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.
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.
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.
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:
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.
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?”
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?”
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:
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 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…
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.
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.
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.
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.
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…
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.
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.
Speak to our specialists about your options about our best hands off franchises by visiting our website at www.franchiseba.com or calling in today (866) 395-4697.
