Ten Factors to Consider Before Purchasing a Home Business Franchise

A home business franchise can be a great option when considering a home business. However, there is a lot to think about, because the outlay of money is a lot more initially. Here are ten factors that must be weighed when choosing a home business franchise.

1. 1. Cost: stay within your comfort zone. This includes start up costs, franchising fees, and available cash necessary to open the business. In addition, how much in commission must you pay to the franchiser? Eight to fifteen percent is typical.
2. 2. Financing: What does the franchise company provide and is third-party financing allowed.
3. 3. Marketing and Promotion: Does the company provide significant coverage in these important areas? This is typically the impetus for franchising, to have a business that people know about.
4. 4. Training and ongoing support: You will need to learn from other franchises and from the company about these two very important areas.
5. 5. Saturation and competition: Is this a business popping up on every street corner or does the franchiser limit the competition? You want the latter, so you are not competing against people with same franchise, the same brands and the same support.
6. 6. Franchiser Relationship: Learn from franchise owners. Do they have a good rapport with the franchise company? Do the company reps answer their question quickly and solve their problems?
7. 7. Trends and popularity: "Health is in", so are "green "businesses and quick-service-service-oriented companies. Look at what items and services people are buying, and want today.
8. 8. The Bottom Line: Is the franchise company making money? Get sales figures, is it making money from its franchises or does it own some of the outlets? Look at companies that are close too 100 % franchises. This indicates that they are product-driven and not selling franchise just to make money.
9. Time and Commitment: You will put in long hours to build a business. However, businesses with inventories and lot of employees will mean a greater time commitment than a service business you can run more easily from home. How much time are you willing to put in? A bigger business can have a greater pay off. However, you may need to work harder.
10. The Fun Factor: Look for a business you will enjoy running. If you are not going to enjoy what you are doing, why not simply work for someone else? Can you find a franchise you feel good about?
Do not be caught up in the excitement of owning a business, and "get sold" a franchise. Take your time consider each of these factors and choose the home business franchise that is right for you.

References:Mintzer,R. Stephenson, J. (2008). Ultimate Home based Business Handbook: How to start, run and grow you own profitable business. Wisconsin: CWL Publishing Enterprises Inc.



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