Is $600k+ income from owning franchise worth it or begin REI now?

[Will Schroeder]

I am at a MAJOR career crossroads and seeking advice from investor/business owner minded counsel! I am currently making around $35k working at a premier fast food/quick service restaurant franchise. However, I am at the top leadership at the franchise and have a plan in place with the current owner/operator to apply for my own franchise. The timeline is 2 years out from actually getting my own franchise. Relocation will be mandatory and income can range from $100k-$200k+ for smaller revenue generating franchises to the average free standing franchise owner/operator taking in over $600k+ year.

The income received from the franchise works more along the lines of a variable income/commission style payout based upon revenue generated per month. The upfront costs & risks of launching a franchise are as minimal as possible in the market. Unfortunately, there is no equity at all in owning the franchise based upon the franchise agreement. The income works more like just a high salary than actual business ownership & true entrepreneurism. Good news is the franchise agreement does not restrict additional LLC's being created by owner/operator unless it directly competes with franchise or inhibits franchise performance.

My wife and I are looking to create our own real estate investment firm to acquire cash flow producing assets and establish generational wealth for our family. We are PUMPED to build a real estate investment portfolio and a strong real estate, construction and design branded business. Real estate, investing, construction/design, landlording, deal analysis & business ownership are true passions of ours, and we are trying to educate ourselves exponentially. We have carved out an exit plan from the franchise opportunity, but that would require us both to maintain a 9-5 role to keep the lights on while building REI incrementally. I have a significant amount of construction and leadership experience while my wife has significant experience in property management.

Basically, we trying to figure out if having a cash cow income is worth it in the long run in exchange for uprooting our family and working in 2 more years of hell and minimal pay. By being at that high level income from franchise ownership, that would provide a strong financial foundation but would prevent us from being able to begin investing realistically until we get to franchise ownership. What are your thoughts and recommendations?

If we do walk away from the franchising opportunity, I will need to supplement income via a 9-5 job until the REI business is up and running. What kind of 9-5 job would be worthwhile to attain to improve skillsets & networking to become REI (based out of Atlanta, GA) market with my level of experience?

[Bill B.]

Sounds a lot like the chick-fil-a plan. 

My comments would be if you walk away now you’re really not in a good position in regards to job history or financially. IF the 2 year plan is guaranteed. (Barring you screwing it up, and 3 years is fine) then you “HAVE” to stay. You appear very young and just a couple years of higher income history and it’s financial impact will have immense ripples over your future. 

I was able to retire at 35 after just 5 years of real estate investing making 1/2 of your low end estimate. If you can see yourself spending the next 2 years making sure you get the opportunity. And then when it comes use all the extra income towards your future as opposed to lifestyle creep, you should be working because you want to a dozen years from today. 

Ps. It would really help if you had a spouse that was excited about the real estate portion so you could stay job focused and keep that plate spinning. But it can be done solo as well. Good Luck.