Investing in a franchise can be a lucrative business venture.
But what if you don’t have time to dedicate full-time to running a business?
That’s where the absentee investor model franchise comes in. This type of franchise opportunity allows investors to pay a franchisor a percentage of their revenue without having to manage the day-to-day operations. Here’s what you need to know about why this model is becoming increasingly popular and how it could benefit your business.
What Is an Absentee Investor Model Franchise?
An absentee investor model franchise is an arrangement in which an investor pays a franchisor a percentage of their gross revenue (usually 5%), in exchange for the franchisor managing the daily operations of running the franchise. The franchisor acts as a manager and handles all aspects of running the business, including hiring and training employees, securing customers, dealing with suppliers, and marketing and advertising. In exchange for these services, they take a percentage of the revenue made by the franchisee.
According to the Spray Foam Genie Item 19 this still left a healthy Net Profit to the Owner/Operator of $541,260.08 on a two truck market.
Why Is It Becoming Popular?
The absentee investor model has become increasingly popular for several reasons. Firstly, it gives investors more control over their investments as they can choose which franchises they want to invest in without having to commit too much time or money upfront. Secondly, it allows investors to take advantage of franchising without having to actually run a business themselves; instead, they can rely on experienced professionals who are already familiar with all aspects of running that particular business. Finally, since each investor will only be paying 5% of gross revenue to have their franchise run for them (on top of a standard royalty and other associated fees), this makes it much easier for them to recoup their original investment more quickly than with other types of investments. This is great for investors who want to keep full time jobs or already run other businesses.
Let’s take a look at some of the most popular absentee “investor model” franchises: Spray Foam Genie, Fetch!, Furry Land, and Door Renew.
Spray Foam Genie is a uniformed Spray Foam Insulation Application business. Spray Foam Genie specializes in spray foam insulation. SFG team works tirelessly to provide you with high quality insulation you can trust. Total Investment: $250,000
Fetch! Pet Care is America’s largest and most trusted professional dog walking and pet sitting franchise. For the convenience of pet owners, Fetch! Pet Care’s skilled Pet Care Coordinators personally match all of their dog walkers and pet sitters – who are background checked, trained and insured – to meet the specific needs of each pet. With thousands of satisfied clients nationwide, Fetch! Pet Care has earned the reputation as the most relied upon and trusted pet care service in the country. Total Investment: $74,967
Furry Land Mobile Pet Grooming offers the best healthy grooming experience and essentials for pets without the Owner needing to leave their home. Inside the mobile salon, Furry Land has everything they need in order to provide grooming services efficiently and safely. Total Investment: $150,000
Door Renew focuses on refinishing wood and fiberglass doors with a focus on the Front Entry Doors. Our process will make the Door look brand new and is done at a fraction of what it costs for a brand new front door.
At Door Renew, door and wood refinishing is our specialty; it’s all we do. Total Investment: $150,000
Conclusion:
The absentee investor model is becoming increasingly popular among investors who want more control over their investments but don’t have the time or resources required to manage a business themselves. With this model, investors can still reap the benefits associated with franchising while relying on experienced professionals who already know the ins and outs associated with that particular industry. If you’re looking for an easy way to invest in franchises without having to put too much effort into managing them yourself, then this could be just what you’ve been searching for!
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