Here is an AllBusiness article on the subject of Home-Based Franchises. As it mentions, many home-based business opportunities are available as franchises, particularly for service-based home businesses.
One of the main advantages to buying into a home-based business franchise is that certain business components are already in place. Usually there is a well established product line and/or service procedure. In addition, the franchisor should have already done significant work on advertising, branding, establishing a lead generation system, and building a support system for franchisees. These things all take time and there certainly is something to be said for having them already in place.
Here are a few things to think about before considering a franchise.
Up Front Costs – A franchise opportunity will have up front costs, usually $10,000 and up for the good ones. Compare this to starting, say, an eBay business where all you need is a few hundred dollars to get started and you’ll see that up-front costs are a significant consideration.
Control – In a franchise arrangement, you can generally plan on giving up control of certain aspects of your business. The franchise may dictate such things as procedures, hours of operation, and even what you wear depending on the franchise business. If you embrace the challenges of being in full control of your own business, then you may not be happy giving up control of portions of your business.
Territory – In a service based business, you will have a territory to service. You’ll want to make sure that the territory in your franchise isn’t hemmed in too tightly by other franchisees in that same franchise business. Also, check to see if there is a competing franchise business in your prospective territory.
Ongoing Support – Fortune Small Business recently ran an article in their print magazine about small business franchises. It featured many case studies and several of them were horror stories. One recurring theme I remember in them is that the franchise offered little or no support after the sale and the franchisees soon felt abandoned and lost. You’ll want to make sure there’s a support system in place that you can call on long after you sign on the dotted line.
Research, Research, Research! – If you’re considering a home-based business franchise, do your homework and research the opportunity thoroughly. Listed below are some AllBusiness articles that talk about ways to research franchise businesses.