Consumption and Real Estate
Is it possible to be a hands-free franchisee?
Question : Is it possible to be a hands-free franchisee?
I’ve been looking at investing in franchises for some time now.
However, I do not want to be stuck in the operation of the franchise, as I intend to own multiple locations (likely from different franchisors), thus making it impossible for me to handle all the day-to-day, or any other routine procedures for that matter.
What I want to know is, is it possible to run a franchise, being an absentee owner?
Of course this raises the question, “who will take care of the day-to-day duties?”
Staff, naturally. But as with any business, there needs to be management.
I know that for actual properties, you can hire a property manager to take care of all matters relating to tenants (finding and maintaining tenants, collecting rent, paying off utility bills, performing maintenance as necessary, etc.) – but is there a similar service available for the operation of a franchise?
This would include the financial record keeping, staffing, paying off all bills due to the restaurant (phone, cable TV, utilities if separate, etc.), as well as disbursement of payment to employees.
Could I hire somebody/a company to do that on my behalf? Or must I only franchise within my own means?
property management franchise
Best answer:
Answer by weebler76
Yes it’s possible, but depends on the franchisor and the franchise. Some franchises don’t lend themselves to that kind of operation and some franchisors only allow owner/operators. Some franchisors offer the you opportunity to develop an entire area. You typically contract to open a set number of franchises within a certain time period in a specified area. Initially that would probably be the best route rather than having multiple types of franchises. After you are comfortable with that and have everything in place look into other franchises.
Your CPA can provide some of those services and recommend people to help in other areas. The franchisor may also have some people they recommend.
Of course, Maxwell, there are opportunities available to you that would allow you to be a “passive” franchisee. Obviously, if not you, then a competent manager (that you would hire) would be in charge of the day-to-day activities.
Many of the candidates that I assist as a franchise consultant are looking for a complete overhaul in their professional careers. Some hate their jobs, while others feel they’re not compensated at the same level of their performance or for their true worth to the company. Or maybe they’re simply not living their passion.
As an example, one individual I worked with was a high level engineer with an electronic firm. In his case, the pay was great, but he came to the point where his job was too much like “work”. He wasn’t living his true passion, which was fitness. He ultimately purchased a Personal Training and Fitness franchise.
On the other hand, others are perfectly satisfied with their careers, but are looking for an investment vehicle or an opportunity that allows for passive ownership. In essence, they desire the ability to be an absentee owner. There are many very good passive franchise businesses available in a variety of categories. Here are just a few:
Hairstyling. Not to worry, no hair care or styling experience is required. A manager handles the daily operations. This category is perfect for investors who are interested in building a business, not buying a job, by developing multiple locations. This $ 55 billion industry is both recession and technology resistant with a built in demand: no matter the economy, people still need hair care. Being a passive owner also allows for much more free time to spend with family or on hobbies. If you have strong leadership and people skills and a business background, you may want to look further into this opportunity.
Tanning. A great simple service business, ideal for any sales and marketing savvy entrepreneur. All you really need is a good manager and a few part-time employees. According to Health And Fitness Magazine, more than 1 million people visit tanning salons everyday. Consumers tend to choose inexpensive indulgences during tough economic times making this a great recession resistant franchise. Overall, tanning is dominated by independent operations, and this market is underdeveloped with extreme upside growth potential. Also, the profit margins are great!
Smoothie or Coffee. These are fun, smaller businesses that typically are operated from a fixed retail location or a mobile unit or a combination of both. A simple business with minimal risk, they require a manager and a few part time employees, and a very short ramp up time until profit. They feature low inventory requirements and low overhead to operate. They’re a great cash-only business, with huge average margins on sale. Another benefit is the time commitment. It’s completely flexible. You can choose to work part time or full time manage it yourself, or choose to be passive and “manage the manager”. The coffee and smoothie industries are huge, doing $ 8 billion and $ 2 billion per year in sales respectively.
If you enjoy your career, but are looking at franchising as a passive investment, you’ll find many sound opportunities at your disposal. Your franchise consultant can help you identify which business model is best for you and your situation.