Start a franchise vs buying a 4plex

8 Replies

I have some funds saved up and ready to invest but confused about which path to take this time. Real estate investing has been great and once set up it is mostly passive and I am able to work my day job. However, I would like to try something new this time and invest in a franchise. I know it would involve more time that the former but it would be something that I always wanted to do. I plan to keep my day job but work is flexible so I can be involved in the franchise as needed. Have you been on the same boat and went the franchise way? If yes, do you regret your decision?

@Imthiaz Ahmed I would look at the ROI numbers for the franchise opportunity and compare them to some of the real estate deals you've been looking at and make a decision strictly based on the numbers. Weight those numbers against time invested and based on your long term goals. Try to leave the emotions out of it.

I have looked into franchise as well, but I have a long term day job wherein I can take early retirement in 4 years. I have never heard of a "part time" franchise owner. If anything, I would think you'd find yourself working 100 hour work weeks to start. 

Hi @Imthiaz Ahmed,

It depends on your goals. If you'd like to roll up some businesses and have that become your income, a franchise won't allow you to do that. You can roll up properties the same you roll up businesses, but the franchise model is very limiting.

Consider going after some larger properties...these are really businesses whose customers happen to be tenants.

I like @Daniel Weber and @Anthony Wick 's advice but I will add a little bit to it. 

Look at your ROI but also look at your time commitment. Also, there are A LOT of tax benefits in real estate and I'm not sure if that's the same with owning/operating a franchise. That may be something to consider as well.

Originally posted by @Anthony Wick :

I have looked into franchise as well, but I have a long term day job wherein I can take early retirement in 4 years. I have never heard of a "part time" franchise owner. If anything, I would think you'd find yourself working 100 hour work weeks to start. 

 I'm with Anthony here. No way you can run a Franchise part-time.  This will need to be your main job and your new life.  Part-time owner = failed business.   Franchise business just means you have a proven company and system to use but doesn't guarantee you success.  

So you need to decide if you are willing to give up your current job and all go all in.  

@Imthiaz Ahmed We had a franchise business that we sold and invested in real estate and I started sleeping better! Though the business was running itself as we have a full time Director, I always wondered what if the Director leaves.. 

A successful Franchise business would probably give you better cash flow than real estate in the SJ market. 

I wanted to try something different and I am glad I got the experience. You have to weigh your pros and cons

Thanks for all your inputs.

@Daniel WeberThe ROI numbers are definitely better with the franchise however time invested would be a lot more than real estate.

@Anthony Wick   and @Frank Wong I didn't know it would need that much time to start and set up a franchise. Clearly I am not ready to do this as I don't want to give up my day job yet.

@Pooja C. Thats very helpful to know. May I ask what franchise you owned?