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In a skilled environment where there is an increasing value placed on odd jobs and side hustles, it’s necessary to make sure you’re thoroughly evaluating latest ventures before diving in. After all, there are only so many hours in the day, and entrepreneurs in particular need to make sure their time is getting used effectively.
From a business model perspective, franchising offers a middle ground between the stability of a corporate job and the uncertainty of a true startup. Franchises provide latest franchisees with a roadmap that details proof of concept and profitability. It’s no wonder that many professionals looking to transition from a corporate role to business ownership consider franchising a viable option.
As a franchise consultant, I have personally observed the value that a corporate background can have when applied to franchise ownership. These aspiring entrepreneurs are hardworking, motivated, determined, and have strong leadership skills (among many other traits). The trick is knowing when to make the leap.
I’m often asked if franchising is something you possibly can do on the side while still working a full-time corporate job. The answer? Ultimately, it depends on your circumstances.
Why franchising might not be a good side hustle
1. Your level of flexibility
The biggest issue that sets franchising against maintaining a traditional 9-to-5 job is the lack of flexibility. There’s no getting around it—running a business requires attention during the workday. Even if you have a manager running it, supervision and the ability to be present at all times are key. That means time and focus that are completely separate from your day job. Only you actually know the way you spend your time each day in your current role.
Imagine a typical workday. You’re in the middle of a job and you get a call that a pipe has burst at your franchise store. Are you able to get up immediately and maintain this urgent matter? If not, you might need to consider whether you actually have the flexibility to maintain each your franchise and your corporate job.
2. What is your initial capital investment?
Side hustles typically don’t require any start-up capital (or may require minimal start-up costs). However, they often require a lot of time and work up front (hence the term “side hustle”) before they generate a semi-passive income. Consider online businesses or affiliate sites that are run entirely online and don’t require real estate, overhead, or additional employees. This isn’t realistic for a franchise.
Because granting a franchise means you have access to business materials, marketing plans, hiring assistance, and a host of other resources that bypass the typical headaches and wasted time and money of the traditional startup path, you have a head start from day one. And while that’s a major selling point for many individuals who are motivated to own a business, it does add to the initial cost of the investment.
There are many different franchise concepts and, consequently, very different investment costs. However, as a rule of thumb, even the minimum capital investment for a franchise will approach $100,000 (the franchise fee alone often ranges from $50,000 to $60,000).
*Note: According to US Small Business Administration website, the franchise fee is described as “the cost of entry. Paying the franchise fee up front opens the door to the franchisors’ proprietary business systems and more. You get the full setup. The franchise fee is literally a license to own and operate a franchise business.”
3. To what extent are you able to provide supervision?
Working hand in hand with flexibility, it’s necessary to understand that a franchise — or any business — is never truly a non-existent business. Even if you hire a manager to run day-to-day operations, you’re still responsible for oversight. You also need to find a way to step in at a moment’s notice if your CEO leaves or is unable to perform his role.
Since most franchises are local and regional brands that fall into the category of on a regular basis essential services, they require local representatives and subsequently will have employees. Due to the nature of worker management, it is difficult to maneuver worker management in an additional way.
When can a franchise be a side hustle?
At the end of the day, a lot of this query comes down to how much control you have over your each day schedule. If your current job allows for flexibility in the middle of the workday (perhaps if you’re employed in real estate, sales, or telecommute and have flexible schedules), a franchise can often work as a side hustle.
In addition, if you have a lot of economic capital, you’ll find a way to hire employees and managers who can balance the workload. Having enough capital can solve almost any time-related problem. However, as mentioned above, it is not a one-size-fits-all solution. You will likely need to invest more time to get your franchise off the ground. Over time, developing a hierarchy of employees and managers can minimize your time commitment.
We all know that with any major profession change, it’s necessary to do your due diligence and make sure you’re making the most informed decision possible. If you’re considering owning a franchise as a side hustle, I encourage you to fastidiously consider your lifestyle and determine whether you possibly can realistically run a franchise after hours or if you fall into a broader category of homeowners who need to dedicate more time to the endeavor.