The Only 3 Franchise Models That Actually Work

There's a dangerous myth in franchising that refuses to die:

"I'll buy into a proven brand, hire a GM, let them run the day-to-day, keep my 9-5, and the cash will roll in."

I wish that were true. It's not.

This fantasy is often sold by franchise sales reps who need you to sign contracts. But fantasy in franchising gets expensive fast.

Here's what actually happens: That manager quits 4 months in. You scramble to replace them while still working full-time. The business bleeds cash. Suddenly YOU become the emergency plan.

If the operator fails, you are the operator. 

It doesn't matter if you've got another job or never planned to be in the store. You don't get to outsource ownership.

Now, this doesn’t mean you need to be the one flipping burgers. 

It means weekly meetings with your GM, knowing your cash flow patterns (not just glancing at EBITDA), monitoring marketing (not cutting spend when cash is tight), leading the culture, and making hard calls—including replacing underperformers quickly.

So what does successful franchise ownership actually look like?

There are only three models that win in franchising:

1. Owner-Operator: You buy a job and own it. You're in the business, running daily operations, building sweat equity. Smart owner-operators eventually fire themselves by building systems and people.
   

2. Semi-Absentee with a Real Operator: This works only if you have elite-level talent—multi-unit-level, district manager caliber. Someone who can lead people, drive numbers, manage marketing, and make decisions like an owner. These folks are rare and expensive but worth every penny. This still requires consistent oversight from you—just not daily involvement.
   

3. Investor-Operator Hybrid (My model): I invest, hire operators, and give them equity. They earn a salary but also own a piece of the business. Ownership creates alignment—you can't expect someone at $60K to bleed for your brand, but give them upside and they'll care about growth like you do. When they participate in quarterly distributions and see real cash hit their account when the business performs, they'll make decisions like an owner, not an employee.

The common thread across all successful franchise operations? 

Active leadership and aligned incentives. 

The system itself isn't magic—it's how you implement it that creates sustainable results and real wealth.

Until next week,

Erik

PS: If you're serious about making franchising work, check out our private Facebook group. It's where owners share what's really happening in their businesses—both wins and costly mistakes that don’t make it into the brochures.