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Generating Passive Income with a Franchise Investment

by guest on July 14, 2013 · 6 comments

in Guest Posts

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The following is a guest post. 

If you are looking for ways to retire young, don’t get discouraged. If you make some smart choices with your finances and do a little preparation, you can position yourself to be retired while you’re still young enough to enjoy it. One way to achieve early retirement is to find good investments that will allow you to create compounding interest. This will make your money multiple quicker than just saving. Another option is to generate passive income by purchasing a franchise business that can continue to run even when you’re ready to step away.

franchise

Top Franchises

There are hundreds of choices when it comes to purchasing a franchise. Fortunately, Entrepreneur has listed the top picks of the year. Their picks run from hotel chains to automobile oil changing places, and they also share what startup costs average. These picks include:

  • Hampton hotels- $3.7+ million.
  • Subway restaurants- $85.2+ thousand.
  • 7-Eleven Inc.- $30.8+ thousand.
  • Anytime Fitness- $56.3+ thousand.
  • Servpro- $134.8+ thousand.
  • Miracle-Ear Inc.- $122.5+ thousand.
  • Papa Murphy’s- $216.43+ thousand.
  • The Maids- $93.55+ thousand.
  • Great Clips- $108.35+ thousand.
  • Jiffy Lube Int’l. Inc.- $196.5+ thousand.

By investing in one of these, or another top franchise you could build a solid business that will continue to give you income for as long as you want.

Popular with Consumers

Liberty Tax franchise business was started in 1972 and has built a solid reputation for itself as a professional tax service. Consumers have come to know the brand and trust Liberty preparers year after year with their taxes. It only costs about $56,000 to start up but it has unlimited earning potential. In the last 5 years it has consistently ranked on:

Franchise 500.

Fastest-Growing.

America’s Top Global.

There is training provided as well as ongoing support through:

  • Newsletters
  • Meetings
  • Toll-free phone lines
  • Grand Openings
  • Internet Security/safety procedures
  • Field operations/evaluations
  • Purchasing cooperatives
  • Lease negotiations

Fastest Growing

MSN Money has also done their homework to find the 7 fastest growing franchises. Their focus was on franchises that had a growth rate of about 70% or more since 2006. They interviewed experts and consultants and found franchises where,

“All have demonstrated solid growth despite the harsh business climate—and none of them require exorbitant startup fees.”

  1. Synergy HomeCare- $150,000 buy in and a 5% gross revenue.
  2. JumpBunch- $75,000 investment, and 8% gross revenue.
  3. FocalPoint Coaching- $1,800 a month royalty with a $100,000 investment.
  4. Signal 88 Security- $50,000+ investment, 4% typical roi.
  5. Expedia CruiseShipCenters- 9% growth, with a $250,000 buy in.
  6. MaidPro- $50,000 investment, with 5% average royalty.
  7. U.S. Lawns- Up to 4% gross revenue with a $50,000+ investment.

Most Affordable

Okay, so you realize that starting up your own business can be a great way to be financially independent and retire early, but you can’t afford to invest a lot of money up front. There are franchises out there that are very cost-friendly to start up. Yahoo Small Business reveals 5 money-making franchises that have a startup cost less than $35,000.

  1. Cruise Planner/American Express: less than $10,000 startup costs; home based.
  2. Jan-Pro Cleaning Systems: commercial cleaning services for only $1,000 investment.
  3. Jazzercise: fitness franchise that can be started for $3,000 and they have two different types of exercise franchises.
  4. Proforma: A business-to-business printing service franchise. Home based and started for about $20,000.
  5. Disaster Kleenup International: with a total investment of about $33,000.

Generating passive income with a small business can help your early retirement dream come true. Buying into a proven franchise with their support, help, and reputation gives you a huge leg up as a first time business owner. If you want to say good bye to your day job sooner rather than later, check out a franchise for an investment choice.

Photo credit: flickr by (vincent desjardins)

 

 

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{ 6 comments… read them below or add one }

Greg@Thriftgenuity July 15, 2013 at 5:56 am

Franchising always seems interesting to me, but I don’t see myself doing it. The amount of hours just seems like too much. Does Olive Garden offer franchises? It seems like I never pass one and the parking lot isn’t packed. Not sure why that is.

Reply

Gina July 15, 2013 at 10:55 am

Knew someone in the 90′s that invested in a TCBY. They are now out of business, I had overheard the wife of the owner say it was around $150,000 to franchise it.

I think anything to do with serving or helping the aging population is the way to go now.

Reply

mary w July 15, 2013 at 12:31 pm

Franchising may be fine for some people. However, its definitely not a PASSIVE income.

Reply

bill July 16, 2013 at 8:21 pm

Passive income?? Are you serious? It’s like having a job and a half

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Brad July 22, 2013 at 4:10 pm

This is really not good advice, and is mouthing the franchise salesmen’s lines.

I looked very, very carefully into several franchise opportunities and – along with my accountant’s advice – concluded I’d be buying a job, not passive income. I’d assume all of the risk, and the franchisor (in my financial models) would be getting most of the profit.

The only way this changed was to own five or six sites as an investor, then hire and (and still manage) people to run each unit.

Reply

retirebyforty July 22, 2013 at 9:51 pm

Thanks for your input. I thought franchise involve a ton of work too. I don’t really agree with our guest author.

Reply

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