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In a professional landscape where gig work and side hustles are becoming more and more prevalent, it's important that we carefully evaluate new ventures before diving in. After all, there are only so many hours in a day, and entrepreneurs in particular need to make sure they manage their time efficiently.
From a business model perspective, franchising offers a middle ground between the stability of a corporate job and the uncertainty of a true startup business. Franchises provide new franchisees with a blueprint that details proof of concept and profitability. It's no wonder that many professionals looking to transition from a corporate role to self-employment consider franchising a viable option.
As a franchise consultant, I've seen firsthand the value that a business background can bring to owning a franchise. These aspiring entrepreneurs are hardworking, motivated, determined, and have strong leadership skills (among many other qualities). The trick is knowing when to take the plunge.
I'm often asked if franchising is something you can do on the side while still working a full-time job at a company. The answer? Ultimately, it depends on your circumstances.
Related: These 7 Side Hustle Franchise Types Can Help You Make Money Full Time
Why franchising might not be a good side job
1. Your level of flexibility
The biggest issue that puts franchising at odds with keeping a traditional 9-to-5 job is the lack of flexibility. There's no getting around it – owning a business requires a lot of attention during the workday. Even if you have a manager running the business for you, oversight and the ability to be on hand at a moment's notice are critical. This means time and focus that are completely separate from your day job. Only you really know how much time you spend in your current position each day.
Imagine a typical workday. You're in the middle of a task and you get a notification that a pipe has burst in your franchise business. Can you get up and take care of this urgent matter right away? If not, you may need to rethink whether you really have the flexibility to maintain both a franchise and your corporate job.
2. How much initial capital you can invest
Typically, side hustles require no initial capital (or minimal startup costs). However, they often require a lot of time and work up front (hence the name “side hustle”) before they generate semi-passive income. Think of internet businesses or affiliate websites that operate entirely online and don't require real estate, overhead, or additional employees. This isn't realistic for owning a franchise.
Because when you get a franchise, you have access to business materials, marketing plans, recruiting assistance, and many other resources that save you the usual hassles and wasted time and money of the traditional start-up route. So you have a head start from day one. And while this is a major selling point for many who want to start their own business, it does increase the initial investment cost.
There are many different franchise concepts and, accordingly, very different investment costs. However, as a rule of thumb, even the minimum capital investment for a franchise is close to $100,000 (the franchise fee alone is often between $50,000 and $60,000).
*Note: According to the U.S. Small Business Administration website, the franchise fee is referred to as the “cost of entry.” Paying the franchise fee up front opens the door to the franchisor's proprietary business systems and more. You get the complete set-up. The franchise fee is literally a license to own and operate the franchise business.”
3. How much supervision can you provide
In addition to flexibility, it's important to understand that franchising – or owning a business – never really means being away. Even if you hire a manager to handle day-to-day operations, you're responsible for overseeing them. In addition, you need to be able to step in at a moment's notice if your general manager leaves or is unable to fulfill his or her role.
Since most franchises are local and regional brands that fall into the everyday essentials category, they require local representatives and therefore have employees. Due to the nature of employee management, it is difficult to turn employee management into a part-time job.
Related topics: The pros and cons of franchising your business
When can franchising work as a side job?
Ultimately, this question depends largely on how much control you have over your daily schedule. If your current job allows you flexibility during the workday (for example, if you work in real estate or sales, or if you work from home and have flexible deadlines), franchising can often work as a side income.
Additionally, if you have a lot of capital, you can hire employees and managers who can balance the workload. With enough capital, almost all time-related problems can be solved. However, as mentioned above, this is not a silver bullet solution. You will likely need to invest more time to get the franchise up and running. Over time, developing a hierarchy of employees and managers can minimize your time commitment.
We all know that with any major career change, it's important to do your due diligence and make sure you're making the best decision possible. If you're considering owning a franchise as a side hustle, I recommend you carefully consider your lifestyle and decide if you can realistically run a franchise on the side, or if you're in the larger category of owners who will need to invest more time into this endeavor.