What is a Passive Franchise Owner – Passive Franchise ownership is the stage in business when, as the owner, you are no longer involved in the day-to-day operations unless you choose to be. The Franchisor has successfully developed systems that allow your people to run your business. When you reach operational irrelevance, you will have time to concentrate on the strategic side of your business. For many business owners, this is where the fun and profits happen.
Here are some reasons to consider Passive Franchise Ownership.
1. Your business will run smoothly.
The passive owner will have a successful Franchise system in place without your involvement. Your staff will know what to do and the systems in place will solve problems. Since you’re no longer in the trenches, you’ll rely on the Franchisors great financial reporting systems so you’ll always understand what’s going on and have an early warning when things could go wrong down the road. Your associates and customers will be happier because your business will be predictable in providing great service.
2. You will be able to concentrate on strategies instead of operations. Passive Franchise ownership by its definition means you spend less time on operations. Businesses that have achieved strategic excellence typically make more money and run more smoothly. This leaves you more time and brain power to focus on strategy. Spend your time on important goals and working with the Franchisor to increase revenue, opening new markets and possibly selling the company.
3. Your business will become more attractive to an outside buyer. A great system that is in place and producing recurring revenue will attract buyers. Two of the most important things potential buyers look for are the ability to run the company after the purchase and a healthy flow of sales that will continue after the transition.
When you make yourself operationally irrelevant and move into passive ownership, you can demonstrate the business is not based on what you do, but on what has been created. This demonstration will make a potential buyer interested in your business. That is why Franchises become a valuable asset.
To learn more about Passive Ownership, and the opportunities that exist, contact me at Joshco Partners for a free consultation.