Expanding your revenue streams can accelerate your financial growth, and an excellent way to approach this is by creating a passive income source. Simply put, passive income involves earning funds without contributing as much or any work, freeing up time and attention for other pursuits. This diversification from mixing passive income opportunities with your existing income sources can be a powerful strategy to grow your financial security.

But how can franchising allow you to pursue a passive income? Some may think of franchising as a hands-on role that requires you to engage with the business daily, but that’s not always the case. Franchisees who pursue this venture passively have a team of employees, often including a store manager, to run operations. This team would take over many of the franchisee’s responsibilities, making a passive income stream feasible. However, there are some steps to take before establishing this system.

As you consider the prospect of pursuing franchising passively, we’ve compiled some factors to keep in mind.


Semi-absentee or absentee ownership models: Although we often think of franchisees as business owners who go to work every day and directly contribute to their location’s success, that isn’t the only type of franchise model. When searching for franchising opportunities, you may come across various ownership models, including semi-absentee and absentee types that involve little to no involvement in daily operations. Not every franchise system offers these ownership models, however, which potentially limits your available pool of options depending on the industry you want to pursue.

A standardized business model: Franchisees follow a business model established by the franchisor that has proven successful and is replicated throughout each location within the network. Consistency is essential to a customer’s experience at any location they visit, which can help franchisees who desire a passive role. Since daily operations and procedures follow an established process, fewer decision-making tasks are required of the franchisee, and operations can be completed much more efficiently. In other words, there is less setup work required, which helps the franchisee achieve a more passive approach.

It’s like the process of building a house. The blueprint is already made, and the builders will follow it exactly. The process is streamlined, and there is less room for error. The same can be applied here: The franchisor is the creator of the blueprint, and the builders are the franchisee’s employees, who ensure daily operations run smoothly.

Partner with a co-owner: If you are seeking a passive income source, partnering with someone can be a great way to balance the responsibilities and, in some cases, allow you to contribute less day-to-day involvement if your partner is willing to take on a more active role.

Invest in a supportive franchise system: Pursuing franchising passively is possible when investing in a reputable brand that offers comprehensive support. Extensive franchisor training is essential when hiring your team to run the business on your behalf. The more in-depth the training, the more equipped they will be to handle the everyday operations, which can offer you greater peace of mind and less responsibility. Seeking opportunities that clearly outline the scope of support is key for those pursuing passive franchising.

Look for multi-unit opportunities: Not only can franchising be a passive income source, but it can also be a greater opportunity to diversify your portfolio. For example, if you are interested in tapping into multiple industries at once, a semi-absentee or absentee approach allows this.


Profit can take time: When you think of passive income, you might consider examples like investing in stocks, becoming a landlord, or other investments that can generate a profit relatively quickly. This will not necessarily be the case when you invest in a franchise.

Although one of the major benefits of franchising is that much of the heavy lifting is done by the franchisor, such as establishing the products/services and building brand recognition, the business still requires attention and resources to be successful. As someone pursuing franchising passively, it can take time to assemble a team and reach a consistent level of customers to generate a profit. Therefore, franchising is not a “get rich quick” investment.

That is not to say that the payoff won’t be worth it. What could be considered a “slow burn” type of investment can become profitable as the franchise continues to grow.

It still requires attention: There are several steps to take before opening the doors to your franchise location(s), which can require some time to complete. For instance, you must meet the requirements the franchisor has outlined; receive, review, and sign a Franchise Disclosure Document; potentially attend a franchise discovery day; and sign the Franchise Agreement. Usually, the initial process can only be completed by you, not your team.

While operating your franchise passively once it’s up and running is feasible, it’s important to realize that there’s work to be done prior to opening. You should carve out time for these responsibilities, especially if you’re already managing other commitments.


At Dogtopia, we offer various ownership models, including options that are suitable for a passive role. Check our ideal franchisee page for details and what our next steps are for an overview of this process.