Home Based Franchises: How Much Can You Make With a Home Based Franchise?

What Is a Home Based Franchise?
It should be obvious to everyone that a home based franchise is “a franchise business you operate from your home.”  But there is more to it than this simple explanation.  By combining the elements of working from home (no outside office expenses, no commuting time, flexible hours) and the benefits of running a franchise business (instantly recognizable brand, tried-and-true business plan, extensive training), people who purchase home based franchises join 500,000 other franchisees and gain a share of the $813 billion in annual sales, which represents 35 percent of all U.S. retail business.

Benefits of Owning a Home Based Franchise
Working from home is the dream of many prospective entrepreneurs.  It allows you to spend more time with your family and oftentimes arrange your business schedule around family type events that you would have otherwise missed by working in an office or a retail location.  Many franchisees begin on a part-time basis before gradually seeing their business grow into a full-time enterprise.  It is also a more personal way of operating, since you end up living with your franchise much more than the average small business owner.

Some Cautionary Considerations
Home based franchises, especially those that involve products or services delivered directly to the end user, are very intensively hands-on in their approach.  In most cases, you are the boss and also the employee.  It can be difficult to separate one’s personal life and business life, especially early in the process.  While a clear advantage to a home based franchise is its proximity, a disadvantage is that you’re never away from the office.

Almost Too Many Choices
The possibilities for home based franchises are almost endless, limited only by one’s imagination and pocketbook.  Some franchisees actually turn the home into a place of business – this is especially popular with daycare (both child and the elderly) and home-product sales – although one should always check out zoning laws before making this move.  Mobile operations include everything from home repair (painting, gutter cleaning, carpet cleaning, or landscaping) to computer services, auto repair, food catering, and about five thousand different kinds of consulting – ranging from selling marketing materials to small businesses to providing home decorating tips, and countless other ideas.

Path to Profitability
Hard numbers in the franchising industry are immensely difficult to track down.  Many corporations decline to publish sales figures of individual franchisees for fear they will be seen as guarantees rather than targets to reach.  One element of the home based franchise business that is not in dispute, however, involves startup costs.  Because you’re working from home, there is no need to spend money to rent a commercial property, or for costly remodeling.  Both franchise fees and ongoing royalty payments are typically much lower for home based franchises, primarily because corporate overhead is reduced as well.  For example, one industry expert cites $150,000 as the average price tag to start a franchise, while most home based franchises can begin operation for around $50,000 – and some may run as little as ten grand.  If your financial barrier to entry is lower than with another type of franchising opportunity, it follows that your break-even point will be lower as well.  Most home based franchises begin turning a modest profit during their second year of operation.

Is a Home Based Franchise In Your Future?
Home based franchises aren’t for everyone, just as the franchising concept takes a certain mindset to succeed.  You should have a high level of self motivation and the ability to work on your own, even if you employ other people.  A willingness to follow the franchisor’s plan to the letter is another important element, as is recognizing that you’ll be putting in some pretty long hours to get your company off the ground and into the black.

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