Not defending EMH in any way, but there's a logical flaw in your argument: your wording implicitly pits a cherry-picked example against a broad average: "it's literally impossible [to invest in a small business and beat the market]" - that's not the point. There will exist examples where that worked, but there will also exist some where it failed (like in the article). You have to consider all those cases to compute an average return. And even if you do come up with a higher expected return for a private investment (I don't have the data), you also have to consider the variance/risk: a bad outcome for the S&P500 is maybe minus 20-40% in a year [0]; a bad outcome for a franchise can look like bankruptcy and/or eviction, like in the article.

I'm with the GP poster: if you're thinking about running a business in passive mode as an investment, as it seems it was pitched to those franchisees, you're highly likely better off keeping it in boring investment products. That's not even saying that sane (ie positive risk-adjusted return) passive income opportunities don't exist, but they almost certainly won't look like what's described in the article, with no strategic freedom (you're not allowed to close an unprofitable shop, wth?); apparently coupled with personal liability and massive fixed and upfront costs, that's an absolutely deadly mix. More generally, they will almost never come to you as a pitch, which should be self-evident.

[0] https://www.macrotrends.net/2526/sp-500-historical-annual-re...