Many people buy their first franchise after getting fed up with their jobs. They get tired of working for someone else, and they decide that they are willing to take the risk of quitting in order to try something new. But this approach isn’t right for everyone. If you aren’t ready to quit your job—at least not yet—you might be thinking about starting a franchise as a side hustle. Here, Chicago franchise attorney Jeffrey M. Goldstein explains what you need to know.
Starting a Franchise as a Side Hustle
When it comes to starting a side hustle, you have lots of options. For example, driving for rideshare and delivery companies is becoming increasingly popular, as it offers an opportunity to make extra money on your own schedule.
But, for many people, this simply doesn’t interest them. Instead of spending hours a day sitting in traffic, they want to use their time to build a business that generates meaningful income—and that they may even be able to sell in the future. If you fall into this latter category, here are some key considerations for buying a franchise as a side hustle while maintaining your job in Chicago:
You Will Need to Choose the Right Type of Franchise
There are lots of different types of franchises. When starting a franchise as a side hustle, it will be important to choose a franchise concept that is suited to your specific goals and needs.
For example, opening a business like a restaurant or gym may be out of the question. These require not only a substantial financial investment but also a full-time focus on managing and growing the business. Instead, a home-based franchise or mobile franchise could be a good choice. Not only do these franchises typically require smaller initial investments, but they also provide the flexibility required to manage the business while still going to your “normal” job.
You Will Need to Be Prepared to Work A Lot
Regardless of the type of franchise you choose, you will need to be prepared to work a lot. Not only will you need to keep up with your “normal” job duties, but you will also need to put in the time and effort necessary to start building a client or customer base. Then, you will need to actually serve your clients or customers. While starting a franchise as a side hustle is certainly possible, it requires a significant amount of dedication. Late nights and working weekends will become the norm—and you will need to make sure you are comfortable with this over the long term.
Buying a Franchise is a Substantial Investment
No matter what franchise you choose, getting started will require a substantial investment. Whether you cover this investment using your savings or by getting a loan is up to you. There are several loan options available, including government-backed SBA loans for first-time franchisees. Before you commit to buying a franchise as a side hustle in Chicago, you will need to make sure you are as confident as you can be that you will be able to recoup your initial investment during the term of your franchise agreement.
There Are Major Differences Between Buying a Franchise and Starting an Independent Business
While many people think that buying a franchise is the “quick and easy” way to independent business ownership, this is not the case. As a franchisee, you will own your own business. But, you will be subject to the franchisor’s rules and requirements, and you will need to pay royalties and advertising fund contributions on a monthly basis. Many franchisors that offer relatively low-cost franchises impose mandatory monthly minimums as a way to keep their franchisees engaged. If you don’t meet all of your franchisor’s requirements (both financial and non-financial), you could lose your franchise.
You Will Be Responsible for Your Own Success
Ultimately, as a franchisee, you will be responsible for your own success. It will be up to you to recoup your initial investment, pay your royalties and advertising fund contributions, and find a way to make your franchise financially worthwhile. Owning a franchise as a side hustle is possible—lots of people do it. But, before you move forward, it is critical to make sure this is the right choice for you.
5 Steps to Start Your Franchise Journey
Think starting a franchise as a side hustle is the right choice for you? If so, here are five steps you will need to take to start your franchise journey:
- Think About What Interests You – If you will be managing your franchise before and after work each day, it will be important to have a business that interests you. There are franchises in almost every industry, and you should take some time to think about how you want to spend your time.
- Do Your Research – Once you narrow down your options, it is time to do your research. You should compare and contrast several franchise opportunities in order to create your shortlist of candidates.
- Consider Your Financing Options – How will you finance your franchise? Before you start investing time in due diligence, you will want to have a clear picture of how you will fund your franchise side hustle.
- Do Your Due Diligence – Once you decide that you are ready to move forward, it is time to do your due diligence on the franchise opportunities that are on your shortlist.
- Talk to a Chicago Franchise Attorney – Before you buy a franchise, it is critical that you have the franchise opportunity reviewed by an experienced Chicago franchise attorney. We offer flat-fee franchise business review programs, and you can get started with a free consultation.
Schedule a Free Consultation with Chicago Franchise Attorney Jeffrey M. Goldstein
Are you thinking about buying a franchise? If so, we invite you to contact us for a free, no-obligation consultation. To schedule an appointment with Chicago franchise attorney Jeffrey M. Goldstein, please call 202-293-3947 or tell us how we can reach you online today.
