Home Business Franchise
Your Small Business Franchise Opportunities


Home Business Franchise
Although many home-based franchises are out there, you may not be aware that franchises are available in an incredible array of sizes, shapes, and styles. From cleaning services to babysitting to photography studios, a home-based franchising opportunity to fit most anyone's need is out there.


Home Business Franchise If you've ever eaten at a McDonald's restaurant, you know what a franchise is. No matter which McDonald's restaurant you visit, whether it's in Iowa, England, or Hong Kong, you can be fairly certain that your cheeseburger and French fries are going to look, feel, and taste the same. According to a report published by the International Franchise Association (www.franchise.org), franchises employ more than 9 million people and produce more than $600 billion of economic output a year, just within the United States.


Although popular franchises such as Subway, Curves, Quiznos, and Burger King are easy to think of, if we asked you to identify a popular Home Business Franchises, you would probably have a harder time. Although many home-based franchises are out there, you may not be aware that franchises are available in an incredible array of sizes, shapes, and styles. From cleaning services to babysitting to photography studios, a home-based franchising opportunity to fit most anyone's need is out there. Home Business Franchises


What's a Franchise?


A franchise is an agreement in which one business grants another business the right to distribute its products or services. Typically, the company that grants the franchise has developed a successful and proven business model that is easily replicated by others. According to franchising expert Gregory Matusky, three elements define a franchise company:

  • Use of a trademark or a trade name
  • Payment of fees or royalties
  • Significant assistance provided by the franchisor


As the old saying goes,"It takes two to tango." Similarly, every franchise agreement involves two key parties:

  • Franchisor: The company that owns the franchise trademarks,trade secrets, and successful business model.
  • Franchisee: The individual or other entity who pays the franchisor for use of trademarks, trade secrets, and successful business model.


Of course, all the trademarks, successful business models, and assistance come at a price. Fees are paid by the franchisee to the franchisor in the form of one or more of the following:

  • A one-time payment
  • an ongoing flat-fee payment
  • Ongoing sliding-scale payments
  • Ongoing reyalties
  • Advertising fees

Home Business Franchise
The fees paid by the franchisee to the franchisor vary considerably from opportunity to opportunity. For example, the initial fee to buy into a McDonald's franchise is around $45,000. However, actual startup costs(leases, building, equipment, labor, supplies)for a location run from $400,000 to more than $1 million. On top of that, franchises are required to pay a royalty rate of 12.5 percent or more on every dollar that they bring in. Despite all these fees, McDonald's franchises - though certainly unsuitable for a home-based business - are considered to be among the most desirable of all. Home Business Franchise


On the other hand, Jani-King, a popular home-cased business franchise that specializes in commercial cleaning services, has an up-front franchise fee of between $8,600 and $16,300, startup costs of $3,000 to $18,000, and an ongoing royalty rate of 10 percent. This is a substantially more affordable investment than the bricks-and-mortar opportunity presented by a McDonald's franchise, and you can run the business out of your own home. Of course, each has its pluses and minuses - you have to decide which is best for you.


For an extensive listing of franchising opportunities, both home based and not, check out Entrepreneur magazine's franchise 500 list on its Web site at www.entrepreneurmag.com. If you're the slightest bit interested in buying a franchise, chances are you'll find this list to be interesting reading! Home Business Franchises


Franchising Pros and Cons


Home Business Franchises - Buying a franchise brings potential positives and negatives. When deciding whether buying a franchise is the best way to start your own home-based business, weigh these pros and cons, and discover the best path for you. Here are some of the elements that franchises often have in their favor:


  • Buying into a franchise that has a proven track record and ongoing training and support can translate into a quick startup phase and almost immediate cash flow. And don't forget: Happiness is a positive cash flow.

  • Established, successful franchise are proven systems that are almost guaranteed to meet your financial expectations. As long as you play the game by the franchisor's rules, it's hard to lose.

  • Many people who start up a home-based business have never actually owned or run a business before. A good franchisor provides extensive training in how to operate and market the business.

  • You have access to a network of other franchisors who are in a business just like yours. Many franchisors sponsor special Web sites, conferences, or conventions that get franchisees together to talk shop and share their experiences.

  • Many franchisors provide opportunities for regional and national cooperative advertising - saving your money while giving your business more exposure than you would probably get on your own.


Of course, you want to think about the downsides to buying a franchise. Before you sign on the dotted line of that franchise agreement, be sure that you can tolerate these potential negatives:


  • You're required to follow someone else's system and procedures. For some prospective owners of home-based businesses, the whole point of starting a business is to get away from following someone else's rules.

  • You work without a great deal of supervision and direction. No one's going to get on the phone to wake you up if you're late to work; no one's going to constantly urge you to work harder or sell more. If you're not a self-starter, or if you lack the confidence to sell yourself and your products or services, this could be a very real problem, and it could jeopardize your prospects for success.

  • You may be required to pay an ongoing fee or royalty to the franchisor for the life of your business. Of course, if you're making lots of money, this likely won't be a problem. But if your business is marginal, franchise fees and royalties can quickly become an anchor that drags you and your business down with it.

  • Ultimately, the franchisor is still the boss. You have to follow the franchise's policies and procedures whether you agree with them or not. If you don't, you may be in violation of your franchise agreement - potentially resulting in nasty lawsuits, loss of income, and the termination of your business.

  • There are no guarantees. Your business may or may not be a success, despite all your hard work, all the money you invest, and all the time you devote to it. Any business is a risk, and a home-based business that you own makes that risk a very personal one.

  • The franchise agreement may not protect you against competition from other distributors, particularly those using the Internet. Long story short, you may make less money than you thought or were led to believe.


Related Resources on Home Business Franchise



Home Business Franchises Resource:Home-Based Business For Dummies (For Dummies (Business & Personal Finance))By Paul Edwards and Sarah Edwards


Home Business Franchise


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