Ep748: Kenny Rose – Don’t Invest in Anything You’re Not Fully Educated In

Andrew Stotz 00:02
Low fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it, ladies and gentlemen are on a mission to help 1 million people reduce risk in their lives. And I want to thank you for joining that mission. Today. Fellow risk takers this is your worst podcast hosts Andrew Stotz, from East dots Academy, and I'm here with featured guest, Kenny Rose. Kenny, are you ready to join the mission?

Kenny Rose 00:35
Oh, I've been on the mission. I'm ready to join your shift too.

Andrew Stotz 00:39
All right. Well, I'm super excited about having you on to hear about your mission. Let me introduce you to the audience. Kenny is the Chicago based founder and CEO of FranShares, a platform that democratizes franchise investing. With over a decade of experience in the franchise industry. Kenny has worked with over 600 franchise brands in more than 100 industries. He is an expert on franchise evaluation and has helped individuals identify the best ways to deploy capital into franchise ownership to maximize return on investment and operation. Kenny founded FranShares to allow individuals to invest in a diversified portfolio of franchises with as little as 500 books, backed by Chicago ventures, his platform is aimed at creating passive income streams for investors. Kenny, take a minute and tell us about the unique value you are bringing to this wonderful world?

Kenny Rose 01:39
Thank you so much. Well, amazing introduction, as always, and very happy to be here. And you're the value I bring? Well, for one, most people don't know much of anything about franchises other than the fast food world. And so I like to be a resource for like explaining what the F word is and why you should care about it when frankly, you kind of overlook it. And I bring a realistic approach to things I don't like getting caught up in the fads and stuff. I want to cut to the core and get realistic insights on stuff. So that's why I'm bringing it up sticking to it.

Andrew Stotz 02:06
You know, it's interesting about franchises. You know, when I thought about business when I was young, I never thought about doing a franchise I either. I just maybe I thought it wasn't that creative. Maybe I thought it was too difficult to do or required too much money, I really don't know. And then I want I mentioned we were talking earlier that I read the you know, the great book by Michael Gerber, the E Myth. And I read it when I was young, and I recently reread it. And of course, I have an open invitation for Michael to come on the show and talk about his worst investment ever, which would be interesting. But I stopped when he really got into the details of franchise. And I wonder why. So tell us a little bit about how people feel about franchises. How you want people to understand, and particularly because in your case, you're like, you know, to start a franchise you can benefit from franchise. So tell us a little bit about what you're doing.

Kenny Rose 03:07
You know, I call it the F word of owning a business because people hear it's a bad word. And honestly, I used to be the same in my middle school early high school years, I grew up in a town that didn't allow franchises there. They were said no national chains. And so like this was very alien to me. And honestly, I think that's where like kind of the open mindedness came about because I was introduced to it. And honestly, I thought to myself, Oh, it's McDonald's subway, Taco Bell, like, it's all fast food. And that's what most people think. And they think like, oh, I want to like have my name on it, or I gotta create everything, or there's so much head trash, and the person introduced me to it. He was the CEO of a company that coaches CEOs. And I'm like, What do you know about franchises like my company is a franchise? Like Wait, there's a franchise for coaching CEOs what else is out there? I find out haircare automotive painting, waste management, like everything is franchised. And that's why it's almost 4% of the economy. Because it's so many industries out there. And that's why I got into it. I'm like, I call it the left lane theory. Everyone's going right, I want to go left. And so I thought about this, and I got into the franchise brokerage space because it was just so unique. And I love the challenge of explaining it to people because everyone's looking for not everyone, but a lot of people they're looking to own their own business. They're looking for being their own boss, increasing their income, like all these things that come with owning a business and entrepreneurship. And that's like, you know, franchising checks all of those boxes. And frankly, if you've never started a business on your own, and everyone who has knows this, those first five years are a nightmare. You have to figure so many things out you don't know what you don't know. And it's just gonna keep coming at you. And so with the franchise and I was a victim of the same thing because like my father's an entrepreneur, I watched him succeed and failed businesses. And I knew I wanted to be an entrepreneur, but I didn't have that idea. I was like, what is the idea? Yeah. And then I got used to franchising and speaking of franchises for everything, the franchise brokerage I was with, that's a franchise. And so I got to get plugged in. And we're in everything about how to run this business. And I, you know, did it for a year, about four or five years. And it was like, Okay, that's a business in a box, like I get it now. And so if you can remove the if to create it, and we'll talk about how we remove the too much money part. And honestly, the difficult part, it's, frankly, it's easier than starting a business in a lot of ways. You just have to find the right one that fits you and your skill set. But I think what a lot of people don't like about it, when they hear that effort is they immediately picture back in the 90s or something, they walk into a McDonald's and they saw someone behind the counter McDonald's, and they're just like, Ah, I want to be sad if I'm stuck behind the counter. And like, that's not what franchising is, like, fast food is one industry and franchising, it covers hundreds of different industries, like, honestly, I would blow your mind with how many different industries are out there. And you didn't even know we're industries are ones that are like, there's franchises in that. It's just such a big world. And that's what I love about you can tell I get excited about it, because I'm just like, I feel like I'm just opening the box for everyone. I'm like, Yeah, you will walk right past it. There's some good here.

Andrew Stotz 06:15
You know, it reminds me of a story when I studied at Cal State Long Beach, and it's full of beautiful women that were, you know, beautiful. And I was just a guy from Ohio. And, you know, I didn't have much to offer I felt about myself at the time besides my radio voice, but that didn't really have much value at that time. So, but I remember sitting next to this really beautiful girl, and she and I talked and we kind of were joking around about how we may you know, could date or maybe not and all that. And she said to me, you know, I wouldn't date you because I said why it's just you're boring. And having a sharp wit, I looked at her with a smile. And I said, Honey, someday you're gonna want boring. And I really did have a boring life. And I kind of purposely did it. I focused on school and focused on trying to improve myself. And knowing that over the long run that would really provide me with a better future. And so I really was boring. And I tried to push myself to study on Friday nights or Sunday mornings to try to like really test them myself. So I was going through somewhat of a boring phase. But the reason why I mentioned that story is because when you start off with a business, like we started a company in Thailand, my best friend and I called Coffee works. And we're supplying coffee to hotels and stuff were b2b. And, you know, in the beginning, it was all originality. But now after 30 years, it's all about replicating, repeat. It's all about consistency. It's about delivering the same experience over and over. And all of a sudden you realize that that's what franchises are all.

Kenny Rose 08:02
Exactly. It's funny you say that with boring, because in franchising, we have a joke that boring is sexy, because like, they'll franchise stuff like screen door repair, and you're like, that is so boring. It's like, you can make a good six figures doing that. And it's a pretty simple business. You're like, wait, what? You know, like when you're going for the same sexy, flashy thing, everyone else's. You're just another one in there. Versus, again, big fish little pond like franchising can seem boring, but honestly, like, I feel sexy doing I never thought I'd say that when asked, but you know what?

Andrew Stotz 08:34
Let's do it. And then let's talk about the business Fran shares and what you're trying to do. Maybe you can explain, like if people go to your website, what are they going to see? You mentioned as little as $500, what's the benefit of what you're doing? We've now discussed the benefit of franchising, which I think has a lot of merit out there. But what would you say is the benefit of your business?

Kenny Rose 08:59
Yeah, see what I realized a while ago, in my years in the brokerage space is there's a big separation between where the money comes from and who the operators are. Because if you use like the McDonald's example, if you need like a million bucks in cash to get rolling, and most people don't have that. And so the very, very wealthy people or private equity come in, put the money down and they pay as little as they can to General Manager to run it for them. And they wonder why they get bad results when they pay people poorly. But franchising in the decade, all the years before 2000, even before 2010 They were all about owner operated businesses, that's what franchising is supposed to be. But the cost to own a franchise went up so much with the cost of build outs and real estate and so it wasn't really able to catch up with like, we need an owner operators who are trying to thrive and their own business because it's too expensive. So I said, let's separate the money and the people who run it. You know, we want to fund it. The people who are the real operators, they're the ones who don't get the shot yet have all this skills and all the drive to go do it versus going on people who are like semi retired, they're like, oh, yeah, I'll throw somebody in that and get a GM. And it's just, it just doesn't work out. And so on the other side, you have pretty much everyone in America and most of the world knows what a franchises and they like the idea of specially passive income. Alternative investments can be good or bad, but you think about ones that they like, number one, alternative assets, probably real estate. And they like one of the main reasons they like is passive income. And you'll get what other passive income instruments are out there, especially ones that you can actually understand as a general investor. And you've got real estate, which, frankly, everyone's moving money and alternatives now. So that's why you see institutional investors going all the way down to single family homes. So you're trying to compete with institutional money, and you're going to not see the returns that you did in the past. versus, you know, in the franchise world, it's not as easy as you build it. And they will love to like think it's you build and they will come it's you need a good operator. But frankly, when you invest in it, you get these passive incomes as well as the equity growth portion of it. And so when you look at like, that is an alternative investment that's people are looking for. And so with French shares, we separated the capital and the operators. And we gave these investors the ability to get into franchising without have to work at full time or even part time. And without having to do a six or seven figure cash outlay, and without having to have the right skill set or leave your day job. And so it was really just separating those two. And also, you saw this happened in the real estate world decades ago, the fact that it had happened in franchising was just something that was massively overlooked, because they got stuck on that effort. Yet private equity and family offices have been loving life investing in franchises. And so it was really about opening that asset class to everyone else. And when I say everyone else, it's not like just institutional, but even a lot of if you're not one of the top 15 or 20 private equity groups in the in that focus on franchising, they don't see deals come to their desk, family offices don't see deals come to their desk, and especially even like your accredited or non accredited investors, they don't get the opportunity. So it just seemed like a natural thing to happen.

Andrew Stotz 12:11
So explain what happens if, let's say let's say someone puts in $500 or $10,000, or whatever it is in the franchisors are they buying into one specific franchise? Or are they buying into a pool of franchises? And how does it work?

Kenny Rose 12:25
Yep. So I'll tell you how it works now and how to work later to starting off. You know, I realized most people don't know much about franchising. And so having them pick individual ones is like sending a high score to go pick stocks you're like, Maybe I'll get lucky but you don't know what you're looking at. And so to get started we created a diversified portfolio so it's diversified by industries diversified by geography, and diversified by brands. And so I want to show people the width of the franchise industry getting started so we did one of the still top 10 fastest growing food franchises one called teriyaki madness. Which leadership team is amazing the growth is incredible. And honestly when you look at what the competition is for fast food or even quick service Asian, most people can't tell you when outside of Panda Express but you know, that's been instilled a lot of people will have extra head trash about food, but yet that's not what they that's what they know franchising four. Then on the other side of the spectrum. I love the boring unsexy industries and waste management you will the other one the portfolio is called smashed by trash. And it's so simple. It's so great. You know, you think about anything in the commercial space that's got like construction, manufacturing distribution, they've all got those giant open top dumpsters costs money to haul that off to the dump every time. So smashed by trash drives this giant array with a two ton drum with teeth on it and mashes everything down, and keep filling it back up again, less chips, the dump saves you money. So simple. And you wouldn't have known that was a franchise. But other than that, that was an industry. And so we want to do take some takeout subtraction. That's why we call it the TNT fund and little pun on one hope it's explosive results too.

Andrew Stotz 14:07
So let's discuss that for a second. So when someone puts that money in that then you deploy that money to an individual to a shares in a master franchise or how does it work?

Kenny Rose 14:23
Yep. So we're investing in operators that are looking to start or expand. And again, we'll talk about how it changes more down the road. But you know, there's a big problem that like where you get funding for franchising is either really banks or private equity. Private Equity won't give you a check unless you can really deploy 30 baby but really like 50 million plus. And then banks have a whole like collateralize everything, extreme net worth and income levels that you need to be there. It's such a complicated process. And yet you've got these great operators who built the foundation they started the locations and that's when the Raiders fan so if you have to reload Haitian's, you're ready to expand the bank's gonna look at it like, well, you own three houses, houses. And so they see this, you've got all this debt. But looking from the franchise world, I'm like I'm seeing the results from these businesses and you've built the foundation, like you're when I should be pouring gasoline on this fire. And a great example is we have this husband wife team we invested in in North Carolina. And these two met while working at Buffalo Wild Wings corporate, and they basically developed the entire southeast. So things like 150 locations while working for corporate, but launching training and growing stores, dream of franchisees, but you know, you work for corporate, you're not always going to have a couple million bucks laying around to build out a whole empire for yourself. So they were friends, they became franchisees for teriyaki madness, first location, they actually just bought one that was already there doubled the sales of like two months, because they're amazing operators, and you're like, yeah, these are drink franchisees. Banks are not going to look at them like that. Yeah. And so we will get them differently, because we're partnering with them. And so when you invest in the portfolio, you're investing in all these different operators who have the track record, but really, the system isn't working for him.

Andrew Stotz 16:07
And and and just let me just ask you about that. So let's take this, this couple as an example. And they say like, we want to expand to 10 locations, let's just say in our first phase, basically, your the benefit that you're bringing them is we can provide the capital, if you can provide the operation.

Kenny Rose 16:24
You know, that's just the beginning. Because that's that was my initial idea was bring the capital, but I don't think capital is enough. Like, when you get a loan from a bank, they're giving you capital, and you got payments. And that's not a relationship. And frankly, no one likes their bank. And most people don't like working with a lot of times don't like working with private equity. And so I tried thinking more and more, how can we be more value add to them. And it's both what we give them and where the money comes from. So one thing is that we prioritize local investors. So like people in South Carolina get first dibs on investing. Okay, that's interesting. Yeah, because when you think about it, community makes franchises work. People go there, they're all part of this community. People don't see franchises as small businesses, but they're local owners employing local people keeping money in the local economy, you spending money at Trader Joe's actually sends money out spending at a local franchise keeps it in. And so when you've got the community investing in these businesses, when you invest in it, they're going to be a customer, same reason people have Apple stock, buy have iPhones, people have iPhones buy Apple stock. And so you've got this built in customer base, but at the same time, you've also got these evangelists there, everyone who invest in those teriyaki badnesses, they're going to never go to Panda Express again, and they're going to tell all their friends to never go to Panda Express again. And so you've got kind of this, like Reddit for small street effect, but on the local level, because when you think about your investments, how many of them do you actually see in the local community, you know, and be like a part in that, even when you invest in real estate, a lot of times, it's not in your city, not in your state to be 1000s of miles away. And you know, it's just a line item in your portfolio. But there's something to be said about some that makes money, but also, you can point to and be like, I'm a co owner in that.

Andrew Stotz 18:04
So then, so just to look at that value add and basically you're kind of a market maker, bringing people who have some capital in that local community together with good ideas in that local community. I can see the value add there. What my question is, are you just matchmaking them? And then they're investing in individual franchise operations? Or are they giving that money to you? And then you're managing and then you're having an ownership in the individual franchises? Or are you setting up a master with that couple? So that just gets access to all of them? Or how does it work?

Kenny Rose 18:42
Yes, so we can't really do like a blind pool without being a registered investment advisor, which that will be coming down the road. But so people invest we tell them what they're investing in, we show them geographies, talk about the operators talk about the franchises themselves. And so, again, starting off, you're getting into like a diversified portfolio of franchises. But you know, as we continue to scale, you'll be able to do certain brands, you'll be able to do certain industries, like a health and health and wellness portfolio, you know, I cannot wait for when we have the work, like as we continue to scale, you know, I'm in Chicago, I want there to be a Chicago portfolio. So where I go to eat, get my haircut, go workout it and well changed. I want a piece of motoring contributing to my investments by doing what I was doing anyway.

Andrew Stotz 19:27
So let's talk about the future, then what's the structure that you're going to be doing?

Kenny Rose 19:32
Yes, so um, you know, there's a couple different parts to it. You know, I'd like right now, as I mentioned, we do a lot of investing into existing franchisees and our more owner operator and help them scale. But a big thing that I'm working on and we're launching fairly soon here is actually similar to Chick fil A. Do you know how much it costs to own a Chick fil A

Andrew Stotz 19:51
No, take step $500,000.

Kenny Rose 19:57
If you were to do it all on your own, it'd be like a million and a half If that's not what it costs, it costs 10 grand, because Chick fil A realized this owner upgrade or problem a very long time ago. And they said, We want owner operators. That's why Chick fil A is known as the hardest.

Andrew Stotz 20:12
That's the constraint, finding those people.

Kenny Rose 20:15
Yeah, because frankly, they're every other franchise, they're waiting for those who have the money now who have the heart and the experience, and Chipley realize this, and they said, you have to start working in at the lowest level, work your way up to a manager and then apply to be a franchisee. But if you get it, it's only 10 grand. And because of this, it's harder to get a Chick fil A franchise than to get into Harvard. And, and there, and there's a reason it's yes, they have great chicken sandwiches. But frankly, that stuff, the only reason they're the highest average unit volume franchise out there, it's those people inside franchises are people as much as food. And, and so a big part of what we're doing. And there are downsides. How Chick fil A does, I'll be totally transparent. Like, they take a massive royalty off the top a massive royalty on profits. And, you know, but they're also making their money back for like doing the cash outlay, while those owners don't have equity. And so what we're creating, it's really this model of how you can do become, you know, go from an employee to a franchisee, but actually have equity and actually be able to grow with it scale more. So we're calling that the easy model employee to franchisees, franchisees are often called Z's ze in the industry so easy. And so that's where I'm really excited in the future. Because that's gonna be when you're investing in people you believe in even more, that's when you're going to realize that you're truly creating jobs and opportunity in your community and for lesser advantage people. And that's also when you're going to like really see the love and care. And there's a difference when you walk into one franchise that's got an owner operator who's there making the show work and love and everything about it. And that one who's just a general manager making bare minimum that they should be paid.

Andrew Stotz 21:59
Okay, so let's just summarize that. So some summarize it, you got so much going on, I'm just trying to understand it. But to summarize that, what you're trying to do is in the future, it sounds like or is this in the present, is that what you want to be able to do is to be able to provide capital to people who are working in franchises and see the value of it, and say, I want to either start a franchise of this particular company or another franchise, maybe I saw all the bad things. And I think the competitor across the road is even better. And but I don't have the millions or half a million, or whatever it would take to set it up. So here comes Fran shares to be able to say, if you're the right owner, operator, we can provide funding. Yeah,

Kenny Rose 22:43
exactly. You know, an example of it is I was talking to franchise, it's actually today, actually. And we were talking about like, who ends up being franchisees? what's right and wrong about it. And they forget the timeframe, right, we had 2000 applications to be franchisees. 500 of those were financially qualified. And then we went with 50 of them. And so it's like, yes, they're being selective once they get people in the door. Well, I see that you left out 1500 people, because they didn't have enough money. And frankly, they were all saying how one of those like 550 that they were talking to we're like billionaires with private equity groups. And do you think those people are setting foot in those stores? And what do you think's better for a store? Owner Operator inside, or check writer outside? You know, that's, that's the base of it. And so I gotta change franchising in my opinion. But I'm also heavily biased.

Andrew Stotz 23:35
We accept your bias. Well, there's so much more that I want to learn about. And so I think for all of us, just go to FranShares.com, to learn more about it. And maybe we'll have you back on and talk more about it in the future. But now it's time to share your worst investment ever. And since no one goes into their worst investment thinking will be tell us a bit about the circumstances leading up to it, then tell us your story.

Kenny Rose 23:59
Yeah, so this is not long after I graduated college, I actually went to San Diego State. So we got that Cal, Southern California. And I became a financial advisor at Merrill Edge up in San Francisco. And, you know, this actually followed my best investment ever, which is hilarious. And also, part part was also part of the problem. You know, it was 2013. And American Airlines and US Airways merged. And the Justice Department challenged the merger and fear it was a monopoly and both the stocks just plummeted was US Airways, I believe was a Mr. Q at the time, went from like 250 I think, all the way down to about a quarter per share. My older brother is a pilot and I mean, he did ground school for aviation when he was 13 like lives and breathes that industry. And so I learned a lot from over the years also knowing that they challenge every merger and that they always get allowed like they try have to challenge or else everyone's going to try and do whatever they want. And so I threw every nickel and dime I had at that. And then the deal went through, and the stock went up to $12. Or, yeah, that one was $12. And then the other one was like, between American Airlines, US Airways, I went on both. The other one went up, like to $23, I think. And so it was my first year out of college. And I was like, Hey, let's see what I can do. And absolute home run, like I always have, I wish I had more trades like that these days, I had more behind me. But um, so you know, I am feeling very proud. And like, my Merrill Lynch life in San Francisco, and I'm excited for like my next big one. And then I was talking to another financial advisor, friend of mine. And he says, Have you heard of AMD? And I said, No, I don't tell me more. And so I started learning about the ruler, the world of processors, and microchips. And I've just like, this is all very fascinating. I don't understand a lot of the words that you're saying. But also, I knew that they were very good at what they did. And so, you know, I bought it when it was at, like, $4. And then maybe like, a year later, it went down to 250. And I'm down like, 40%. And I'm just like, Mercy. I'm out. Like, I can't believe I did this. And but in addition to losing that another reason, it's the worst investment is because if I had held that today, do you know what AMD is trading at

Andrew Stotz 26:32
now? So okay, remind us? What did you buy it at?

Kenny Rose 26:36
$2.50 $4.

Andrew Stotz 26:39
Yep, yep. $4, you sold it at 250? What is it trading at now? Some astronomical price

Kenny Rose 26:45
over $100. And there's probably been some I haven't even because I was one start ticking up. I was losing my mind. And honestly, that's where it currently I don't know if there were splits or anything. But like, yeah, so it was at minimum 20 400% return, I would have been getting probably even more. And so it was like I lost a bunch of money. And then I also didn't get life changing money.

Andrew Stotz 27:11
So how would you describe the lessons that you learned?

Kenny Rose 27:14
Um, you know, when I changed how I invested for that deal, like, I understood aviation through my brother. And I also really like, again, I go into the left lane when everyone's going to the right. And so that's where I always like doing it. And this was just, frankly, sound advice. And I just, I wasn't looking for that at the time I was in my early 20s. And I wasn't thinking about how much I was willing to lose what my time horizon was, what my maximum loss would be. And frankly, the number one thing was education. I did not have education on what I was investing in. And since then, I have made education a top priority investing, I lost my franchise brokerage days on fire more people than I ever took on, because I give them like, things to research and things to look at. And it's like, Okay, what did you learn, they say nothing like, if you're not going to try here, you're not going to try when it's your own business, and I'm not gonna be responsible for you losing. And so, you know, it's be educated, PICK IT investment style, you know, stick with it, and things that you don't know, outsource to those professionals that know those spaces better.

Andrew Stotz 28:22
Yeah, it's, maybe I'll summarize a couple of things I take away. I mean, I love the idea of, you know, improving ourselves. And I had a guy I work with many years ago that like he would just stay up at night after work trying to figure out a problem that we had at work. And he would basically come into the next morning, go, I figured it out. And here it is, I did some coding or whatever. And once I saw that guy says, I just want to work with this guy for the rest of my life. So he and I have basically been business partners for 25 years, almost 20 plus years. Oh, well, just as much as my other business partner Dale in the coffee business, this guy in the this time man in the finance business is like that. But the idea of the passion for learning and figuring things out. I think it's such a critical thing. And if you don't have it, you really need to stop and think Come on, how are you going to start to build the habit of learning. So that's the first thing I take away. The second thing is that, you know, if you mentioned that you needed to you didn't think about your time horizon. So let's think about that. For a young person listening to this right now. You're 20 years old. Let's just say you're 20 ish, you're just out of school, you get a good job. You want to retire when you're 60. Your time horizon is 40 years. But it's not 40 years. You don't want to die when you're 60. You want to live a happy retirement until you're 90. That's another 30 years. We're talking about 70 year horizon. And so the best solution for A young person is to build a diversified portfolio either of individual stocks, which is difficult, and is a full time job. And you've got to have the right number of stocks so that you, you don't just match the index. But not enough, not not too few, that you risk all your capital or just buy an index and realize that the most important thing that a young person can do at that age is the contribution of the money into the index is say, my goal is to get $100,000 into an index fund. That is a whole market or the whole world, there's a fun, like the VT fund, a Vanguard fund that owns almost 9000 stocks around the world, you know, and that put set your goal of getting 100,000 in there before you even start thinking about picking individual stocks. And that 100,000 At the age of 20 ish is going to grow to be multi millions by the time you get to 60. So that's my big takeaway. But anything you would add to that?

Kenny Rose 30:59
Yeah, we actually did a, we created a port with YouGov, talking about the same type of thing. And we were, we were trying to see what people's time horizon is what they look at. And it was a really interesting, because it wasn't entirely what you think, you know, young investors, like people tend to have a pull ups, I can think of some of the figures here in a sec. I learned pulled the forks, we went very in detail on like the highlights, I don't like to misquote either. But let's see. You know, I'll, I'll pull this up for a sec, but it was basically how much like, younger investors had much shorter time horizons than you thought. And it was baffling because, like, you know, it like classic financial advising is that like, Yes, you got a higher risk, we should have hired you longer time horizons. And there was why can have higher risk, I need a shorter time horizon. And honestly a lot of is that people want to be rich now. And they don't want to be patient and wait, you know, it's you get rich fast, it's not work for people, you get rich, slow, and you laugh at those who are running, you know, and so it's really interesting how, like, their time horizons just don't align with what they should be. Because it's not the same age as it was before, I think because like, a lot of things have gone up so much like buying a home is so impossible in some of these markets. And so they're like, how I can't do with my income, I need to make it up in other ways. So it's really interesting, and part of where we are, I don't think you can educate people until you've been educated first. And so we want to get to that side of things like where are Gen Z and millennials and every other generation? Like, what are their time horizons? And why do they think that way? You know, what are they aiming for? And so I don't like to tell people what to think I like to understand their thinking and see if it works for him, you know? Yeah, it's really interesting. Yeah. So

Andrew Stotz 32:53
based on what you've learned from that particular story, and what you've continued to learn, what's one piece of advice, or one action that you'd recommend our listeners take to avoid suffering the same fate?

Kenny Rose 33:05
Do not invest in anything you have not become fully educated in. That is so important. Like, people ask me all the time about like, you know, return some French shares, and all these things. I'm like, go get educated first. You know, it's like, if someone started asking you these basic questions on stocks, it's like, whoa, backup, do not invest in anything until you know what you're doing. Or you can learn about it, like people try investing in real estate to get rich quick, and then they lose all their money, because they didn't educate. They read a headline on like, how this can work? And yes, it's I, honestly, I mean, we're building a new asset class. And I've always been a very ethical person. And I think we will grow this to be the biggest thing by continuing to do so. And so I tell people, like, don't invest everything you can into one offering, spread, be educated and spread it across multiple ones be diversified. Because I don't want you to come in for one big investment. I want you investing for the rest of your life. And so like becoming educated in that, and that's one of the reasons I love franchising, because again, people don't know all this about it. Franchising is regulated by the Federal Trade Commission. And so you are actually every franchise has to publicly disclose everything about themselves, leadership, Team finances, how much it costs to start a location, what they can make if there's lawsuits against them. All of this is publicly available, and we like to make sure people can see it and like when we talk about projections and stuff, yes, I think our operators will do better than other ones in the system. But most of these franchises they're able to show what they're like average returns on our high end and low end. And just back to my brokerage they say the same thing. Look at the average, who are half the average that is great, but do not get sold on the high end do not sold on the low end. And so beavers provide projections I'd rather under promise and over deliver more than anything else and so it's get educated To like, know where things are coming from, like, fuel, people can get ripped off and investing and all sorts of things. It's because they didn't do the homework and I love franchise, you can do homework outside of us to like, yes, we give you a ton of resources. But third party verification is just amazing.

Andrew Stotz 35:15
Yeah. All right. So what's the resource that you'd recommend for the listeners?

Kenny Rose 35:20
Well, if you're interested in the franchise world, we actually created an investor guide to help people get educated on franchise not just how to invest in franchise but how to get educated on franchising and know things like what I just mentioned about the FTC and everything about franchising. Another one I just I personally love because it's very, off the beaten path is they've their newsletter called exec, some run by like a financial meme group called liquidity. They make it fun, and they're very educated. And it's just a lot of like great info in a great digest to keep you at top. So if you're not diving into literally everything, you still get Wall Street people who are giving you such great advice. And these people. I mean, it's all the insiders that are sharing stuff with each other. And so like you hear about layoffs that are coming at these companies to like, everyone talks about, it's like a great place to listen to,

Andrew Stotz 36:11
what is that a call?

Kenny Rose 36:14
So the influencers called liquidity li T Quiddity. And then they have a newsletter called exec sub like executive summary. Okay. Got it. Summary of the summary.

Andrew Stotz 36:26
Perfect. Okay, I'll have that in the show notes and the resources on Fran shares.

Kenny Rose 36:31
Yeah, so obviously, you can go to franchise.com. But I will send you a link that you can post in the show notes. Where to grab that education or investor Research Guide.

Andrew Stotz 36:41
Fantastic. And last question, what's your number one goal for the next 12 months?

Kenny Rose 36:48
So many goals, but really, it comes down to what we're doing with Fran shares like I had this seven years ago, probably. And I've been planning very patiently to get here. And you know, I want to bring on another 10 Plus franchise brands. But the real goal is to get us to 100 million in gross investment volume on the platform. That is my goal for the next 12 months. And believe me, I will hate it. Sorry, we will hit it. team is amazing. I can do nothing without them.

Andrew Stotz 37:17
Well, listeners there you have another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risks in their lives. As we conclude, Kenny, I want to thank you again for joining our mission and on behalf of East Arts Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Kenny Rose 37:42
I mean, there's so much I like to think that you especially I couldn't get this award without you. My parting words is keep an open eye you know, you never know what's good until you research it. And I think people like to hop on ball it's already grown instead of rolling up their own.

Andrew Stotz 37:59
And that's a wrap on another great story to help us create, grow and protect our wealth fellow risk takers let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast hose Andrew Stotz saying I'll see you on the upside.