7 Best Passive Income Franchises That Pay for Years to Come

P3 Cost Analysts / Franchising / August 20, 2022

If you get tired of working yourself to the bone at a nine-to-five job every day, I can promise you — you’re not alone. But millions of Americans continue the vicious cycle. If you’re here, reading this article, then you’ve probably decided to make a change and take charge of your life.

One way to gain financial freedom and have more time to yourself is by buying a franchise suited for passive income. While some franchises require the owner to be on-site every day and supervise the business closely, others allow for less involvement in the day-to-day activities. But is owning a franchise passive income? Keep reading to find out.

How to Define Passive Income

First, we need to define what we mean by passive income. For this article, we’re referring to passive income as money you’re earning without a lot of active work. For example, a business owner can put in a lot of work upfront, and then once things are up and running, they can step back and put in minimal effort along the way to keep the income coming.

This doesn’t mean that there’s no work involved. Instead, it means by putting in the hard work now, you’ll eventually be able to step back and let others run your business for you. At that point, you’ll have passive income with minimal oversight.

Can a Franchise Be Passive Income?

Using the definition above, yes, a franchise can definitely be passive income! In fact, many franchises are set up with the goal of passive income in mind. That’s why some franchisees end up owning multiple locations of the same franchise, with a separate staff and minimal oversight to run each one.

While it does take a while to get a franchise to the point where it becomes passive income, it can be much faster than starting your own company. When you buy a franchise, it comes with a pre-made business structure, brand recognition, and historical proof that it can be successful. Starting a franchise is basically like getting a head start in the race.

That being said, you do have quite a bit of work upfront. For starters, there’s often a high upfront cost depending on what type of franchise you go for. And even with a head start, it will take some time before you can step back. You’ll need to get the operation off the ground, find a trustworthy manager, and fill out the rest of the staff. Even at that point, you’ll want to continue overseeing the business to ensure things keep running smoothly.

What Makes a Good Passive Income Franchise?

If you decide that a franchise is something you’re interested in, you’ll want to do your research. Not every option is the best franchise for passive income. Specific industries require the owner to be present nearly every day. For example, B2B franchises or those that require special licenses or technical expertise often fare better with the owner-operator model.

If you’re looking for the best passive franchises, look for the following criteria:

  • Solid cash flow: One of the key components in finding passive income franchise business opportunities is whether or not there’s high cash flow. If you don’t want to be present to run the day-to-day operations, you’ll have to hire a manager and a full-time staff to run things for you.
  • High demand, recession resistant: In order to sit back and let your passive income franchise make you money, you need to invest in a business that has a high demand. Research success rates of other franchisees and consider what kind of brand recognition the franchise has. Bonus points if it’s in a recession-proof industry.
  • No special skills needed: Franchises that require special licensing or highly skilled workers are not the best passive franchises. These requirements will make it harder for you to find a manager and require you to be present more often than you would like.
  • Scalability: Once your first franchise is up and running, investing in more locations is the best way to get more hands-off. Once multiple locations run smoothly, you’ll be able to step back even further, potentially hiring a district or regional manager.
  • Absentee or semi-absentee ownership: While not a requirement for passive income, franchises that allow absentee or semi-absentee ownership typically lend themselves well to a passive income lifestyle. A true absentee franchise is hard to come by, but there are hundreds of semi-absentee franchises that have the potential to function as passive franchises. In an absentee franchise, you wouldn’t work a single hour in the business, whereas semi-absentee owners will typically spend 5 to 20 hours a week (or even less, with time). Not all franchisors allow this type of ownership, so read the franchise agreement to ensure there are no rules against it.

The Best Franchises for Passive Income

1. P3 Cost Analysts: Best for Business Consulting

  • Minimum cash required: $59,500
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Available through a third party

Not all passive income franchises have to be semi-absentee, although these often do make good passive income companies. However, if you’re willing to put in a lot of effort upfront, you can set yourself up with residual income that flows for years and eventually will require little to no work.

A P3 Cost Analysts franchise offers a great opportunity for passive income. It won’t be easy, though. You still have to put in the work to build your book of business up. But as you grow your book of business, your residual income stream will continue to grow and make for an excellent passive income business.

2. 9 Round Fitness: Best for Fitness Instruction

  • Minimum cash required: $113,300
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Available through a third party

It doesn’t matter if fitness is your passion or not. Fitness franchises are proven to make money. 9 Round is a kickboxing franchise that can be one of the best franchises for passive income. They offer a semi-absentee ownership model that encourages a close partnership between you and the manager. 9 Round expects that once the gym is up and running, you’ll only have to work 10-15 hours weekly.

The business model is fully turn-key, and with start-up costs lower than other gym franchises, you can have your gym open for business before you know it.

3. 711: Best for Convenience Stores

  • Minimum cash required: $45,000
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Yes

As the world’s largest convenience store, 711 definitely has brand recognition on lock. From rural US to bustling Bangkok, you can find 711s all over the world. You can start with one store, utilizing their training and support to get the business up and running.

However, they also have a multi-unit business model that makes it easier to scale your passive franchises. 711 is proud to say that 33 percent of its franchisees have more than one store. So the quicker you scale to multiple locations, the sooner you can generate more passive income.

4. DetailXPerts: Best for Car Detailing

  • Minimum cash required: $103,500
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Available through a third party

A car wash is often considered the best franchise for passive income. DetailXPerts, in particular, is designed to give you the ultimate flexibility to run the business from home on whatever schedule works best for you.

In fact, flexibility is their motto for all aspects of their franchise. They offer the option of standalone shops, mobile-only, or a combination of the two. With 128 locations inside and out of the country, they’ve mastered the car cleaning process and get the job done with very little water consumption.

5. Wave Max: Best for Laundry Services

  • Minimum cash required: $234,455
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Yes

Wave Max is trying to change the name of the game of dingy laundromats. They offer customers a clean and well-maintained area with high-efficiency washers and dryers, full-time attendants, wifi, and wash, dry, and fold services. And there’s a national rollout in progress, so now is a perfect time to get in.

Their absentee business model makes this laundromat a great candidate for a passive income franchise. You’re looking at working as little as four hours per week and only being responsible for a small staff of three to four people.

6. Two Maids & a Mop: Best for Home Services

  • Minimum cash required: $83,140
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Yes

Two Maids & a Mop offers a semi-absentee ownership model allowing you to operate as a passive franchise. They even assist with managerial duties during the opening process until you hire a full-time office manager. Once this cleaning business is up and running, you should expect to work 10-30 hours per week.

The business’s immediate scheduling, digital marketing, and pay-for-performance contribute to its glowing reputation in the industry. Plus, you’ll never have to even think about working nights or weekends with a residential cleaning business.

7. Camp Bow Wow: Best for Pet Services

  • Minimum cash required: $928,000
  • Work from home: Yes
  • Training provided: Yes
  • Financing assistance: Available through a third party

This one’s for the dog lovers out there — and yes, that’s a prerequisite. Doggy daycares are great passive income franchise business opportunities because pet care services are considered solid recession-proof businesses.

A majority of the owners are absentee or semi-absentee, so you know that the franchise is set up to become passive income with time. Plus, Camp Bow Wow has a proven business model that offers daycare, boarding, training, and grooming and over 200 successful locations, so a lot of the groundwork has been done for you.

Start a Passive Income Franchise Today

There are many reasons people look for a way to make passive income. Whether you’re retiring, want to spend more time with your kids, or pick up a hobby, it usually comes down to having more freedom.

The easiest way to get set up with a passive income franchise is by purchasing a semi-absentee franchise. However, if you’re willing to put in a bit more work at the front, you can achieve even larger income streams in the long run. For example, a cost reduction consulting franchise with P3 Cost Analysts can offer quite a substantial passive income once you’ve built up your book of business.

Of course, not every type of franchise out there can result in passive income, so be sure to do your research and invest in a business that will allow you to be hands-off once things are rolling.

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