Should You Take On A Franchise As A Side Hustle?

If you’re looking for a part-time business opportunity, franchising might be the answer. While not the standard, some franchise business models can be run as part-time ventures, making franchising an excellent option for those who want to earn extra.

There are franchises in various industries, so you can choose an opportunity that best fits your interests and skills. Best of all, many franchises don’t require an office or retail space, so that you can run your business from the comfort of your own home.

Franchises Are Part-Time?!

Yes! No! Maybe-so?!

The vast majority of franchises are full-time obligations. You can work at Chick-fil-A as a part-time employee, but you can’t be a part-time owner.

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However, some franchise opportunities can be operated as a part-time venture. It depends on the franchise agreement, industry, and business plan. Most part-time franchises operate as service companies that don’t have physical locations.

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You can see a complete list of part-time franchise opportunities on Franchise Direct. But before you rush into a franchise agreement, consider the pros and cons we review in this article.

Pros Of Having A Part-time Franchise

The Franchisor Handles Most Marketing

One of the significant benefits of a part-time franchise is that the franchisor handles most of the marketing. While you must pay for and display the required signage and materials and promote your brand through word of mouth you are able to target the exact market you want to advertise to, and control the voice and brand used in the marketing campaign. This marketing helps get your business off the ground easier without spending too much time or money on advertising.

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You Do Not Have To Reinvent The Wheel

Another key advantage of a franchise is that you don’t have to reinvent the wheel. The franchisor has already established a business plan, strategy, standards for operations, and possible brand recognition. This makes it much easier to start a business without figuring out everything from scratch.

Business Support

Franchisors succeed when their franchise succeed. Successful franchises provide their franchisees with every resource they might need to succeed. This includes marketing materials, financial templates, business plans, problems solving, and networking support.

Even the most established business is going to encounter hurdles and unknown challenges. If you’re a sole proprietor, you must face these challenges independently. But, if you work within a franchise agreement, you often have access to the brain trust of other franchise owners.

Franchise Equity

Unlike gig work, you can build value and equity with your franchise. You can sell it for cash if you want to quit operating your franchise. Networks of franchise resellers can help you exit your franchise. The measure of franchise equity is determined mainly by revenue.

Be Your Own Boss

Finally, one of the most significant advantages of a part-time franchise is that you get to be your boss. Being your boss allows you to work at your own pace while earning an income. You may have to honor franchise agreements and, of course, respect your clients or customers. But the franchisors don’t hover over you quite the same way a micro-managing middle manager with a Napoleon complex might.

In addition, most part-time franchises can evolve into full-time operations. This is a blessing and a curse (which we will cover later.) So, if you are looking for a way to get out of a dead-end job, starting a part-time franchise can be a transitional step to fulfilling your dream.

Cons Of Having A Part-time Franchise

Initial Costs

Although there are many advantages to becoming a part-time franchisee, there are also some drawbacks. The first is the initial costs associated with franchising. These include the minimum capital requirements, franchise fees, business licenses, and other costs associated with setting up a business. This cost can add up quickly, so it’s important to factor this into your budget before you commit.

Franchise Fees

In addition to the initial costs, one must pay the franchise fees to the franchisor. These fees can range from a few hundred dollars to several thousand, depending on the size and scope of your business. Not only is there an upfront cost and capital requirement, but you almost certainly will pay the franchise group a portion of your revenue.

These franchise fees are used to pay for training, marketing, legal, and support services, so it’s essential to make sure that you understand what these fees cover before signing any agreement.

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Restrict Services/Marketing Agreements

Another potential drawback is that some franchisors can restrict certain services or marketing activities. For example, they may only allow you to open a website or advertise in their approved outlets. Before signing the agreement, you must be aware of any restrictions.

Contractual Obligations

Many franchise agreements are contractual obligations. You will have to follow all stipulations laid out in the contract. You can’t clock in/out. You may not even be able to quit without following franchise exit agreements.

It’s a good idea to hire a lawyer to review your franchise agreement before you sign onto a franchise operation. Even if you can understand the entire contract independently, the adage “two heads are better than one” is never more true than in a contract review.

Time and Management

While a single individual can operate part-time franchises, and if you’re successful, you will develop more business than you can handle. It’s critical due diligence to understand how much time you have to invest and how much time is being demanded of you. (This is the blessing and curse we mentioned earlier.)

If you find you are getting more business than you can handle in a part-time commitment, you will likely have to hire an employee. It’s a good problem to have, but it also adds more complications to your operations. If your franchise is moderately successful, be prepared to turn down the business demand or hire/manage an employee.

Lack Of Financial Privacy

One last potential drawback is that you may lack financial privacy running a part-time franchise. The franchisor will likely require reports on your operations and finances, so you must be aware of this ahead of time so that you can plan accordingly.

Just like having a lawyer review your contracts, it’s paramount that you have an accountant review your bookkeeping. Even Warren Buffet and Charlie Munger, two of the most successful investors in the world employ accountants. You’re part-time franchise obligations may not ever reach the scale of Berkshire Hathway, but the financial consequences of sloppy bookkeeping can be dire.

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Conclusion

There are advantages and disadvantages to consider when considering a part-time franchise. It’s essential to weigh all the pros and cons before deciding so that you can make sure it is the right fit for you.

You can access proven business plans, strategies, and brand recognition with the right franchise without reinventing the wheel. However, some drawbacks, such as initial costs and lack of financial privacy, must be considered before signing any agreement.

Ultimately, franchising could be an excellent option for a side hustle if you have the funds available and are willing to put in the time and effort.