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

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