I am often asked what the best franchises are for absentee owners. Typically, these prospective investors are people with excess money or persons approaching retirement age that want to put their money into a business that will generate profits for them over the ensuing years. Franchisors frequently tout their franchises as ideal for absentee owners. But the fact is that for many reasons, I have rarely seen a start-up franchisee that was successful as an absentee owner. Why?
The predominant, and perhaps only, reason is quite simply that a young business requires the focused attention of an owner who has his or her eyes on every aspect of the business. Employees—good employees—view their duties as the performance of the tasks that constitute their jobs. But a business if far more than that. Inevitably, critical tasks fall through the job descriptions of employees and be left undone.
Most owners, however, have an inherent sense of what is important and a compulsion to check all details. Most small businesses rise or fall on attention to detail. The owner of a taco franchise once told me that his success depended on being in the store every day and making sure that the sauce for the tacos was made just right.
This is not to say that absentee ownership is not possible. I know many franchisees who are absentee owners, but they are inevitably well established franchisees with highly developed management structures that are able to devote the kind of attention to detail that an on-site owner would give the business in any event.
Take heed if you are thinking about absentee ownership for a new franchise—the best course is to tend to the business yourself.