Can you generate passive income with a franchise?

by | Mar 2, 2024 | Blog

Have you seen the pitches “invest in a franchise and magically create passive income?

I wish it was that easy.

But it’s not.

Here’s the thing…a franchise can be a great investment for some people.

I know people who have built $1M, $5M, $10M, and even $30M+ businesses as a franchisee with a non-food business.

If you compare the cash-on-cash returns to real estate investing, for example, a franchise can perform better.

A successful franchise can help some people create a safe exit from the corporate world.

Long term, it’s a very real thing that a franchise can become an income-producing asset that you can sell and cash out one day.

And it can be done with non-food franchises.

But (and this is a big but)

You have to build it.

You have to operate it.

And you have to make it successful.

No one, including the franchise company, will do it for you.

They’ll support you, but you have to make it happen (which is why you get to keep the profits).

Some franchises require a full-time effort to make it successful.

And there’s a small pool of manager-run friendly franchises that might not require as much direct time from the owner to operate (the often talked about “semi-absentee” franchises).

Long term, you can build a franchise to become a semi-passive income stream.

(Nothing is truly passive when you own a business).

You’ll probably need multiple units to build a big enough business to enable this.

Many people have done it.

But it’s not for everyone.

Remember this next time you see someone pitching a franchise as a passive investment.

The First Step is a Conversation.

If you have that burning desire to build your own successful business so you can live a life you can only have working for yourself, let’s talk.

The First Step is a Conversation

The first step is a pretty simple one: We have a conversation.

After we speak, we’ll be able to figure out if there is a good fit to work together.