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.