You must also consider the cost of operations for your franchise, and include the expense of hiring a GM to replace your contribution of time. If the expense for a GM significantly lowers your franchise profits, you may not have the capital to maintain his or her salary. This would almost certainly require you to become an owner operator.
Are you just an investor seeking a passive income or are you a type-A personality ready to make a career out of controlling your own operation? Are you buying a job or an investment like a stock or bond fund? Only you can answer this question to your own satisfaction.
Finally, if you’re purchasing a franchise re-sale, how much time you spend micro-managing will rest upon the seller’s prior practice. Was the seller an absentee owner or was the seller also the GM? If the seller has a good management team in place and is already profitable, his or her absence from daily operations will probably not matter very much. Conversely, if the seller was also the GM, then you’ll need to fulfill that role as an owner operator, at least until you can train someone to take over as GM.
If you buy the right franchise, hire the ideal employees in key positions, and have the capital requirements, a franchise re-sale is an ideal way to add to your passive income. Nonetheless, if you need to build and create and enjoy a career, then becoming an owner operator is probably a better choice to satisfy your goal to achieve personal success.