What is a Passive Income Franchise?

The dream of many a small business owner is to eventually generate a low-involvement, high-profit business. In a phrase, many SBOs dream of passive income. It’s a concept that, with the right business smarts and up-front work, can yield fruit year after year for many kinds of businesses.

And you may be surprised to learn this includes franchise businesses. So, what are passive income franchises? And how does the business model relate to your financial goals? Let’s explore this novel concept together.

Defining a Franchise

You likely already know the rough framework around the concept of a franchise. The International Franchise Association defines a franchise as an involvement of a franchisor and a franchisee to:

1. Distribute products or services,
2. Under the franchisor’s brand trademark or trade name, and
3. Within an agreement in which the franchisee pays for the right to use the franchisor’s name and system.

Essentially, it’s a business agreement between what is typically a large corporation and an SBO. And specifically, one that benefits both parties as a branded business is launched.

Is Owning a Franchise Passive Income Possible?

We’ve written about this before, but it’s worth repeating. Franchises, especially in the goods corner of the market, hold enormous growth potential. In fact, this year alone the franchise industry stands to grow 4.1%.

Obviously, every franchisee is going to experience their own journey. But certainly, there is a great opportunity for financial success.

Turning Franchise Opportunities into Passive Income

Many SBOs will tell you that they are everything to their business. So then, how does an SBO turn their franchise business into franchise passive income? The key is to not be everything to your franchise.

As your business grows, it’s likely you will bring on additional staff to help with day-to-day operations. This may include a cashier or a stock person.

But while many SBOs may be persuaded to hire seasonal or entry-level talent for these roles, don’t fall for this trap. Smart owners know the key to a winning business is a winning team. As your franchise grows, consider hiring team members who have management potential. Or bring on folks who are interested in learning more about the behind-the-scenes aspects of running a business.

With a reliable team at your disposal, you can slowly turn their attention from workday tasks to more integrated functions. Whether employee training or inventory management, growth abounds. Every aspect of running your business that you can offload is one step further from you needing to be everything to your business.

And remember, the key to passive income franchises is limiting the business owner’s involvement. This is what truly allows for a franchise to be a side hustle or a franchise for passive income.

As you solidify your foundation, you can even turn your attention to passive franchising additional locations.

Join the Right Franchise Network

However, the above is moot if you aren’t part of the right franchise network. After all, the best franchises for passive income are true partnerships. Your franchisor should be as invested in your franchise’s success as you are.

Smart SBOs know to search for passive income franchise business opportunities that are designed to scale, grow, and work. And Woof Gang Bakery is just that!

Our nationwide network of franchise locations is simple to launch and is perfect for community-driven business owners. Get access to industry-leading launch strategies. Launch a passive income franchise location with the Woof Gang Bakery family.

Learn more about our stress-free franchise process!