Do you have to be a full-time owner to own a franchise? Are there ways to own a franchise while keeping your current job? How can you use franchise ownership as an additional revenue stream on top of your existing projects? These are the questions we are going to address in today’s article.
If you have a full-time job or another time-consuming project going on and have wondered if franchise ownership was also possible, then this article is for you. We will cover the ins and outs of whether it is possible to own a franchise without it being your full-time job (hint: it is) and what that would look like.
What Does It Mean to Be a Semi-Absentee Owner?
You will hear a few different terms around this topic: semi-absentee ownership, side gig, investment opportunity, and more. Of these terms, “semi-absentee ownership” is probably the most common, and that is the language we will use throughout this article.
Whichever term you use, each one of them indicates that you have something else going on. There is another element of your life that is your “full-time gig,” so to speak, and you spend most of your focus and time on that area. Still, that does not prohibit you from becoming a franchise owner.
More and more often, we talk to clients who work in the corporate world and like their jobs enough that they want to hold onto them. But at the same time, they want to have a secondary revenue stream coming in. When you work with FranCoach, we will help you find a business that will allow you to do both.
What Do Semi-Absentee Owners Do?
The business itself will not be part-time, of course, but your role as an owner will be part-time. As a semi-absentee owner, you will likely spend between 10 and 15 hours per week on your franchise, though this can vary a bit based on the franchisors you work with. Your main job will be managing the manager who is overseeing the day-to-day work at your franchise. You need to hire a person (or persons) who will do all the things you would be doing if you were full-time at your business.
There are also a number of other roles that semi-absentee owners can take on. Some people like to get out and be the face of the business, networking and making connections in the community. If your franchise has a physical location, maybe you will show up there from time to time.
Franchises with semi-absentee options lean slightly toward having brick-and-mortar spaces, but there are also tons of service franchises out there that don’t necessarily need a retail storefront that are open to semi-absentee owners. Maybe your business has an office instead, and you roll in there from time to time. You don’t have to, but it is certainly an option.
The specific focus areas of semi-absentee owners differ, but in addition to managing the day-to-day manager of the franchise, your primary role will be to keep a finger on the pulse of all things related to sales, marketing, and operations in general.
You can do most of that remotely. Franchisors that have a semi-absentee option for their owners will have strong infrastructure and a model in place to allow you to keep your finger on the pulse from wherever you are. Seriously, wherever. You can run your franchise from your fancy corporate office, while sitting on the couch at home watching TV, or even from a lounge chair on the beach somewhere…we recommend the latter.
What Skills Do Semi-Absentee Owners Need?
While we help each owner find the brand that’s a perfect match for them, there are some skills that semi-absentee owners generally share. These skills can set you up for success when running your franchise is not your full-time job.
Leadership
In order to be a successful semi-absentee owner, you need to be okay with NOT being the doer. You have to be able to delegate, putting the right people in the right positions and managing them. Being an annoying, overbearing micromanager isn’t going to help anyone – least of all you.
Discipline
It is important that semi-absentee owners are disciplined enough to keep looking at the business as your business. The key to success as a franchise owner is to follow the franchisor’s plan and put forth the required effort. As a semi-absentee owner, that may be only 10-15 hours per week, but you need to be disciplined enough to commit to those hours no matter what else is going on in your life. As the franchise grows, you can look at staying in semi-absentee mode or becoming more involved in order to scale and grow the business.
Maybe you will own multiple units of a certain franchise, or maybe you will own multiple franchises. You can do those things in a semi-absentee role, and you will essentially be the puppet master of all the pieces you have in play.
Franchise Ownership as an Exit Strategy
For some semi-absentee owners, franchise ownership ends up being their exit strategy from an existing corporate job. Maybe you are just not quite ready to leave that salary. As one of our recent podcast guests said, “The most powerful drug in the world is the paycheck.”
If it’s not feasible for you to leave your job right away, the semi-absentee ownership model gives you the opportunity to get something going on the side. Then, as the business gets bigger, you will have the chance to step away from your old job and launch into the franchise’s business in order to help it grow exponentially as a full-time owner.
Franchise Ownership as a Passive Investment Opportunity
Talk to any financial planner out there, and you will hear a whole speech about diversification. Sure, it’s great to put your money in your 401k – but what you are going to make over the next 10 years with that strategy is far less than what you could make if you took that same money and put it into the right franchise.
Of course, you will need to work at franchise ownership and follow the franchisor’s plan – as we like to say, a franchise is not an ATM. But overall, you will be able to make more money than you would have by just plopping the money into your 401k.
What would you make in 10 years if you dropped $200,000 into your 401k? More than likely, the amount would hover around 8% or 10%, and you’d eventually cash it out.
Now let’s say you put that $200,000 toward owning a franchise. If you do anything even moderately properly from a franchise ownership standpoint, your rate of return is going to be significantly higher than the one in your 401k. Not to mention, you will still have the opportunity to cash out your investment.
Selling Your Franchise
At the end of the day, you will have the chance to cash out on your investment by selling your franchise – if you want to. You might get a multiple of one back. How would it feel if you bought the franchise for $200,000, and then sold it later on for $200,000? That’s not a bad deal. You got your money back and you also made plenty of money along the way.
But sometimes, your selling price will give you back a multiple of two or even a multiple of three. In some really crazy cases, we have even seen a multiple of four. It all depends on the business model and how good of a job you have done building that up.
The Investment Perspective
At FranCoach, our goal is to help match people with the perfect franchising opportunity for them. It’s not randomly picking one and letting the money roll in, it’s finding the right one and getting the chance to have wealth-building diversification within your investments.
Whether you have multiple businesses, you’re working a job, or whatever your situation might be – you have options to start a franchise. Maybe you want to use your retirement, equity, an SBA loan, a non-SBA loan… Whatever funding option you choose, we will help you examine the franchise ownership process from an investment perspective.
Franchise ownership can be something that is always a passive investment opportunity for you, or it can start as a secondary income stream and then get built up to be a viable exit strategy from your existing job. After that, you can go full-time with franchising. It is possible.
The biggest thing that we want to get across is that franchise ownership is much more attainable than many people realize. It takes much less money than you might think – not all franchises are McDonald’s and Taco Bells that cost millions of dollars. There are options out there that cost literally a fraction of that and that you can build great businesses with. Along the way, you will get to regain control of your job and of your lifestyle.
Again, franchise ownership is significantly more attainable than you would think. If you have stumbled upon these articles, then you have some level of interest or curiosity about franchising. You are probably wondering if it is possible for you. Congratulations: You’ve already taken the first step.
Here is your sign that it is time to go ahead and take the next step. As you work with our team at FranCoach, you might discover that this is not the right time for you to become a franchise owner. Since our services are always free, the worst-case scenario is that you come away from the experience having learned something.
But maybe you will find that it is the right time for you. We can help you answer all of those questions. The only way to find out if you’re ready is to truly explore the world of franchise ownership, and our team is here to help. Let’s set up that first call today.
Who Is FranCoach?
FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We've partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.
Our number one goal with our clients is to help them find the absolute best franchise for them to own. Our goal with our Franchising 101 podcast series and this series of informational articles is to help educate people on all aspects of franchise ownership.
Reach out to us to learn more about potentially becoming a franchise owner. There’s never any fee for our service, so why not take the first step today toward your better tomorrow?
Comentarios