It’s important to be frugal when you’re starting out as an entrepreneur. Managing/running a home-based franchise business is definitely frugal when compared to the traditional brick & mortar franchises that require a huge upfront investment for buying the real estate.
So if you’re looking for a cheaper way to start a franchise, then choosing a home-based one is the way to go. Yes, running a franchise from your home office has its own set of challenges. But, it’s also less risky and more affordable to get started. Here are four initial steps that you need to take to get going with your own home-based franchise business:
#1: Look for Interesting Opportunity
The first and the obvious step is to do your research and search for franchise opportunities that look interesting to you. Find a niche that directly pertains to you – for example, if you are a tax expert, look for a tax franchise. If you love fashion, retail franchise opportunities are the way to go. Foodies are encouraged to open a franchise restaurant.
You’ll find that there are many websites and directories that list such opportunities. Browse through them and search for franchises that can started and run from home for cheap.
You can also choose to work with a franchise broker or consultant to find opportunities that are right for you. These are professionals who help you match with the most suitable home-based franchise business, which obviously helps you save a ton of time. In addition to actively searching for opportunities, you can also attend franchise trade shows to see if you come across something good.
#2: Get In Touch with Franchisers
By contacting the franchisers you shortlist, you take your search to the next level. Ask them for more information on the franchise and they will mail (or email) you informational and marketing materials. Your aim here is to learn as much as you can about the businesses so that you can pick out the most favorable opportunity.
Thanks to the power of the Internet, today you find a number of franchisors educating and informing their potential franchisees about the business using online presentations and webinars. As you get educated about each business, give some thought to how they operate and go for the one that looks the most viable.
#3: Apply for a Franchise
The next step is to apply for a franchise in order to request for Franchise Disclosure Document. Without a formal franchise application franchisors will not give you their FDD. Once the franchisor receives your application, you can request for the FDD to be sent to you.
This document basically contains 23 specific items that you as a franchisee should know. Along with the FDD you will find the following attached: a sample franchise agreement, a list of current/past franchisees and the financial statements.
#4: Do Your Due Diligence
Call up the current/former franchisees to not only learn and understand how the franchise operates but also to verify the information you received. Ask the right questions to the franchisees to get the right answers. Right from how much money they’re currently making (or made in the past) to how many business hours they’re putting in – ask everything.
Franchisees don’t have a problem talking to prospective franchisees, but see to it that you don’t take much of their time. Also, you don’t need them to share any of their personal info with you. In case they do share it, look at it as a favor.