Before we get into the best hands off franchises – consider this. There’s a fairly common analogy about nurturing your business like you would a plant. Just as the seeds you lay down need sunlight, water, and nutrients to grow deep roots – any business you invest in needs the same level of care and commitment. Without these acts of service, the roots of your business become overgrown, tangled, and unable to thrive.
With that being said, you can still find success in passive, hands off franchises – even though the name implies exactly that… being hands off. This is because owners have a few different ways to delegate their business responsibilities.
In this article, we’re digging into the basics of what makes the best hands off franchises, if they are typically good investments, who the right buyers are, and then identifying the specific franchises in our inventory that fall into this category.
Passive Franchising 101:
Before you decide if this is the business opportunity for you, we want to cover the basics of passive franchising and provide the full scope. So, let’s start at the beginning – what is it?
Passive, or hands off, franchises are a type of business model where the owner does not actively participate in the day-to-day operations of their business. Instead, they act as an investor to fund the franchise in exchange for a larger share of the profits generated by the franchisor’s efforts, or whoever’s in charge of operations.
When it comes to the different types of buyers in the marketplace, the people considering passive franchises are usually not searching for an opportunity that allows them to leave their current corporate job, or live a life of financial freedom while doing what they love – like we see in many franchisees. In other words, they aren’t looking for their dream job. Instead, they have an investor mindset and goals to continue growing their other streams of income.
Why People Want Passive
Passive franchises are an attractive option – if you are a professional looking to invest in a business, but don’t have the time, experience, or desire to actively run it.
Running and scaling a successful business can be difficult. However, it’s not the challenge of doing so that is the unappealing aspect of working in and on the franchise – It’s time. Time is a commodity, especially for investor types who want to keep growing and growing their investments. And this becomes even more clear when we look at the few reasons why people want passive.
The first reason is the ‘Golden Handcuffs’ theory. Buyers considering a passive franchise investment may not want to leave their well paying job in order to fully take care of their new business. Though franchising gives its owners the potential to make more money than their previous and possible corporate jobs, they don’t want to walk away from the guarantee of a big paycheck.
Another reason is these buyers are already multi-unit owners operating several businesses. They are serial entrepreneurs who want to keep investing, rather than slowing down to zero in on just one business opportunity.
And lastly, passive franchise buyers could just be investors managing funds of family and are used to passive models. In this case, the franchise really just is an investment – such as an investment property or stock might be. This is a way for people to diversify their wealth and assets.
The Three Typical Onramps
So, the fact that passive owners are essentially investors that fund the franchise for a cut rather than operating the business themselves, means that someone else does. But who?
There are three typical onramps that we often see owners taking to get their hands on the best hands off franchises:
- The Franchisor Runs the Business. One way to take care of a passive business is to have the franchisor, or franchise system, run it. In this scenario, they assume full responsibility for the day-to-day operations of the franchise. Who knows their brand best, if not the franchisor? Therefore, the owner really does not have much responsibility in the business at all apart from financials.
- They Manage the Manager. Another option is to hire a manager to run the business. The franchise owner acts as the supervisor, ensuring the manager is performing their duties effectively and that the business is running smoothly. This is ideal for individuals who have some management experience and want to maintain a level of control over the business, but do not want to be involved in the day-to-day.
- A Group of Investors Pool Their Money Together and Hire a Management Team. The third option is pooling money with a group of investors and paying for a quality management team to run the businesses. In this case, the owner and co-investors outsource even the managing and overseeing to a team, while still maintaining some say in the franchise. This option is mostly for when owners buy multiple franchises.
Now which option is best will depend on how much involvement the buyer wants in the business. There’s not a one size fits all style in overseeing a passive franchise, but the options are there.
Do Passive Franchises = Good Investments? The Answer’s Not That Simple.
Since we’ve mostly covered the basics, we’re going to get down to the truth of this question. But first, let’s recall how franchising, in general, can yield a good return on investment.
Buying a franchise, and one you actively work on, lets you skip over some of the early challenges of developing a business. These are things such as building a business plan, creating marketing material, researching competition, and hiring the right team. With a franchise, you can start your business with tried and true products already familiar to the market. All this means that you have more time and energy to focus on making the franchise a success – opposed to spending your time and money on trial and error on finding the best ways to operate.
But like anything, how successful or unsuccessful your franchise is depends on a number of factors. You can read more about that in our article, “What is the Failure Rate of a Franchise?”
Now back to passive franchises…
In our ‘like plant, like business’ analogy we stress the importance of caring for your franchise so it can thrive – and that caring requires presence. A successful investment takes a certain amount of investment back into it, usually in the form of time and effort. Because for many investor types, money is not the issue. They are free to spend it as they please. But when it comes to investing in the best hands off franchises, there are things that impact the potential of success – such as choosing the right manager, replacing that manager if they don’t work out, and providing guidance to that chosen team.
Success usually finds the people and businesses that provide the maximum level of effort. So, really the question could be “is there a franchise opportunity out there, passive or not, that is worth the effort it takes to get a good return on investment?”
Ideal Buyers for These Businesses
Have you ever heard of the Zorakle quiz? It’s a quick business assessment that gives you an advantage in the early stages of considering a franchise. After answering the questions, you’ll be assigned a buyer-personality type from four options – achiever, belonger, societal, and emulator.
The type of buyer considering a passive franchise tends to be a combination of Achiever and Belonger.
Some common motivations for Achiever-Belongers are:
- Family & Security First
- Being Dependable
- Maintaining Residual Income
- Efficiency & Saving Time
- Taking Investment Risks
- Staying Highly Driven
This type of buyer is often a paradox- two sides of the same coin. With that being said, Individuals who belong to the achiever-belonger type may find passive franchises appealing because they offer a balance between protecting their wealth and earning more income.
To find out your type and what kind of buyer you are – Take the assessment today.
What’s in our ‘Best Hands Off Franchises’ Inventory?
What comes to mind when you think of a passive franchise or business? One easy to understand example of a passive franchise includes vending machine opportunities. In this case, the franchise owner provides the initial investment and the franchisor handles the installation, maintenance, and management of the machines.
However, there are more options out there to consider. Here are four franchise recommendations that will have owners working anywhere between 1 to 15 hours a week on their business…
1. Furry Land
Furry Land Mobile Grooming is an all inclusive luxury Grooming van service that comes right to your door. It’s a fully passive model, as long as you buy the entire area’s units and commit to a 5-year manager.
Why buy Furry Land?
- The Pet Industry is one of the fastest-growing industries in America
- Results-focused Marketing Program– they use Digital and Grassroots marketing to help grow the business. Furry Land Vans are the best Marketing!
- Technology Programs– Furry Land utilizes a robust, multi-functional and easy to use CRM. Customers can book appointments online.
- Diverse Offerings– Furry Land has a wide variety of services and products.
- Operations– The Franchisor to Franchisee support, Call Center, Marketing Program and more give Furry Land the solid edge over the competition.
2. Grease Monkey Oil Changes & More
With over 40 years of franchising experience, Grease Monkey has a proven franchise system coupled with growth and the industry’s top support system. One of the few quick lube franchises with positive growth. In 2023, Grease Monkey was named to Entrepreneur’s Fastest-Growing Franchises list as well as included in the prestigious Franchise 500 ranking for the seventh consecutive year. Grease Monkey is also proud to have received the VetFran 5-Star rating demonstrating its extraordinary commitment to “provide access and opportunities in franchising to our Nation’s Veterans and their Spouses.”
This fully-passive opportunity allows for a franchise support team that runs all locations for the owner.
Why buy Grease Monkey Oil Changes & More?
- Competitive Startup Costs
- High Customer Service Rating
- Stellar Repeat Customer Percentage
- Recent System Growth
- Multi-unit Opportunities
- Independently Owned!
3. Naturals2Go
Naturals2Go is an equipment based, vending machine franchise – like we mentioned in our first example. The best owners are vigilant in executing the program, keeping their vending machines – that do the work for them clean and full, and building rapport with their vending sites to ensure the right mix for customer satisfaction and maximizing profits and margins. The machines in the Naturals2Go MVP Program are provided with the Telemetry system which will allow owners access anytime to see sales and inventory at the touch of a button. Owner operators will spend an average of 1 hour per week per machine servicing and running their business.
Why buy Naturals2Go?
- Cash business and consistent cash flow
- Unattended Retail – Let the machines do the work
- Simple to operate
- Great margins
- Be Your Own Boss
- Tax Benefits
- NO Employees
- Flexible Schedule
- Minimal Time
- Fast Ramp-Up
- Easily Scalable
- Recession Proof
- No Restrictions
- No Ongoing Fees
- Mostly Cash Business
- Making A Difference
- Simple and Ease Of Operation
- Consumable Products
- Everyone Can Be A Customer
- Multiple Streams Of Income
- Investments To Fit Any Budget
4. Storage Authority
Storage Authority is a prominent self-storage franchise available in the United States – an industry with $39 billion in annual revenue and growing.
This passive opportunity helps busy professionals make an extra 6 figure self-storage profit and a retirement nest egg, while they continue their career. The Storage Authority Franchise opportunity reduces risk, makes ownership easier, saves owner’s time and money, and most importantly helps them have a good life. It’s equipment based with no need for employees.
Why buy Storage Authority?
A Storage Authority franchise is right for anyone who wants to combine the best of three investment opportunities – make a solid real estate investment, own your own business, and operate a franchise…
- Professionals (such as doctors, lawyers, and accountants) or owners of an existing business – people who want to continue their career, while operating a second business opportunity
- Entrepreneurs — who are looking for an investment with a solid return both in income and in real estate appreciation, now and for years to come
- Real estate investors — who want higher returns than other sectors, including hotel and apartments, without the headaches of typical tenants
- Families — who want a strong income cash flow now, into retirement, and into future generations
- Couples — who want to work together in their own business
- Owners of an existing self-storage facility — who want to take their business to the next level by crushing the local competition and becoming the preeminent hometown self-storage location
Consider Calling it ‘Semi-Passive’
Referring to your franchise as “passive” comes with a few expectations – or lack thereof, when it comes to how much investment you’re actually making inside the business. Passive infers that you’re not assisting in the business at all – and that it’s just another stream of income potential. Typically franchises are larger investments that you can influence the outcome of. When you don’t put any insight into these investment you wont get strong results.
However, if you think of these business opportunities as semi-passive, then you can still get what you want by investing less time and energy into the business, but with the understanding that your involvement to some extent is key. If you’re a savvy investor then you know that managing your business well means getting the results you want.
The franchise you choose, no matter if its one of the best hands off franchises, needs your attention to be as successful as you envision it to be – like a plant that needs nurturing.
Let’s Find You the Best hands off Franchises
If you think passive franchising is the right option for you, we can get you started in the process. However, if you do find yourself interested in other franchise opportunities – we work with over 700 brands that we put through a vetting process before adding to our inventory.
Find the best franchise opportunity for you: https://www.franchiseba.com/find-franchises/