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Let’s be honest, not everybody is ready to startup a full-time business. Some people just want to start a business alongside their current job so that they can generate an extra income stream. This is popularly referred to as “side hustle”. What a lot of these people don’t know is that you can actually purchase a franchise that works as a good side job to make extra money.
Yet, finding just the right side hustle franchise for yourself can go from difficult to impossible. You will need to identify a passive business that can largely run without you, and you’ll need to follow a successful road map finding and buying one. We will examine today 7 steps you should take when buying a good franchise as a side hustle.
How To Build A Good Side Hustle Franchise In 7 Steps
Identifying a franchise that can be runned as a side job while you work at your full-time job is the first step to purchasing your side hustle franchise. There are some online platforms like Franchise Direct, Franchise.org, Franchising.com and Franchisecator that can help you with finding a good franchise business that will match your personal preference and specific needs.
Browsing through these online directories mentioned above, you should make sure to consider the following things before finally making your decision.
Less time requirement: Pick a franchise that requires less time and effort, is not too risky to commit into the hands of your employees, can operate well with limited supervision and can generally be managed part-time.
Income potential: When starting a franchise as a side-hustle business it’s super important to avoid unrealistic circumstances by setting up realistic income expectation; you obviously won’t make billions of dollar running a side hustle, but you can find a franchise with potential income equal to what you’d expect to earn working on it as a side business.
Personal interest: Finding a franchise that interests you will make your side hustle business more appealing and makes engagement with its operations very easy while still maintaining focus on your main jobs.
Some common types of passive income franchises include but not limited to the following:
Food carts: An example of this type of business is taco or hot dog stand. This business is very easy to manage as a side business as long as you hire cook with skills and trusted cashiers.
Vending Franchises: This franchise is by far one of the easiest businesses to run or a side job because you don’t need to be there for the business to be runned successfully. You’ll only need to hire a few people to take the inventory, delivery and accounting from time to time.
Health and Fitness: Owning a gym or fitness center is another franchise which can fetch you income continually for as low as it is runned well. You don’t really need to be there but you have to hire the service of competent personnel to manage this business for you.
2. Do Your Market Research
Once you identify a franchise that can pass as a side job, the next step to be done is conduct your market research. Make sure that you choose a franchise that you can actually run passively. For example, one can run a vending franchise on the side but for a larger operation like a gym center, you’ll need to find out when doing your market research.
Business Operations: The business operations of your selected side hustle franchise need to be flexible, it should never be rigid or this may spell D-O-O-M. You need to select a franchise with operations that are easily managed by someone else.
Cost of the franchise: Since this will only be runned as a side business, it is important that you don’t end up spending more in startup cost than you bargained for. You will also need to consider how long it will take for you to get your ROI (Return on investment); taking into your mind the fact that you cannot manage the business full time. This information is usually available in the franchise disclosure document.
3. Submit Franchise Application
People who grant a franchise are generally interested in knowing more about you as a potential franchise, even if what you are looking for is a side business. The first franchise process involves a screening process where franchisors determine your qualifications, and height of interest in the business. At this stage, you should make it clear that you plan to run the franchise in question as a good side-job to make extra money and not as a full time business.
Requirements for franchise application vary from one company to another. Some franchises demand that you submit a basic application and then call to meet with you for a formal presentation and interview. While some other franchisors will ask you to submit a complete application, including financials and business plan.
4. Attend Franchise Discovery Day
Franchise discovery day presents you with an opportunity to meet with the franchisor to educate yourself about the company in an informal setting. Discovery days are mostly held in corporate headquarters of the company and during this event, the prospective franchisee learns a lot about how the business operates, it’s product and services, the training and support it provides to the franchisees, and the total financial investment needed.
This is a window of opportunity to make sure that the franchise doesn’t demand too much of your attention and time, and learn if you can run it as a side business while keeping your full-time job. You have to ensure the business can operate and generate income even if you cannot always be physically there to maintain the business.
5. Pay the Franchise Fee
Franchises usually charge a fee known as “Franchise Fee” for starting a new franchise. You can think of it as a startup fee. For example, KFC charges their franchises as much as $1.5 million or more to start a new franchise. For McDonalds, the fee can cost you $750,000. Nevertheless, for a side hustle franchise, the franchise cost will be a lot lesser.
Ultimately, you can probably find a franchise that cost between 10-$35k to start. This means that there is abundance of financing options available for you to select from. For example, a short term charge of credit sources would cover the needed startup costs. Alternatively, you can use a Rollover for Business Startups (ROB) if you have a retirement account, and cover the franchise cost with retirement savings, tax-free and penalty. There is no need to go into debt.
6. Hire Competitive Employees
Hiring competent employees is another important and perhaps the most difficult step in this process of getting a good side job to make extra money. Since you probably won’t be always be available to supervise and manage your employees, you need to make sure you hire the right set of people who possess the right skills and can be trusted to run your franchise when/if you are not there.
Decide the positions that you need people to fill and determine skills needed for the job. You can learn this during the training. The franchise will show you the necessary qualifications you need and the best time to hire. You can then proceed to advertise your job vacation through different online HR platforms like Allretailjobs.com, indeed.com and Dice.com. Ensure you meet and interview personally your candidates to assess their qualifications.
For example, if you choose to start a health and fitness franchise, you need to make sure that the people you hire can motivate and help customers get in shape even with less supervision.
7. Open the Business
Now that step 1-6 has been settled, the last step is to get your franchise ready for business. At first, the business may need you to give more attention and spend more time with your side-business franchise while most or all of your employees are still getting themselves familiar with the operations. During this time, you can study your employees to confirm whether the people you hired are really competent to run the business on their own or not.
Although this side-job is only part-time, you still have to set a few hours a week to monitor its progress. The franchise is still yours, after all. This means you must provide it with all necessary attention and needful efforts required to become successful. Do not delay to send your employees to ongoing training when necessary, meet with them regularly and monitor your passive cash flow consistently.
When you decide to be your own boss but are not ready to leave your full-time job and let go of your fixed monthly salary, starting a side-job to make extra money is a good option. All you require to start a side-hustle franchise is to find the right franchise that can be run on the side and hire the right people who you can entrust your business into their hands.