Is Franchising a Good Side Hustle? It Depends on These Things

In a professional landscape that places increasing value on gig work and side hustles, it’s important to make sure that we are evaluating new ventures carefully before diving in. After all, there are only so many hours in a day, and entrepreneurs in particular must ensure their time is allocated efficiently.

From a business model perspective, franchising offers a middle ground between the stability of a corporate job and the uncertainty of a true startup business. Franchises provide a blueprint to new franchisees that detail proof of concept and profitability. It’s no wonder many professionals looking to transition out of a corporate role and into business ownership consider franchising as a viable option.

As a franchise consultant, I’ve observed first-hand the value a corporate background can have when applied to franchise ownership. These aspiring entrepreneurs are hard-working, motivated, decisive and have strong leadership skills (among many other traits). The trick is knowing when to make the jump.

I am often asked whether franchising is something that can be done on the side while continuing to work at a full-time corporate position. The answer? Ultimately, it depends on your circumstances.

Related: These 7 Side Hustle Franchise Types Can Earn You Full-Time Cash

Why franchising might not be a good side hustle

1. Your level of flexibility

The largest issue that places franchising at odds with maintaining a traditional 9 to 5 is the lack of flexibility. There’s no way around it — owning a business requires attention during the business day. Even if you have a manager running it for you, oversight and the ability to be present at a moment’s notice are vital. This means time and focus that is entirely separate from your day job. Only you truly know how time is spent daily in your current position.

Imagine a typical workday. You’re in the middle of a task and you get a notification that a pipe has burst in your franchise storefront. Are you able to get up immediately and attend to this urgent matter? If not, you may need to reconsider whether you truly have the flexibility to maintain both a franchise and your corporate job.

2. How much upfront capital investment you can make

Typically, side hustles may not require upfront capital (or may require minimal start-up costs). However, they do often require a great deal of time and work upfront (hence side “hustle”) before they create a semi-passive income. Consider internet businesses or affiliate websites that are entirely conducted online and do not require real estate, overhead costs or additional employees. This is not realistic for franchise ownership.

Because being awarded a franchise means that you have access to business materials, marketing plans, hiring assistance and many other resources that bypass common headaches and wasted time and money on the traditional startup path, you have a leg up from day one. And while this is a major selling point for many who are motivated to own a business, it does add to the initial investment cost.

There are many different franchise concepts and, subsequently, vastly different investment costs. However, as a rule of thumb, even the minimum capital investment for a franchise is going to be approaching $100,000 (the franchise fee alone is often between $50,000 to $60,000).

*Note: According to the U.S. Small Business Administration website, the franchise fee is described as “the cost of entry. Paying the upfront franchise fee unlocks the door to the franchisors’ proprietary business systems and more. You get the complete setup. The franchise fee is literally a license to own and operate the franchise business.”

3. How much oversight you can provide

Working hand-in-hand with flexibility, it’s important to understand that franchising — or owning any business — is never truly absentee. Even if you hire a manager to run day-to-day operations, you are responsible for oversight. Furthermore, you must be able to step in at a moment’s notice if your general manager leaves or is unable to perform their role.

Since most franchises are local and regional brands that fall under the category of everyday essential services, they require local representatives and will therefore have employees. Due to the nature of managing employees, it’s difficult to maneuver employee management into a side hustle.

Related: The Pros and Cons of Franchising Your Business

When can franchising work as a side hustle?

At the end of the day, much of this question comes down to the control you have over your daily schedule. If your current job allows for flexibility in the middle of a workday (possibly if you work in real estate, sales or perform remote work and have flexible deadlines), then franchising can often work as a side hustle.

Additionally, if you have a large amount of financial capital to work with, then you will be able to hire employees and managers who can offset the workload. Enough capital can solve almost any time-related problem. However, as noted above, this is not a catch-all solution. You will likely have to invest more time to get the franchise up and rolling. Over time, developing a hierarchy of employees and managers can minimize your time commitment.

We all know that when making any major career change, it’s important to perform due diligence and ensure that you are making the most well-informed decision possible. If you are considering franchise ownership as a side hustle, I encourage you to carefully consider your lifestyle and decide if you can realistically operate a franchise on the side, or whether you fall into the larger category of owners who must commit more time to this endeavor.