How to Earn Passive Income Through Franchising: Soccer Shots Franchise

Erika and Kareem Hall wanted to create a passive income stream, so they looked into franchising.
In 2018, they bought a Soccer Shots. The initial franchising fee was $29,500, with additional costs.
Today, they own two locations and have done over $1 million in revenue. 
In 2017, Erika and Kareem Hall started looking into ways to earn passive income.”We were both really happy in our careers but, at the same time, we wanted another stream of income that could help with other things like investments or just adding to the satisfaction of our life,” Erika told Insider.She’s an associate professor at Emory University’s business school, while Kareem runs his own consulting firm after spending years in the corporate world at companies including Bain and Accenture.The Atlanta-based couple with two young kids wanted their third income stream to be as passive as possible. They started looking into franchising, which Erika had learned about through two of her friends: One had recently bought a franchise with Primrose Schools and the other had started her own company and became a franchisor.What the Halls liked about the idea of investing in a franchise was that there was a pre-existing model for how the business should be run.”We didn’t want to reinvent the wheel,” said Erika. “And franchising offered us the opportunity where we wouldn’t have to start from scratch.”Selecting the right franchise to buy: Soccer ShotsAs a starting point, the Halls reviewed lists of top franchises from websites like Franchise Business Review and Entrepreneur, which include helpful information like the total start-up investment, net worth requirement, and royalty fee. Specifically, they were looking for the top franchises with a lower buy-in option.Another important criteria was buying a franchise that allowed them to do executive ownership, which is when you employ somebody to operate the business and is much more hands-off than an owner-operator model.They were also hoping to align their interests with the company, Erika said: “I’m very into fitness and Kareem is into sports, so we wanted to stay in that space.”Ultimately, they went with Soccer Shots, a children’s program that partners with local schools to help kids develop both soccer and life skills. It made sense not only because of their affinity for sport but also, “at the time, we had a one-and-a-half year old, so we were really immersed in early childhood education,” she added.Plus, a Soccer Shots territory in Dekalb County, where the Halls lived, was available. 

The Halls bought their first Soccer Shots franchise in 2018.

Courtesy of Erika and Kareem Hall

Buying the franchise wasn’t as simple as cutting a check. “Soccer Shots may be a little bit different from other franchisors, in that they also want to make sure that you’re a good fit, so you have to go through exercises,” said Erika. “We had to cold call five daycares in our territory and see if they’d be interested in our services. We had to estimate how many seasons we’d have and how much we’d make every season, so they wanted to see if you could budget and how you would describe yourself if you were selling to a daycare.”They also had to put together a PowerPoint presentation for Soccer Shots’ executive team at the headquarters in Pennsylvania. Kareem’s experience helped set them apart for this particular phase of the interview, Erika said: “I think it went really well because Kareem is a consultant. All they do is create PowerPoints all day.”Buying their first Soccer Shots for $29,500 plus additional start-up costs Soccer Shots officially offered the franchise to the Halls in September 2018. The initial franchising fee was $29,500, which they paid for out of pocket. As a professor, Erika gets a nine-month salary that’s paid over 12 months, plus “summer funding,” she explained. “The summer funding is a huge lump sum, so it’s not allotted into how we figure out what we can afford during the year. We used that money, which is around $30,000, for the initial franchise fee.”But that wasn’t their only start-up cost.To get up-and-running, they spent another $7,570 on things like printed marketing materials, flights and hotels to attend trainings at the headquarters, technology fees, equipment, and insurance. They also needed to hire and pay the salary of their executive director, who would be managing the franchise.The Halls used ​​Seek Capital, which allows small businesses to apply for funding, to cover their start-up costs. They were approved for up to $76,500 across various credit cards and locked in a 0% APR for nine to 15 months, depending on the card — meaning, they had that amount of time to pay back the cards before interest would start accruing.”It definitely was a little bit risky but we did think it was necessary just to make sure we knew we had that first year of expenses covered,” said Kareem. In a worst-case scenario, they wouldn’t be able to generate the revenue to pay off the loans before the interest-free period was over. It didn’t come to that — the Halls used $52,000 of the money they were approved for and paid it back before interest started kicking in — but they did have a contingency plan. Thanks to Erika’s summer funding, “we knew that if we weren’t successful, we could definitely pay this off on our own, prior to any of these terms coming due,” she said. “In this way, it lowered the risk for us.”Launching in January 2019 and coming out of Covid net positiveAfter buying the franchise in September, it took about four months before the Halls were ready to launch. “It was a brand new territory — there wasn’t a Soccer Shots in Dekalb County — so we had to completely launch that,” said Kareem. “At the beginning, the commitment is definitely a lot higher, even if you’re an executive owner. But we felt like we were prepared because we had to think about the plans before we even were awarded the territory.”They set up an LLC and banking accounts, secured financing, and started looking for an executive director to manage day-to-day operations. Finding the right person for the job “was probably going to be one of our most important decisions, period,” said Kareem. “So we put a lot of time up front figuring out what type of director we wanted before we even started the whole interview process.”After several rounds of interviews, they hired Jon Brock in January 2019 and worked alongside him for about six months before stepping back and handing operations over to him. 

The Halls wanted to align their interest in sport with their franchise purchase.

Courtesy of Rachael Victoria Photography

The franchise started bringing in revenue right away. One of the advantages of Soccer Shots’ business model is that money starts coming in before you provide the service, said Erika: “Parents go in and they sign up for a season that might happen three months from now, so now you have your money to hire the part-time coaches.”In their first month, they brought in $8,700 in revenue. They closed year one with $133,242 in revenue, but didn’t profit, said Erika “We took a loss of $7,000 in the first year because we paid the credit card back.”While they didn’t take any money from the company the first year, they started profiting in the second year, despite Covid hitting and shutting down their in-person sessions. They transitioned to virtual classes and were able to secure a PPP loan from the government to carry salary costs until their revenue returned to normal levels. Coming out of Covid, since soccer is mainly an outdoor sport and was considered safer than indoor activities, they were able to pick up momentum pretty quickly, noted Erika: “Whereas gymnastics and dance and all these things really suffered, soccer thrived. So I think that’s why we came out of 2020 net positive.”Growing to 2 locations and doing more than $1 million in revenue working 1-2 hours per weekIn 2021, a new Soccer Shots territory opened up in the county where Brock lived and he recommended they buy it together.”We thought that was a really good model and made sense in terms of our goal of developing that long-term passive income,” said Kareem. Plus, it was a great opportunity for Brock, who owns half of the second franchise. The Halls have learned the importance of hiring excellent staff and doing everything they can to retain them. Some of that is luck, they admitted, but a lot of it is how you treat your employees.”Once you do have someone that is great, which is so hard to find because the labor market is intense, then invest in them,” said Erika. “If they have something that they want to talk to you about, make the time for it. If they’re requesting health insurance, see if that’s a possibility. If they want more equity or to grow, don’t ignore those things because people are always looking for other opportunities, so you want to make sure that they’re happy.”Between their two franchises, the Halls have done more than $1 million in revenue since launching in 2019. In 2022, they brought in $537,000, according to profit-loss statements viewed by Insider. This year, they’ve already surpassed last year’s revenue and done $545,500 as of August 2023.Once you do have someone that is great, which is so hard to find because the labor market is intense, then invest in them. Erika Hall, Soccer Shots ownerThe Halls have 11 members on staff, including four full-time employees. On average, they spend one to two hours a week working on Soccer Shots. It’s mostly back office tasks that come up, said Erika: “For example, we recently started retirement plans and life insurance and health benefits for everybody. That’s going to go through me because we don’t have an HR department yet.”Erika and Kareem plan to continue working full-time. Their salaries cover their household expenses, while their franchise profit is extra money they can use to invest for their futures or in experiences they might not have been able to enjoy otherwise.”This money is for investment — we use it for our children’s 529 plans or investment vehicles like mutual funds — or to bring us happiness or joy or introduce our kids to an opportunity that they wouldn’t normally have,” said Erika. “We always say: We don’t just want to live the length of life, we want to live the width of it.”

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