of hacks here. You know, titles are free. You don't want to grossly overtitle someone, but if someone's currently a director in the corporate world, they love the idea of being vice president or president of XYZ, you know, uh, business. Um, I like to give them 3 different pay package options as well with different levels of variable compensation. Um, that way they could pick the one that works best for them and they take ownership of that, um, decision as well. So just a couple little hacks I've learned along the way, but No, I'd say we haven't had a whole lot of trouble. There seem to be a lot of people that are interested in that type of opportunity.

Well, it seems to be a growing segment of our population, the service base, that are kind of growing out of that AI quagmire of, what do I do and how do I evolve and whatnot? And it seems to be one of the last frontiers of places that are going to be the last to be touched by AI. Is that what you're saying as well?

Yeah, I think a lot of these industries, I mean, you think about some of the jobs like in home and property services, I mean, very blue collar, Maybe Elon's going to build robots that eventually take over some of these tasks, but there's still a very long runway for things like dumpsters or asphalt paving and line striping, or just things that, in-home senior care, to use that example again. And people love that senior space. That's been a hot one. Just so many different businesses that kind of, whether it be senior fitness or brokering senior facilities, there's just a lot of tangential type businesses that support seniors.

Yeah. Now you wrote a book, correct?

Yeah. I wrote a book called Non-Food Franchising.

Yeah.

And what, what can we learn from that book if we were to grab a copy?

Yeah.

And happy to share a free downloadable copy with all of your listeners. Um, you know, I tried to pack as much content as I could into 90 pages, you know, make, make it an easy read, but really get you from A to Z, um, on all things franchising. So we talk about, you know, different types of industries. We give some client case studies. We talk about the, the funding side, the financials, um, you know, a little bit of the legal side of how to analyze the franchise, uh, agree— And then I have some really interesting chapters. I have one on franchising versus startups, you know, the pros and cons of both. And then another one on franchising versus ETA, entrepreneurship through acquisition, the idea of buying an existing business. And we talk about what are the pros and cons of both, as well as my perspective from where I sit, because I see a lot of case studies out there.

And where can they go get a copy of the book? It's very generous of you to give it away.

Yeah, come out to our website, franbridgeconsulting.com, franbridgeconsulting.com. Share your email address. We'll reach out to you with the downloadable copy. So if you'd rather buy it on Amazon, all proceeds go to Hope International, which is a great nonprofit that we support. So, oh, wonderful. Uh, definitely support that route as well.

And what is Hope Bridge International?

Yeah, Hope International. Uh, we've been on mission trips with them. It's a, it's a faith-based organization that provides really sustainable, uh, resources to underprivileged, uh, you know, groups all throughout the world and allows them to, through microloans and other such programs, allows, you know, burgeoning entrepreneurs to, you know, get the supplies they need to start a business so that it's sustainable commerce for their family, for their community. Rather than just a handout, it's more of a handoff.

That's very, very cool. And that's a, it's amazing charity. So guys, check that out. And obviously any proceeds will go to the charity. So that's a wonderful gift for sharing. Is there any questions I didn't ask you yet, John, that maybe you wanted to cover that we haven't got to?

No, I think, I think you covered a lot. You know, I would say it's entirely free to work with us. I'm essentially a real estate broker. We get a referral fee from the brands on the back end. None of that's passed on to our clients. And we work with over 600 different franchise companies that are looking to expand. So Love, you know, for anyone that's looking to dip a toe in the water, would love to get on call with them and help them evaluate the top opportunities in their market.

So in terms of like a minimum, you mentioned $50,000 earlier. Is that kind of the minimum people should consider for types of franchises, or is there a different amount they should consider too?

Great question. So there's gonna be some additional, uh, you know, expenses associated with sta— standing up a business. So I'd say if you look at the franchise fee and the startup cost and several months of working capital, so you're all in investment range. I'd say $100,000 to $400,000 is kind of the sweet spot. Most opportunities fall within that. Certainly, I mean, I've got clients that'll buy into trampoline parks that are well into the 7 figures, and there are a few that are just under $100,000, but I'd say most things are kind of in that $200,000 or $300,000 range is kind of a good median.

I think this would probably be something that anybody interested in real estate would really understand. Would you agree?

We see so many real estate investors moving our way. In recent years, you've had high interest rates, low inventory, fewer good real estate deals to be had. And so these real estate investors are saying, what are other tax-advantaged alternative investments that we could invest in? And there, there are a lot of franchises that kind of piggyback well with real estate as an industry as well. So no, we, I'd probably, I'd say probably 2/3 of those we work with invest in real estate as well. I personally do. I'm a, I believe in all of the above approach, but I do think franchising plays a unique role within someone's portfolio.

How many franchises do you have under management now?

I currently have 4.

4. Okay, awesome. And that keeps you pretty busy?

You know, it doesn't take too much time because I've got good people on them. So it, you know, I've been more active with ones in the past, but the current portfolio, I'm a little more of a capital partner, strategic advisor. So I'm not day-to-day in the business.

Are they all around you in the Atlanta and the Georgia area, or are they somewhere else?

One is, 3 are not. So I've got one in Minneapolis, one in New York City where I invested alongside a client of mine, and then one down in South Florida.

Awesome. All right. So there's very distributed opportunities to target locations, I suppose, by territory, huh?

Absolutely.

Awesome. Yeah. My uncle really encouraged me a long time ago to get into franchising when I first thought about getting into the business world. I went a slightly different route, although I would've got into 1-800-JUNK, right, when it got off the ground. So that may not have been such a bad deal, right?

They, they, they've had a good run for sure. They had a pretty darn good run.

I, I don't know how many billions they're making now, but I'm pretty sure if it's, it's quite a lot, if I'm not mistaken.

Yeah. But, but junk hauling, I mean, that's a great, uh, you know, example. I mean, there's such a niche and you do have a couple of large players out there today, including 1-800, but, uh, there, there's a junk company outta Texas that we're really excited about that's just now franchising and they've got some patented technology where they are the only junk hauling company in the country that can actually charge by weight rather than just filling up the back. They charge by weight. So it's a differentiator out there. And, uh, yeah, whenever we see a large industry, we like to see differentiation and you, Uniqueness, uh, within the space.

Yeah, no, it makes a whole lot of sense. I get it. And always there's a way to disrupt those kinds of things. I saw one yesterday about a guy who's kind of disrupted the space between the lawn mowing by putting up an, an Uber-style app for lawn mowing. So you could basically just go to the app and choose who you want to come mow your lawn.

I see.

It could be somebody different every week because you can schedule it. And like, that's, that's pretty darn cool. There's always disruptors and it sounds like you're doing some disruption in the franchising space, which is very cool as well. So appreciate you coming on, man. Thanks for having some time with me.

Absolutely. No, enjoyed it. Appreciate you having me, Neil. And like I said, more than happy to engage with any of your listeners and, uh, help them understand.

Hey guys, definitely appreciate it. Go grab a copy of the book. It's free. You know, if you're gonna go find some information, that's free too. Definitely check, check out what John is doing. The link was in the show notes and up on the screen a minute ago. And as always, if somebody needs to hear this information or someone's been talking to you about franchising, this might be a great episode to share with them. Always like, comment, and engage. Helps us with big tech. Don't care if you leave snide remarks. It still helps with big tech. But, you know, subscribing and liking is also good too, so that this message can get out to anybody who needs to hear about it. And remember guys, your opportunity always begins at the end of your excuses. So take some imperfect action today, go grab this book, and something perfect will happen along the way. Catch you guys on the next episode.

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