Disadvantages of A Home Based Franchise Business

home based franchise businessAs with advantages, the franchise system also has some additional disadvantages. As already mentioned, the advantages and this amount is often that of Outlook other person. The same point that is an advantage for one person can be a disadvantage for another depending on what he wants out of his business set up. For example, a franchise is a great idea for someone who has no business experience because they offer ongoing training and they give you a system within which you are required to work. You don’t need to change a lot of things or come up with the very different ideas to run a business to make it successful. This syntax can be a disadvantage for people who are independent and want to do things completely their own way. For those people these restrictions, regulations may be too stifling. Anyway, these are some of the potential disadvantages of buying into a franchise system to do business from home.

You work without a great deal of supervision. This could be a disadvantage because even if you start a business from your on your own, there is really not going to be any supervision and you are going to have to be in a place where you drive yourself and motivate yourself and your employees to reach a business school.

You are required to pay an ongoing fee to the franchisor. This may or may not be an advantage depending on the kind of business you’re doing. If you’re doing a lot of business, the marginal royalty that you have to pay to the franchisor may not matter much. However, if your business is marginal, basic fee and royalties can quickly become an anchor that drags a business down.

Ultimately, even though you have a business of your own, the franchisor is the boss. The franchisor lays down the rules and regulations about how you run your franchise business. You have to adhere to these laws otherwise you run the risk of terminating your agreement or be in violation of it. Violating franchise agreement could not only result in a termination but could also result in the nasty possibility of a lawsuit, loss of income etc. Any business is the risk. However it should be mentioned that choosing a successful franchise model, this is considerably reduced as long as you have determined that there is a demand for the franchise’s products and services in your particular area.

In the long run independent businesses tend to be more successful and financially rewarding to people. Because all efforts at a person puts in a business of his own goes directly to benefit the person, self started businesses tend to be more successful in the long run provided the person can make a success of the startup. Of course, there is more effort involved in starting a business from scratch such as doing market research, making business plans, hiring the right people and making right decisions all along.

Having a franchise also limits you in the way you compete with the competition in your area. Because of the restriction by the franchisor, you may not be allowed to counter the promotional tactics by the distributors, retailers and competitors in your area. It is mostly up to the parent company to promote itself and make sure that you are suitably advertised and promoted.

If you have decided that the franchise is the right way to go about setting up your home-based business, you should explore and do all research. If you have identified a particular franchise system, try and talk to the current owners of existing franchise and get a candid opinion from them. Spending time in existing franchise and talking to existing franchise owners is an extremely good idea as it may get you a direct feedback. Disgruntled franchisees may not be very shy about telling you about their bad experiences. However, do not get discouraged by negative feedback since they may be a result of a lot of factors some of which might not have to do anything with the incompetency or bad behavior on the part of the parent company. Buying a franchise is usually more expensive than starting your own business so take your time and give in the due effort to find the right one for yourself.

Advantages of a Home Based Franchise Business

home based franchise

Like any other job or business opportunity, a home-based franchise system also has its advantages and its advantages. How suitable franchise businesses for you will mostly depend on your personality, your skills and your requirement. Whether a franchise business is right for you, will depend on your Outlook and what your idea of having a business of your own is. For many people a franchise can be too restrictive while for others it is just the perfect way to start. These are the advantages of buying into a franchise system.

One of the biggest amongst these is that you don’t have to start a business from scratch and you buy into a business model that has a proven track record. A franchise business that is successful has probably perfected a system to many through it and try and its past success goes on to prove that you are undertaking a much less risk by choosing the model rather than starting something completely.

Starting a franchise can translate into quick startup with immediate cash flow.

When you buy into a particular franchise system you will probably have an estimate of how much can. So in a sense you have an idea of whether a particular business is going to meet your financial expectations. If you follow the same system that has proven its track record in the fast, you are almost sure to make the same kind of profit that the franchise system has been making for the people.

A franchise is a good option for people who have not had a business experience in the past.

Many executives prefer a franchise system because most of the things such as, business development, marketing, advertising, generating customers, generating a new brand image is all taken care of. Many people who start a franchise business with a known corporation can concentrate their efforts on jobs that they are already good at handling such as managing employees and workflow, attending to executive jobs, taking care of paperwork, dealing with dealers and clients over the phone etc.

A franchise business also usually provides training to the franchisee and offers ongoing support.

You have access to a network of other franchises were in business just like you. Many franchises offer special websites, arrange conferences and conventions where all the franchisees can get together to talk and discuss and share their experiences.

Many franchises provide opportunities for regional and national cooperative advertising. Being associated with a brand name you get to save a lot of money on this aspect of your business as well. Getting exposure on your own for your own business could probably cost you a lot more as well as a lot more brainstorming creating effective marketing strategies.

As franchisee associated with a known name, you could have an upper edge when it comes to dealings and negotiating with people like landlords, banks, lending institutions. You make it preferable rates and preference for the popular and major retail locations and down as well as get more easy qualify for financing from a stop being associated with a known brand name and starting a franchise tends to instill more trust in other principle were going to be involved in the business.

Common Elements of A Franchise Agreement

  1. franchise business from homeGrant of franchise, defines the nature of the franchising agreement.
  2. Use of trademark, patent and copyright, spells out how you can use the franchisors trademarks and copyrights.
  3. Defining bodies, lists the parties to the agreement and sets forth the independent relationship between the parties.
  4. Payments, spells out how you are supposed to pay the franchise fee and any others require royalties or ongoing payments.
  5. Term of agreement, enumerates the length of time that the agreement will be in effect. Most of the franchise have agreement for five years whereas many also have an agreement for ten years.
  6. Franchise renewal, details how the agreement continues in the future.
  7. Developing and opening, lists the length of time that you have to start operating your business after signing the agreement which is usually 90 to 120 days.
  8. Territory, spells out any restriction on the areas in which you can upgrade your business. Generally, the larger the territory the larger the franchise fee table.
  9. Advertising, sets forth the requirements for using the franchises logos, trademarks set up.
  10. Equipment and supplies, tells you what supplies and services must be purchased direct from the franchisor.
  11. Training and assistance., details about the training offered by the franchisor as well as any ongoing support and assistance.
  12. Assignment of franchise, these were the rules regarding transfer of ownership, the person or entity should the franchisee decided to sell the business.
  13. Termination of franchise agreement, sets forth the legal requirement for terminating the agreement.

Be sure that you understand every aspect of the franchise agreement. By understanding we do not simply mean that you have read it but understood every single line. The legal ramifications and requirements of every single point may have far reaching consequences if you do not understand them. A point that you overlook and big huge difference somewhere in the future regarding how you run your business. Which is why the help of a qualified attorney who specializes in franchise law is so important.

Legal Technicalities of Starting a Franchise Business

home based franchise business

Many franchise of the one by the state rules and regulations that control the sale and functioning of franchisees in the state. When the state laws are absent, the franchise is usually governed by the federal law. In most cases the franchising laws and regulations actually protect the franchisor and not the franchisee. Here are some of the common legal issues that you should be aware of when buying into a franchise system.

The Uniform Franchise Offering Circular, UFOC

In states that do not have their own franchising laws, the Federal Trade Commission has established a comprehensive code of regulations that are referred to as franchise rules. One of these rules states that the franchisor is required to provide prospective franchisees with with the detailed disclosure in a statement called the uniform franchise offering circular.

This is circular or document contains a wealth of information regarding the parent company and its franchise offer. You should make sure to get a copy of this document before you even consider signing on for the franchise company. The information contained in the telephone franchise offering circular has a direct impact on your decision to buy into a particular franchise opportunity or not.

The uniform franchise offering circular contains the following information.

  1. The franchisors name.
  2. Complete and accurate as description of the business.
  3. A listing of people affiliated with the franchisor.
  4. Background information and principals in the company including business experience and track record.
  5. The franchise’s financial information.
  6. Detailed information about the number of franchisees, the failure rate, termination rate. You should also know that the failure of a franchise is means that the company closed its business due to financial reasons to stop some franchise companies may prevent this from happening by the acquiring the franchise from the franchise holder. The franchise is terminated but is technically not a failure. This helps in keeping the statistics looking good on paper.
  7. Bankruptcy and litigation history of the franchise and the principal officers.
  8. The franchisee fee.
  9. Ongoing fees royalties and other payments to be paid to the franchisor. An itemized list of goods and services that must be purchased, rented or leased directly from the franchisor.
  10. Terms of franchisor provided financing.
  11. Restrictions on how you are to a operate the business.
  12. Training programs available from the franchisee.
  13. Information governing the termination of the franchise.

For additional information on franchising laws and regulations you can consult your state attorney general office or contact the Federal Trade Commission at www.ftc.gov.

What Is A Home Based Franchise Business

What is a home-based franchise?

home based franchise

You have probably visited the premise of the most popular franchise system in the world without even knowing that you have. The name is McDonald’s. McDonald’s is probably the most successful franchise idea in the entire world. When you visit any McDonald’s in anywhere in the world, you get the same look, feel and the same kind of food. This is probably the number one advantage of having a franchise as a business. If you have the franchise of a known organization, people instantly know that they are going to get the same product that they have come looking for no matter where in the world your franchise is. In a world where corporate trademarks, logos and brands have taken on a great meaning, franchising system gives a business startup those advantages. It was estimated by the international franchise Association that franchisees all the world employ millions of people and the churn out billions of economic output every year. In the United States alone this figure is 9 million people that produce $600 billion of economic output.

There are other popular franchisees such as Subway, Curves, Quiznos and Burger King. However, these are large-scale franchise systems and not exactly a setup for a home-based business. You’ll probably have a more difficult time identifying a franchise system that is ideal for business from home. However, this does not mean that they do not exist. The truth is quite to the contrary. Franchise system come in a wide array of sizes, shapes and styles. You can find a home-based franchise to start a home-based business in any industry ranging from babysitting to photography,. You’ll find a franchise system to fit your personal needs if you know where and how to look. And we are going to make that extremely easy for you.

What is a franchise?

The franchise is an agreement where a company gives another business the right to distribute its products or services. Typically the franchise also grants the franchisee to write to use its logo and branding. This is an important part of a franchise set up where you get associated and work under the known name of well-known brand or trademark. Typically, the company giving the franchise has a successful and proven business model that can easily be replicated by others.

Following elements define the franchise.

  • Use of a trademark.
  • Payment of fees and royalty.
  • Significant assistance and training provided by the franchisor.

Who is the franchisor

The company that owns the franchise trademarks, trade secrets and the successful business model that gives out its business opportunity to other people and businesses is called the franchisor.

Who is the franchisee

The individual or business that pays to use the franchise model of business and to use the trademark, trade secret and successful business model to run a business on their own while paying ongoing fee and loyalty to the parent company is known as a franchisee.

Fees and ongoing royalties are paid to franchisor by the franchisee in one or more of the following ways.

  • A one-time payment fee to buy the franchise business model.
  • An ongoing flat fee payment.
  • Ongoing sliding scale payments.
  • Ongoing royalties.
  • Advertising fees.

The fee that you have to pay to buy a franchise business would depend considerably from one business to another. Also buying the franchise and the fee that you have to be pay might just be might not be the total cost that you need to undertake to start business. For example if you need to buy additional equipment, hire people, these costs may not be included in the franchise fee.

A popular home-based business franchise by the name of Jani King specializes in commercial cleaning services. It has an upfront franchise fee of $8600-$16,300. Additional startup cost of about $3000-$18,000 with an ongoing royalty rate of 10%. This is substantially more affordable than let’s say a McDonald’s franchise which costs about $45,000 just to buy. Additional setup costs may run from $400,000-$1 million.

Before you can choose a franchise business to run from home, you need to do your research. You need to understand that a franchise business has its advantages and disadvantages. Also each separate business has its own pluses and minuses. You need to decide which one is best for you.

A good idea to get an extensive listing of franchise opportunities both home-based and otherwise would be to check out the entrepreneur Magazine’s franchise 500 list on its website that www.entrepreneurmag.com

Building A Home Business From Your Hobby, Interest or Passion

How to build a home business out of something that you love to do

building a business

Wouldn’t you love to do what you love to do for a living? The good news is that no matter what your interest or hobby, you can turn it into a home-based business in almost all situations. The possibility of converting your passions and interests into a home-based business is almost unlimited. Millions of home based business owners are doing exactly that and creating a great deal of success for themselves and their families. The question that arises is that how can you convert something that you love doing into home-based business. Here is a quick pointer.

  1. Provide a service to others who do what you love.
  2. Focus on doing just the things you love.
  3. Teach others to do what you love.
  4. Write about what you love.
  5. Speak about what you love to do.
  6. Create a product related what you love.
  7. Sell what you love.
  8. Promote what you love.
  9. Organize what you love.
  10. Set up, repair, restore, fix or maintain what you loved.

Buying Another Business When You Do Not Want to Start From Scratch

For many people, starting a business from scratch either seems too risky or too scary. Sometimes people cannot decide the kind of business that they want to stop. If you fall into either of these categories, then buying an existing business may be a solution for you. The first obvious advantage of buying an existing business is that you buy a system that is already in place. You do not spend too much money, effort into finding new customers, creating marketing strategies, generating sales, hiring new people etc. When you buy an existing, you usually buy a business that is up and running and has its basic infrastructure in place. Unless you intend to bring about some major changes in the running of the business, buying a business could be as simple as paying the money, putting your sign on the door and letting the revenues coming.

However, what is very important understand is that before you buy a business, you need to do very careful research. Your decision to buy a business has to be based on a careful assimilation of data and information regarding the business. Typically, you will need to examine the financial documents of the business such as income tax returns for the past three years, all legal existing contracts, statement for future projection of income, check the records for any lawsuits, bankruptcies or violations of the federal trade law etc. In order to accomplish the job of checking out an existing business before you buy it, you will usually require the assistance of an attorney, an accountant and even a banker. The reason for doing a thorough check of the business before you buy is that normally buying an existing business proves to be a much more expensive proposition than starting a business of your own. The high price is a cost that you paid for getting a working and successful system that is already in place.

Whenever you are considering buying a business, consider the following points.

Make sure that the business you’re buying is a fit with your requirements and personality.

If you buy into a franchisee, you should know that they usually require the business owner to adhere to a strict system of rules, procedures and policies. If you’re not comfortable with being told how to do business or being restricted in any manner, then buying a business franchise may not be the right option for you. However, if you’re most comfortable with doing executive jobs for a business such as making calls, managing employees, attending to paperwork etc. than the franchise might be very good option for you.

Make sure that there is an existing market.

One of the first questions that need to be asked when purchasing an existing business is why the business is for sale in the first place. The reason should not be that it is a dwindling demand for the product or the surface. If the business is indeed not doing well, then the reason for the lack of success should be something that you can fix after buying it.

Make sure that the company has a good reputation and is well-known.

This is an extremely important points to consider when buying a business. It is a fact that more than 90% of the businesses that offer franchise, direct selling and business opportunities go defunct within five years leaving their homes high and dry and sometimes even bankrupt. Make sure that the company were planning to do business with has been in business for more than five years.

Top Ideas For a Home Business

Top 18 home based business opportunities

The following are some of the ideas for top home based business opportunities. These ideas have proved themselves to be very adaptable to a home-based set up and have proved to a formula for success for many entrepreneurs and business startups.

  1. Bodywork or massage therapy.
  2. Computer consulting for small and home businesses.
  3. Services for elders.
  4. Financial advising.
  5. Pet sitting and other services for our members.
  6. Technical writing.
  7. Virtual assistant.
  8. When merchant or auction trader trader.
  9. Consulting service.
  10. Financial planning.
  11. Patriotic products.
  12. Referral-service.
  13. Personal trainer.
  14. Technical consulting.
  15. Online games.
  16. Maternity clothes.
  17. Online learning.
  18. Life coach.

Starting a Business From Scratch

Starting a new business at home from scratch – The Advantages and Disadvantages

For many people wanting to start a business from home, starting something completely new and from the scratch is the only option that will do. The reason is that the kind of satisfaction and pleasure that you can get from creating something completely off your loan cannot be had by choosing other options for doing business such as franchisees and business opportunities. The kind of pride and even ego satisfaction that a person can get from building something from ground up cannot be matched by any other kind of home-based business. It is true that you may not get it right first time and there may be a longer learning curve involved, but in the long run a self-starter business brings more success to people as compared to other options.

Starting a business from scratch at home may also be the quickest and least expensive way of starting up. There is no need to fill out a bunch of applications or save up money to buy into a franchise. Franchise for reputed brand names can be phenomenally expensive. Some of the very popular franchise can easily run into a field of tens of thousands of dollars and even hundreds of thousands of dollars. If you want to start a business from home and you have an idea for it, there is no reason why you couldn’t start a business right now.

Starting something from scratch at your own home could be as simple as printing out a few flyers on your home printer and distributing it around the neighborhood to get the word around. This will especially be helpful if the services that you are offering is applicable to your community and there are already several viable customers living in and around your home.

It is a fact that the largest most successful companies today were at one point started as home-based businesses. Some examples are Hewlett-Packard that was started in David Packard’s garage with a working capital of $538. Amazon.com was founded in the garage of Jeff Bezoz, the CEO and Founder for the company.

While these examples are exceptional, not everybody wishes to make their home business into international and multinational corporations. With a home based business you can enjoy just the kind of success that you want. Different people will have different expectations from what they want from their business life. Some people may simply want to pay the bills and do exactly what they want. This could be a source of happiness enough. Other entrepreneurs may want to start at home but see themselves building their business to be a larger enterprise where there have an office and employees. The point is that starting a business from home does not mean you have to limit yourself and your potential for the future. Starting a business from scratch and at home allows you to start at the scale you want and plan for the kind of success that you want.

Starting a Business from Home Doing What You Have Always Done

Choosing a home business based on your job experience or expertise.

For many people, the choice of a home based business comes from what they have already been doing in there previous jobs. If you convert your experience in the job into a home-based business, it will typically mean that you already have the skill and the know-how to perform the required functions. You may also be in a good position to know what your customers want. In fact you could have a ready network of potential customers waiting to sign up for your products and services.

Starting a business doing what you have already been doing has some advantages like you can set up a business more quickly and easily than choosing to do something that you’d never done before. For example, if you are a financial consultant, you could start a home-based financial consulting business just by setting up a respectable working desk, chair and similar arrangement for your customers in a your spare room.

  1. There is no learning curve involved. Starting something new could require you to take training courses and attend workshops in order to learn something more about the business. However if you continue to what you already have been doing, you would already be in possession of this information.
  2. You tend to be more efficient and effective at what you’re doing if you already have enough experience in that particular field.
  3. A very important asset with running a business is your reputation. If you already have a reputation of being good at your job, the same will carry on for you when you start your home-based business in the same profession.
  4. You could tap into your existing network of business contacts, clients and customers. Just make sure that you do so ethically and you are not in any kind of violation or ethical breach with your current or previous employer.

Many people choose to make home-based business out of what they currently do because it is the easiest choice to make. This kind of a business set up is usually the quickest and least expensive way to start in most cases.