Home-Based Franchises : Pros & Cons

You may have heard about home-based franchises, and are wondering if investing in and starting such a business is something you might be interested in. The information in this article can help you in your decision, by presenting both sides of owning a home-based franchise.

First, let’s look at the word “franchise”. You probably already know that businesses such as nationally and internationally known restaurants, auto repair chain stores, and even some sports teams, especially professional ones, are franchises.

The person or people who operate or want to operate these types of businesses paid a fee and entered into a formal agreement with the owners of the franchise, or the “franchisors”. The business owners or “franchisees” can now use the franchiser’s trade name in their business, and can also receive help or support from the franchisers.

Now that we know what a franchise business is, let’s look at the differences between a home-based franchise and a regular franchise. A home-based franchise is operated from your home or a building on your property. You can also operate from a building that you own, but that may not necessarily be located in the same place as your residence.

A regular franchise may have a specific type of building, or may require that the physical location have a distinct appearance or even a unique atmosphere. In other words, there can be no question as to which franchise you are affiliated with.

There are some advantages to operating a home-based franchise. These include, but are not limited to the following:

You do not incur additional expenses from having to rent or lease a separate building.

You do not have to commute to your franchise location. It’s in your house or on your property, so you’re already there.

The whole family can be involved. Young children can stuff and seal envelopes and affix postage (if you don’t use a postage meter), or help you separate orders and prepare them for delivery. Older children, especially those in middle or high school can help with clerical duties.

As with other things, however, a home-based franchise does have disadvantages.

You’re never “away” from your franchise, even if you’re not actively working. Reminders of your business are all around your house.

You may have to have your residential property rezoned in order to operate a home-based franchise.

You may have to purchase business licenses, pay operating fees, and incur other expenses that come from operating a home-based franchise. Further, your property taxes may increase due to your business being located in your home or on your property.

You may have to make changes to existing structures in order to meet building code regulations especially if the franchise involves food preparation or a similar operation.

Why Do You Want to Own a Franchise?

An inquisitive child never seems to stop asking the question, “But, why…?” almost to the point of absurdity. As adults we sometimes need to remind ourselves of the value in this soul-searching methodology when it comes time for critical decision-making, such as “Why do I want to have my own franchise business?”

Many people who go through this process of wanting to own a business start with valid reasons. Perhaps you see yourself in one of these scenarios, or something similar:

• You want to transition out of an unhappy situation with your career progress.
• You are experiencing a deteriorating relationship with your employer or supervisor.
• You may have actually lost your job, as is all too common these days.

Therefore, it is only natural for you to gravitate towards the desire to own a franchise. Now that you have presumably determined the basic rationale, it is time to look in the mirror and ask yourself a few more deeper, thought-provoking “why…because” questions and answers:

• Because being a franchise owner hopefully will mean better income for you?
• Since you want to advance your lifestyle to the next level?
• Because you can be your own boss and provide a different change of pace?
• So you see yourself as wanting to grow over the long term?

Let’s examine each of these tough questions in a little more detail because they are all well-founded. Also, they might be able to confirm that your personal desires and career needs will match the benefits of owning and running your own business.

Most franchise owners enjoy the benefit s that result from a proven business model. Thus, earning a six-figure income can be a very good incentive, but remember that there are no guarantees in life. Also, it is important to realize that often statistics show that it takes a few years of hard work before you can realize the fruits of your labor.

For some, income and lifestyle go hand-in-glove. For others, working from a home office, being with the family, or getting away from shift-work are other key factors for wanting to run a franchise.

In addition to training provided by a franchisor, you should have some practical business knowledge and experience. Being the “boss” often requires a lot of personnel responsibility and large doses of “the buck stops here” attitude.

Owning a franchise can be very rewarding financially as well as personally. If you are a goal-setter and an achiever, franchising can offer opportunities that will challenge you to address and overcome.

While none of these reasons or statistics stand totally infallible, they do underscore the importance to contact an expert franchise consultant for guidance in this critical business decision.

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