Work at Home Series Part 4: Franchising

For some people, starting from scratch is risky. They may not be confident enough in their abilities to start a business on their own. In these cases, a viable option would be to buy a franchise. There are thousands of franchises available today in the service industry, and most of them can be done right from your home. The low overhead cost of working from home actually makes starting a franchise business even easier.

Starting a business like this involves buying rights from a company with a proven track record. It also comes with the full support and training from the parent company, who will teach you their proven methods.

When you buy into a franchise, you pay the franchiser for the right to use their trademark, trade name, and products in exchange for the initial fee and ongoing royalties on your earnings. The smaller businesses will sometimes avoid the high cost of franchising by offering a license instead of a full franchise. This gives the start-up business permission to use the trademarks, business methods, and may include training in exchange for a fee and ongoing costs of goods and materials.

Advantages to buying a franchise include the business having a proven method, a lower time of return on income, an increased chance of having a successful business, as well as the training and support provided by the franchiser.

The drawbacks of buying a franchise is just as simple. You immediately incur debt and sometimes the royalty may be too high to justify the amount you can earn from running a one or two person business. If you're an independent type person, meaning "my way", you may find policies and procedures of the franchiser to restrictive or limiting.

Basically, when you buy a franchise you're buying into a proven business and the assistance to continue running that proven format. So, how do you decide whether buying a franchise is for you?

Ask yourself these questions:

1. How much structure do I need? How experienced are you at running the type of business you're considering? Do you want to make your own policies and procedures, or do you feel more comfortable following rules that are already set?
   
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3. How much am I willing to pay for the support? Does the franchise offer a superior method of doing business that will give you an advantage, or are you able to learn what you need from books, seminars, and college programs?
   
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5. Do I have enough working capital to make the business work? On average, when starting your own business it takes three to six months to generate a profit. How do the fees and payments to the franchiser compare to the option of starting a business on your own?
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Definitely a lot to consider. One thing to do that might help in making a decision is talking to other franchise owners. Ask them of their experiences and the integrity of the companies they've franchised with. Take it a step further, if you can find someone that went the franchise route and failed, this would give you invaluable information on what you will need to consider.

When you're picking what franchise to buy, the criteria is going to be the same as choosing any business start-up. Is it something you'll enjoy doing? Are you interested in learning more about the field? Will people in your community pay for this?

The most important consideration, however, is whether the franchiser is reliable, reputable, and solid. Once you know WHAT you want to do, you should investigate the franchises that you are considering. Franchises are required by law to provide a prospective buyer with the Uniform Franchise Offering Catalog, or UFOC. This is the basis for beginning your investigation. Don't just talk to who the franchiser recommends, talk with a number of franchisees to get the full positive and negative outlook on the company you're investigating.

Hopefully this will give you some thought provoking insight into deciding whether you will buy a franchise or not. There are great advantages in doing so, and in truth, it is one of the easiest options in the transition from employee to business owner.