Jethro D. Jones: Welcome to my bonus money.

I'm so excited to be back with you today.

I'm Jethro Jones, your host.

You can find me on all the social networks at Jethro Jones.

Today I'm excited to have Kenny Rose on the program.

He is from Fran Shares.

And so Kenny, tell us about Fran shares.

What is it and why should we be interested?

Kenny Rose: Well, first off, thank
you very much for having me on here.

Jethro, uh, franchise is the first platform where you can
finally invest in franchises as part of your portfolio.

Uh, it may not be the sexiest thing like a cryptocurrency.

I. You know what?

They are stable and predictable money generators.

Uh, most people, when I say franchise, they think
straight to like McDonald's and Subway, but they franchise
everything, hair care, automotive, fitness, education.

Um, you even see things like home
cleaning, uh, window washing.

Like if you can think of an industry, it is franchised
and you just might not always know they're a franchise.

'cause it's not like the McDonald's golden arches, but.

You know, it's a great type of investment vehicle
because you're investing in proven business systems.

And so it's important to know about not just as a,
like another source of income, but as just like a
alternative investment that just makes sense and
you can actually see grow in your own community.

Jethro D. Jones: So one thing that's interesting
about franchises is that they, they are proven because
they're, they're franchise and the business model around
a Fran franchise is we tell you how to do everything.

To make it successful and to make it
look the same from one place to another.

Um, and that's how you know that it's successful
because it's been proven and it works.

Time and time again.

But to start a franchise typically costs like
a lot of money from the research that I've done
myself because I am interested in this stuff.

And so this is a way to participate in that
without it being something that is, uh,
you know, sucking your time and energy.

And you being the owner and operator of the franchise
is a lot different than you being an investor in it.

Uh, tell me about that.

What is it like to really run a franchise and, and how much.

How much investment of time and energy is that
versus what you're talking about where you
can probably start with a low amount of money?

Right.

Kenny Rose: So this is actually where my
background before F shares really comes into play.

'cause I spent about a decade as what's called a franchise
broker, or you might see 'em called Franchise Consultants.

But essentially people who are interested in
owning a franchise, just like you were saying, I.
Interested but not sure how it works or what it costs.

I'd basically be like that realtor or investment advisor
that's going to help you, you know, recommend brands for
you based on your budget, your skillset, and your goals.

And then, uh, recommend those brands and coach
you through the research and purchase process.

And so, um, you know how much a
franchise costs, that's a wide range.

Uh, you know, there are.

Like if you're looking at like your traditional,
uh, food ones, you know, that's one to 2 million.

Um, but there's plenty that are like home-based services
that you can get going for 50 to a hundred thousand.

Now not all franchises are created equal.

That is not an automatic money maker,
especially when there's less upfront investment.

There's usually gonna be more sweat equity that
you gotta put in and be a lot more hands-on
and have more of a unique skillset there.

Um, but so.

There's a lot of barriers to owning a franchise.

One is just the upfront cost.

You know, gotta have six or even seven
figures of liquid capital available.

That's knocking it out for a lot of people.

Um, but then even besides that, if you do have that
money, uh, you generally don't want to go run a franchise.

You know, you've typically already had a career that made
you that money and you don't want to go ahead and like start.

Not from scratch, but you don't wanna start again.

And so, um, that's what I'd realized is that
people with money just want to invest it in others.

And then there's others that want to
go operate but don't have the capital.

And so, um, yeah, that's, uh, really how it all got started.

And like I said, the cost can vary so

Jethro D. Jones: Yeah, so it sounds like this is really
you taking your, uh, franchise broker skills and putting
'em on steroids so that you're making it accessible
for people who, where you were just matching up.

Wealthy companies with wealthy people, now you're matching
up people across all the spectrum of wealth to somebody
who may not have any money and needs a lot of support
to somebody who has, uh, all the money but actually
needs a, an operator to run the, the day-today business.

And I think that that's a pretty
neat opportunity to do, to do that.

Kenny Rose: Thank you.

I, I appreciate that.

And, um, yeah, it's, uh, definitely something
where I think people have a lot of, uh.

Great ideas when it comes to franchising
and how they like to own them.

But then there's that versus actually running
the business and they're very different.

And you can't just write a check
and the doors spill out money

Jethro D. Jones: Right.

Kenny Rose: you know, at the same time, you know,
think about someone who's like, for example,
like a district manager for 10 dunking locations.

That'd be an incredible franchisee.

They are hardworking to know the system inside and out.

But they don't have a million bucks laying

Jethro D. Jones: Mm-hmm.

Kenny Rose: And so you really have like, where these
hands-on operators are is not where the capital is.

And so you really need to separate the two.

And wasn't just the background in franchising
that got this going, it was also really the
democratization of alternative investing as a whole.

Um, you know, some people might be familiar with Fundrise.

They were the first one that like
democratized real estate investing.

So you didn't just have to be an
accredited investor to get involved.

They really proved that alternative investments
were sought after by a wide range of people.

And so then you started seeing other platforms like
Masterworks does it for investing in pieces of artwork.

Um, and then, you know, much more broadly available.

Ones like Crypto came out.

But it really showed that people
want to invest in alternatives.

And so, you know, I saw this as like the most, you know.

Mainstream alternative that doesn't exist
because people are already familiar with it.

It's proven.

And when it comes to democratizing it, it's not just
about access to capital, it's also access to community.

You know, you wanna have those local investors be the
first investors because they're gonna be customers,
they're gonna be local evangelists, they're gonna tell
their, the kids at the school to go there after school.

Um, so, uh, yeah, it's just a really unique
space that I'm, uh, excited to be a part

Jethro D. Jones: Yeah.

So I wanna talk a little bit about that local idea
first, because a, a franchise is by necessity,
something that is not only local, but that is, you
know, going, spreading out and going to different areas.

So, so with that understanding, um, the idea of, of
having a. A local franchise like Dunking or Pizza Hut
or whatever else, or even a service-based business,
having that local franchise means that that person
that you're investing in is very likely in your
community and you can see how things are going.

And, and, and like you, you'll see your advertisements
that you helped pay for by investing in that.

Right?

So, so.

Tell me more about that local investor
approach and why that's so important.

Kenny Rose: It's important on a lot of levels, uh, both
for the investor and for the asset, the franchise itself.

Um, you know, I, I like to say this is the most
local investment you can make because when you
think about other areas that you're doing it in, say
even real estate, most time people are investing in
real estate just locally, it's across the country.

But say you're doing a rental property locally, if
you did some renovations, you're, you know, hiring
some people a bit for it, but realistically it's.

you and some renters that are part
of your little, little economy there.

Um, and then you look at things like Trader Joe's.

People get the warm and fuzzies for, but like you spend
money there, most of it doesn't stay in your community.

Most of it doesn't even stay in your country.

They're internationally owned versus I. Investing in
a local Duncan, you are investing in a local business
owner to create local jobs, to provide a local service.

And yes, a royalty does go out to the corporate
office, but what company today does not pay support

Jethro D. Jones: Yeah.

Kenny Rose: it's their technology or their hr.

You're paying all these things anyway,
they're just wrapping it all into one.

And so, um, it's great from an investor standpoint to
be able to invest in their actual community and grow
home, but then also for the franchise themselves,
it's the best possible way to grow because, you know,
part of why companies, franchisees to have that.

Access to community.

A franchise is a local person with
a local pair of boots on the ground.

But we changed that math to have hundreds or
thousands of local pairs of boots on the ground that
are built in customer base, built in evangelists.

You know, they want to get catered at the office.

Uh, they say, don't you know, don't go to Planet Fitness,
go to the Orange Theory 'cause I own a piece of that.

And so it's this great way to do like that Reddit
versus Wall Street of real world ownership,
but to something that is even more tangible and
something that's actually like a productive company.

I.

Jethro D. Jones: Yeah, I, I really like that perspective
kitty, and, and that that changes the dynamic from.

Um, I'm, I'm investing in the stock market for example, too.

I'm investing in that guy down the street so that that
person on the other side of the street can have a job.

So that this family can go there and participate
in this and, and everybody can benefit from it.

And it's something that you can, that you can really see.

It's really interesting.

There was a, uh, so I live in Spokane, Washington and
there is a, uh, Chick-fil-A that wanted to build a, a
new site here in right down the street from my house.

And, um, there was a lot of like, uh.

Angst and frustration about them putting this franchise
in, uh, in this one particular, uh, strip mall area.

And it created all this like hullabaloo around it.

And I've gotta think that if.

There were local investors who were interested in that
coming to be and being successful, then there would've
been either less pushback or there would've been more,
uh, counterpoints to that saying, no, we want this here,
and this is us putting our money where our mouth is.

And, and I think that that's, that's really important.

And, and I, I, I know people who own
other kinds of businesses that have.

Franchising aspects to them and how powerful
that would be for it to be focused on local
folks participating in it, and really powerful.

Kenny Rose: Really getting that like
community to be a backer behind you.

'cause people love to support small, they love to shop
small, they just don't always connect franchising to small.

Jethro D. Jones: Yeah.

Kenny Rose: 'cause they never had access to

Jethro D. Jones: Right.

Kenny Rose: when and when they, and when
they do think of like that local business,
it's because of the local people running it.

It's not like I care so much about
that specific store, their big brand.

It is that.

They have a connection to the community,

Jethro D. Jones: Mm-hmm.

Kenny Rose: what franchises are, is that they're local
people that just frankly aren't gonna go out business
because they have a whole lot of nation national support.

Jethro D. Jones: Yeah.

Yeah.

That's pretty cool.

So, uh, let's talk about some of the details here.

So, I, I pulled up the.

Uh, the invest tab on your website right now.

So right now there's, there's four.

Things listed right now.

So there's Pizza Hut ever Bull
Hawaiian Brothers and Kiddo Kinetics.

And so these are all, these are different
types of, uh, things that people can invest in.

But the reason why I'm, I'm saying those names
of what's there is that, um, even if you haven't
ever eaten it, one of those three places,
or if you even know what Kiddo Kinetics is.

Uh, they're recognizable enough that you
know that they're, that they're out there.

So there are a few things on here
that, um, that I wanna talk about.

Um, it says that there's a projected net IRR,
the target net cash yield and the target hold.

Can you talk about those, uh, terms as
it relates to franchises specifically so
we can understand what that looks like?

Kenny Rose: Yeah.

So, um, you know, there's, uh, because it's franchising,
there's different ways that you earn on your investment.

There's both the income side of things
and the production from the business.

Uh.

Being profitable, but then there's also,
it's an asset and it grows over time and
you're getting appreciation there as well.

And so the net cash yield target is basically
that income side of things that you're getting
paid out quarterly based on performance.

And then the, uh, total net IR r is, uh, you know, the
income as well as the equity growth that's a part of it.

Then finally the target hold.

Uh, you're gonna see these vary pretty widely.

Uh, and a lot of that's based on
the different types of projects.

So how quickly locations open and how many
they're doing are like huge factors there.

Um, there's also some that like wanna continue to
scale those locations and have a bigger sale later on.

There's others that might want to just get
them up and going and have a sale quicker.

And so you'll see some that are three to five years,
then some all the way up to eight to 10 years.

And you know, it's just like, uh.

Stocks are any type of investing where there are
different time horizons and different goals that you have.

And same thing of like, Hey, I might want bigger
upside in a brand I'm not as familiar with as
compared to, I'm very familiar with this brand,
but I'm buying into someone else's who did all the
legwork, so I'm not gonna get as high of returns,

Jethro D. Jones: Mm-hmm.

Kenny Rose: familiar with that brand.

So, um, a lot of different ways you
can diversify there and just, uh.

How franchising has a big impact in those different parts
of returns because, you know, there's, like I said, the
income side of things, but then when it comes to that equity,
you know, the, there's always gonna be an exit at the end.

Whether that is the franchisees gonna buy out their
investors or another franchisees gonna buy out that location.

Or as very common is private equity will come and roll
up locations to create one larger operator as a whole.

Jethro D. Jones: Yeah, so that's a really
interesting, um, way to think about it and
something that, uh, most educators like we're just
not aware of, of those things and how they work.

'cause that's just not the world that we live in, but there
are a lot of educators who are trying to pay attention
to this stuff and, and get a better idea of what it.

What it looks like.

Um, so, so with that, what does it look like to invest?

Are there minimum?

Are there maximums?

Are there, you know, how do, how do we determine that?

Can we use retirement money for that?

Things like that.

What, what do you have there?

Kenny Rose: So, uh, first and foremost, and as on
theme for where we're talking is, uh, education.

I am a very big fan of education first.

That's why when you sign up, you get a, uh, franchise
investing guide so you know what you're looking

Jethro D. Jones: Yeah.

Kenny Rose: and, um, you know, I find it's very
important to make a educated financial decision.

So we like to put a lot of information there, whether that's.

Ahead of time to understand the basics.

And then as you're actually investing into an offering,
you're really exploring three different parts of it.

It's what the brand is, who the operator
is, and what the investment opportunity is.

Um, you know, on a brand side, what's really
cool about franchising is that it's actually
regulated by the Federal Trade Commission.

So as part of that, they all have to put out what
are called franchise disclosure documents or f dds.

And these f DDS are meant for.

Transparency and consumer protection.

So like investing in a franchise, you know, it's a
reputable company that has whatever experience they claim.

Uh, these f DDS include things like how much it
costs to start a location broken down by line item.

How much locations make, is there litigation against
the franchise, who runs this on the parent level.

And so you get to learn a lot of the
ins and outs on the brand side first.

And then you're looking at the
operator, uh, you know, you could have.

Golden arch is in front of the
door, and you could still go out of

Jethro D. Jones: Mm-hmm.

Kenny Rose: no company is without failure.

So you wanna reduce that risk.

And how do you do it?

An operator who's already done it before or
has a lot of very similar experience, and
so you're then learning about the operator.

Um, you know, for example, you mentioned in
the, uh, Hawaiian Bros one, you know those guys.

not be as big of a brand as a McDonald's, uh, but high
growth one with a couple hundred locations in development.

And then these operators, they were
multi-unit, multi-brand franchisees.

So like choice hotels, like Comfort and Sleep in Quality.

And they operate a couple dozen of those,
uh, scooters Coffee, which is the second
largest coffee franchise behind Duncan.

Jethro D. Jones: Oh,

Kenny Rose: they,

Jethro D. Jones: didn't know that.

Kenny Rose: Yeah.

They, it's funny.

They're, like I said.

Franchise everything.

And there's just a lot of riches and
niches, and they're like the anti Starbucks.

So they're very small footprint.

And you usually find them only in suburban
areas, uh, because they're drive through only.

And, uh, they are, they're the fa I think
they're average times a minute, uh, from
getting a co like ordering to getting your

Jethro D. Jones: Hmm.

Kenny Rose: And, um, so these guys are, they have I think
14 of those and they were developer of the year twice.

They set the record for fastest store to a million dollars

Jethro D. Jones: Wow.

Kenny Rose: the record by 60 days.

Jethro D. Jones: Wow.

Kenny Rose: you, this is what you wanna do is invest
in like good brands, whether existing or up and coming,
investing in good operators who have that history of success.

And then finally, uh, you know, they could have those
things together, but then if they say, I'm gonna
give you 3% interest, you're not gonna invest in it.

So making sure it's a good investment opportunity

Jethro D. Jones: Mm-hmm.

Kenny Rose: And then, uh, from there you can actually make
an investment and, um, you know, uh, offerings in the past.

And these, some of these current ones were
available just to accredited investors
only, uh, based on net worth and or income.

And the minimum there is only 10,000.

but we're opening everything up for
non-accredited investors in the next month.

And so then the minimum's gonna be only 500 bucks.

Uh, we want this to be an asset
class that's available to everyone.

Um, again, the more people that are involved in
it, the better the franchise is gonna be too.

And, uh, yeah.

So, uh, that's really what takes to,
uh, you know, make an investment.

And like I said, I'm very big on education,
so I think people should the ins and outs
and like have a very comfortable feeling.

It's not like a crypto where it's
like, ah, throw it up there and see

Jethro D. Jones: Yeah.

Kenny Rose: I don't believe in investing like that.

I like fundamentals.

Jethro D. Jones: Yeah.

That's good.

Well, and one of the things that is, uh.

That is frustrating about investing in the stock market
as a whole is that, um, I don't have any control or
ability to, to manage anything that's happening there.

And, and you don't in these either.

I'm not saying that like you put in 500 bucks and
you get, tell a franchisee how to run it, but if it's
a local one and you're like actually going there.

Then you can like go there and you can take
people there and encourage people to go.

And so there, there is some, you know, some
local, uh, incentives to, to keep that going.

Um, but the other thing is that, uh, those big
multinational corporations like Apple and Google
and Meta and all those, like you, you, you have
such a small stake in those unless you are.

Kenny Rose: Yep.

Jethro D. Jones: Uh, a multimillionaire hedge fund.

Like you're just not going to, like, it just doesn't matter.

You can't, you can't do anything about it.

But this kind of thing, it, I'm, I'm trying to help people
find investment and passive income opportunities where they
can actually like, feel like they are a part of it, even if.

They still may not be totally right.

And, and this is one of those things where,
where that can be, and, and I love the idea of
making it accessible with small amounts of money.

I personally think that that is so important.

As I started doing my own research on this stuff,
everything that looked like it had good returns.

Was you had to be an accredited
investor to be able to access.

And then as I started talking to people and they talked
about doing like pre IPO type investment investing, the
only way to get into that is to be an accredited investor.

And,

Kenny Rose: Yeah.

Jethro D. Jones: uh, if you want to raise money from
family and friends, they have to be accredited investors.

And so there are all these things where it's like, if you
don't already have that money, it feels nearly impossible.

To actually get that money.

And that's, that's one of the reasons why I
started doing this myself, is so that I could be
more in control of how I made that extra money.

And so, you know, returns, any kind of returns
on 500 bucks are gonna be small, right?

But if you keep adding to it and keep doing things
to help yourself get into a better position, then,
then that's going to compound and grow over time.

What else would you add there, Kenny?

I.

Kenny Rose: Um, couple things to

Jethro D. Jones: Yeah.

Kenny Rose: one part I love what you were saying
about, uh, the market and having an impact because
one of my biggest gripes with the market is influence.

Jethro D. Jones: Yeah,

Kenny Rose: like you can be a tweet away from
losing a significant part of your retirement income

Jethro D. Jones: that's true.

Kenny Rose: like, you know,
franchising, like I said, they're not.

Completely at the behest of the
parent company like McDonald's, CEO.

In the past, uh, one of the old CEOs, uh, was
in a huge scandal and was ousted, locations are
still profitable and so, you know, it's like.

can be a problem at the top end, but that is a headline.

It'll actually impact McDonald's stock, but
will not impact the, because again, people's
sentiment about the market fluctuates so much
versus like, Hey, let's keep this steady, Eddie.

People are getting haircuts at super

Jethro D. Jones: Yeah.

Kenny Rose: They're getting their oil changed at Meineke.

And so just like these really essential services
that are just gonna keep going day to day, um.

And then you had also mentioned like having
that like impact on the local investment.

And you know, I think there's a,
there's a balancing act you gotta do.

'cause there's like passive income that's not
passive at all and you're just working your butt

Jethro D. Jones: Yeah.

Kenny Rose: job and calling it passive income versus this,
it's like you're doing things you're already doing, go
get a cup of coffee, to the gym, get your oil changed.

And then also next time someone
mentions like, oh, my mechanic sucks.

It's like, oh, you should go to Meineke.

Jethro D. Jones: Mm-hmm.

Kenny Rose: now all of a sudden you are promoting
your investment while also doing a favor for a friend.

Jethro D. Jones: Yeah.

Kenny Rose: so, uh, it's a way of like having an
impact, but it not being solely reliant on your efforts.

Jethro D. Jones: Yeah.

And yeah, that, that's one of the things
that this democratization of investing,
um, I think is a really valuable, uh.

Point to it is that it, it opens up these opportunities
for people that just haven't been opened before
and allows you to, to play a little different role.

So, uh, somebody is more interested,
what, what should they do?

How should they, uh, get involved
and learn more about F shares?

Kenny Rose: Well in two ways.

One is, uh, if you go to f shares.com,
it's like shares of franchises.

Uh, go, go and sign up and, uh, just read, read the
newsletters that come along, like we try and be educational
so that you can be more comfortable over time like.

Our goal is not to get one big investment.

It is to get many small investments over many
years and just build this as part of the portfolio.

Uh, but outside of that, connect me on LinkedIn.

I love chatting with people who are supporters of
what we do and always happy to help out however I can.

So, uh, yeah, add me, uh, Kenny
Rose on LinkedIn and reach out.

Always happy to help.

Jethro D. Jones: Excellent.

Well, I got a link to your, uh, to your LinkedIn Enter friend
shares.com, uh, on the show notesPage@mybonusmoney.com.

So, uh, this has been awesome.

Anything that I missed that you wanna say before we sign off?

Kenny?

Kenny Rose: Uh, no, just other than I'm a supporter of
what you're doing and, uh, you know, trying to equal
things out on how you can build these other income streams
and, uh, prepare for retirement, maintain your lifestyle.

And so, uh, just keep up the awesome work.

Jethro D. Jones: Cool.

Well, thank you so much for being part of my bonus money.

Uh, just a reminder, this is not investment advice.

Uh, we are learning here and I'm
sharing my learning with you.

Because I want to help you learn how to take control
of your money and how to take control of your life.

And, uh, I'm not a financial person at all.

I'm a school principal, so wanna
make sure that that is clear.

Uh, if you have other ideas or are doing something
and you wanna share that, please reach out to me,
and I would love to have you on the show sharing your
experiences and how you're making bonus money yourself.

Thanks for listening to My Bonus
Money on the Be Podcast Network.