In today’s workforce, many professionals are exploring the idea of owning a business while maintaining their W2 employment. Balancing a stable job with a franchise can be an intelligent way to scale wealth, take advantage of tax benefits, and gradually transition to full-time entrepreneurship.
Why Maintain Your W2 Job?
Keeping your W2 job provides stability, consistency, collaboration, experience, and education. As you build skills in your job, it’s natural to think, “What could I do on my own?” The independence of business ownership is a natural aspiration because we all seek freedom. However, there’s limited education on the tax advantages of owning a business, which can significantly impact your wealth-building strategy.
Tax Advantages of Business Ownership
Understanding the tax code can reveal substantial benefits:
- Higher 401(k) Contributions: Business owners can contribute more to their retirement accounts.
- Write-Off Deductions: Expenses related to your business can be deducted, reducing taxable income.
- Depreciation Write-Offs: The government allows accelerated depreciation of equipment, enabling you to write off more than the actual wear and tear.
- Pre-Tax Asset Purchases: Buying assets pre-tax allows for faster growth, keeping more money within the owner’s asset mix.
Choosing the Right Franchise
Key Considerations
- Employees as Franchisees: Does the franchise system have employees who are also franchisees? This indicates that the model is supportive and feasible for those maintaining their full-time jobs.
- Passive/Semi-Passive Ownership: Look for franchises that allow for passive or semi-passive ownership from the start. For example, N Zone Sports supports semi-passive ownership.
- Validation: Ensure the franchise validates well as a passive ownership model. Speak with current franchisees who manage their business while maintaining other employment to confirm the feasibility and support provided by the franchise.
Strategic Ownership
When selecting a franchise, consider how it can enhance your life and leverage tax benefits:
- Travel: If you enjoy visiting certain places, owning a franchise headquartered there could allow you to write off business-related travel expenses.
- Passions: Align your business with your interests. For example, if you love animals, a pet-related franchise could allow you to integrate a therapy dog into your services, with related expenses becoming tax-deductible.
- Asset Acquisition: Franchises that support asset purchases, like vehicles or real estate, can help you expand your wealth. For instance, certain franchises allow write-offs for high-value items like vehicles meeting specific criteria for business use.
Top Franchise Models for W2 Holders
When considering a franchise to own while keeping your W2 job, it’s crucial to select a model that aligns with the tax advantages we mention above. The right franchise can enhance your financial stability, provide additional income streams, and offer significant tax benefits. Here’s how these 11 franchise brands stand on these factors:
1. N Zone Sports
- Tax Write-Offs: Yes, visiting sports events, renting public event space, sports supplies
- Example of Asset Purchases: Yes, you can buy land for activities and rent it out. You can also have a wrapped vehicle
- Build Out and Launch Support: No build out needed, confirmed corporate launch support
- Operational Visibility: No CRM system needed; the model is simple and easily managed
- Validation: Extremely well-validated
- Corporate Staff Ownership: Unknown
2. One Hour Heating & Air
- Tax Write-Offs: Yes, eco-friendly systems, antique clocks, energy conference travel
- Example of Asset Purchases: Warehouse facilities, clocks, antiques, fleet of vehicles
- Build Out and Launch Support: Yes, well-developed support
- Operational Visibility: Industry-leading software, well-developed
- Validation: Good
- Corporate Staff Ownership: Unknown
3. Set the Stage
- Tax Write-Offs: Yes, decor, photography equipment, Airbnb visits
- Example of Asset Purchases: Buy Airbnbs, furniture
- Build Out and Launch Support: Yes, well-developed
- Operational Visibility: Yes
- Validation: Extremely well-validated
- Corporate Staff Ownership: Unknown
4. Hudson Valley Swim
- Tax Write-Offs: Yes, visiting pools, floating devices, pool cleaning systems
- Example of Asset Purchases: Land for pools, wrapped vehicles
- Build Out and Launch Support: Simple build-out and launch support
- Operational Visibility: Simple model, not heavily tech-based
- Validation: Yes
- Corporate Staff Ownership: Yes
5. Pelican’s SnoBalls
- Tax Write-Offs: Yes, event travel, marketing expenses, winter destination visits
- Example of Asset Purchases: Buildings, vehicles, equipment, food trucks
- Build Out and Launch Support: Well-developed
- Operational Visibility: Well-developed
- Validation: Extremely well-validated
- Corporate Staff Ownership: Yes
6. Bodenvy
- Tax Write-Offs: Yes, fitness equipment, gym memberships, beauty products, marketing photography
- Example of Asset Purchases: warehouse, wrapped vehicles
- Build Out and Launch Support: Yes
- Operational Visibility: Yes
- Validation: Yes.
- Corporate Staff Ownership: Yes.
7. Scenthound
- Tax Write-Offs: Yes, pet care, travel to pet events, marketing photos
- Example of Asset Purchases: Buy a mascot dog, building, vehicles
- Build Out and Launch Support: Robust support
- Operational Visibility: Yes
- Validation: Strong 100% retention
- Corporate Staff Ownership: Yes
8. Furry Land
- Tax Write-Offs: Yes, pet care, travel to pet events, marketing photos
- Example of Asset Purchases: Buy a mascot dog, building, vehicles
- Build Out and Launch Support: Yes
- Operational Visibility: Yes
- Validation: Strong 100% retention
- Corporate Staff Ownership: Yes, managing as fully passive
9. Grease Monkey
- Tax Write-Offs: Yes, car maintenance, car shows, auctions
- Example of Asset Purchases: Antique cars, land for parking, collectables
- Build Out and Launch Support: Yes, high support
- Operational Visibility: Yes
- Validation: 98.3% retention
- Corporate Staff Ownership: Yes
10. HomeSmiles
- Tax Write-Offs: Yes, anything for home properties, cleaning supplies, visiting home shows
- Example of Asset Purchases: Insider knowledge on property deals
- Build Out and Launch Support: Yes
- Operational Visibility: Yes
- Validation: Yes
- Corporate Staff Ownership: Yes
11. Bishops
- Tax Write-Offs: Yes, beauty products, photoshoots, PR parties, live art events
- Example of Asset Purchases: Location, cars, art for marketing
- Build Out and Launch Support: Yes
- Operational Visibility: Yes
- Validation: Good
- Corporate Staff Ownership: Unknown
If you’re interested in learning more about these franchise models and how they can align with your financial and lifestyle goals, consider speaking with an FBA Franchise Broker. They can provide detailed insights, help you navigate the various options, and offer personalized advice to ensure you choose the best franchise to complement your W2 job and maximize your tax benefits.
Strategic Considerations
When choosing a franchise, think about your desired lifestyle and how the business can integrate with it. Ensure the franchise offers strong launch support, operational visibility, and validation from other semi-passive owners. By strategically selecting a franchise that aligns with your interests and leverages tax benefits, you can enjoy the stability of your W2 job while building a path to financial independence.
Grow Beyond Your W2 Today
Owning a franchise while maintaining your W2 job can be a powerful way to achieve financial freedom and personal fulfillment. By carefully selecting a franchise that supports semi-passive ownership and aligns with your interests, you can enjoy the benefits of both employment and business ownership.
