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