Why a Home-Based Franchise?
Prospects looking at home-based opportunities need to consider a number of advantages and disadvantages. One should not only look at the investment cost as a basis for making a decision. These type of opportunities should be assessed as per the same criteria as other franchise industries. While this category does offer the least amount of franchise choices, a home-based franchise can be just as exciting and rewarding as any dynamic retail or fast-food enterprise.The Advantages
1) Low Financial Investment
Total investment requirements (on average) tend to range between $15,000 - $30,000. You can even find some under $10,000. But, don’t be surprised of the odd opportunity hovering in the $70,000 - $90,000 range.2) Limited Overhead Expenses
A home-based business should require you to keep a home office, using a computer, telephone, fax, and Internet as your basic operating tools. There may be some payroll depending if you decide to maintain an employee or two.3) Little or No Inventory/Supplies to Stock
This reduces or eliminates the responsibility of maintaining an inventory system that can take up a lot of operational time. If you are required to keep an inventory of supplies, they typically should not take up much room in your household.4) Lifestyle
Some home-based businesses can be launched on a part-time basis which provides convenient, lifestyle flexibility for the franchisee. Since most franchises do not enforce a sales quota system, franchisees can run their business at during the times that are most convenient, rather than a strict “retail-style” operational schedule.The Disadvantages
1) Staggered Revenue Potential
Unlike retail or food-based franchises, home-based franchises rarely see the kind of revenue that their large-scale counterparts generate. The lack of walk-by traffic limits revenue potential significantly since these franchises rely on a loyal client base and return business.2) Limited Exposure
By municipal law, home-based franchises are not permitted to maintain “street signage” on residential properties (unless the home has been zoned for commercial use). Physical exposure must rely on the franchisee’s ability to market the business via advertising outlets such as print advertising, radio, and related media.3) National Advertising
It is unlikely that franchisors of home-based franchise systems maintain a strong and effective national advertising campaign to promote the brand. The marketability of a home-based franchise is quite often left to the franchisee whose territory may be limited to the city or town of residence.4) Isolated Business Practice
A home-based franchisee must be comfortable in being physically independent from the business community which can limit networking opportunities. Without an active marketing campaign, a franchisee can lose potential business to a competitor who maintains a street-front or retail location