Franchising as an Asset Class

On this episode of the On The Rise Podcast, host Jeremy Dyer talks with Scott Jones, who has spent over 30 years in franchising as a multi-unit franchisee, a franchisor executive, and CEO of a supplier serving 80,000+ locations. For the last 21 years he's advised mid-career professionals and business owners on whether franchise ownership fits their portfolio. Scott explains why he treats franchising as an alternative asset class rather than "buying a job," what separates a good semi-passive candidate from a poor one, where AI genuinely helps franchisees — and where ChatGPT gets franchise economics flatly wrong. **KEY TAKEAWAYS** **Franchising isn't "slinging sandwiches."** Senior executives often equate franchising with buying themselves a job. Scott points to heavy institutional activity at the unit level — private equity acquiring franchises and rolling them up — as proof of real opportunity, and notes not every brand requires $3 million. **Treat it as an alternative asset class.** Scott allocates across real estate and business ownership the same way, asking where he can get a superior return on investment and time. The discipline you'd apply to any investment shouldn't disappear because you like the product. **Semi-passive has a real definition.** Scott's benchmark is 5 to 15 hours a week — a term he says is thrown around loosely. The business is built around a team and an infrastructure you hire, not around you running the counter. **Availability matters more than hours.** The bigger question isn't how much time you have but when. If you can't take a five-minute call from your manager during the day, you need an operating partner with equity, a capable GM, or a spouse who can. **Rigid schedules aren't automatically disqualifying.** Scott has worked with pilots, who have intense on-periods followed by real flexibility, and a functional medicine physician running a robust practice. The structure can be designed around the constraint. **AI is a genuine tailwind for operators.** Scott sees AI absorbing the busy work that franchisees never had hours for — turning training manuals and the institutional knowledge in leaders' heads into something a brand-new franchisee can access on demand. **But AI gets franchise economics wrong.** Scott asked ChatGPT what an average franchisee earns at a large brand, hit return five times, and got five wildly different answers — none correct. The reason: the FTC mandates a disclosure document, but Item 19 earnings representations are the one unformatted section, and many brands include nothing at all. **The real diligence is talking to franchisees.** Scott takes whatever is in the disclosure document, speaks with a handful of existing owners — most will share their numbers if approached right — and only then builds projections he trusts. Franchising is also where he gets control: he can't control interest rates or markets, but he can control his business, and eventually own the real estate under it. **LINKS** franchiseguidegroup.com LinkedIn: Scott Jones Franchise 00:00 Introduction 01:04 30 Years Across Every Side of Franchising 03:49 The Biggest Misconceptions 05:27 Franchising as an Asset Class 09:34 Who Should (and Shouldn't) Take the Leap 12:36 Designing Around a Rigid Schedule 16:24 Where AI Helps Franchisees 19:15 Why ChatGPT Gets Franchise Numbers Wrong 23:56 Franchising as a Hedge Against Layoffs 29:42 Where to Start With $250K