If your desk can be found in your den rather than an office building, you’re not alone. In 1994, 37 million people worked at home, and more than 60 million will by the end of this year, according to IDC/Link Resources, a New York research firm. Moreover, 8,000 home-based businesses are started every day.
The work-at-home trend–spurred largely by technology, corporate downsizing, the hassles of commuting, the desire to spend more time with family and the transition to a service-oriented economy–has taken off in the franchising world, which has an estimated 10,000-plus home-based franchisees.
Take Jonathan and Beverly Chandler of Memphis, Tennessee. They knew more than a little about accounting before starting their Padgett Business Services franchise nearly two years ago. Before moving to Memphis to care for Jonathan’s elderly parents, they had run an accounting business out of their home in Alabama for eight years. Because the move was sudden, they didn’t have time to build their business back up nor the marketing expertise to research a new market, so they decided to open a franchise.
To finance the $35,000 start-up costs for the Padgett franchise, they obtained a loan from an independent banker after conventional banks turned them down–even though they had good credit–because they had quit their jobs. The business has been profitable ever since.
This year, BLACK ENTERPRISE has provided a comprehensive list of franchise companies that offer some of the best home-based opportunities for African American business owners. Our 15 Franchises You Can Run From Home list is based on a national survey of franchisors conducted by BE research. In making our selections, we considered such criteria as the number of black-owned units, franchise fees, start-up costs, average sales per unit and support services.
According to the International Franchise Association in Washington, D.C., there are about 600,000 franchised small businesses across the country, which account for $1 trillion in sales, totaling about half of all U.S. retail sales.
Frandata Corp., a franchise research firm based in Washington, D.C., reports that about 10% of all franchises can be run from home. According to FranCorp, a franchise consulting firm in Olympia Fields, Illinois, home-based franchises earned an average of $50,000 a year in 1992 with 20% reporting sales over $70,000. Residential and commercial cleaning firms account for about one-quarter of all home-based franchises. Other lucrative franchises run from home include home restoration and home inspection service, computer training and consulting, tax services, payroll services, tutoring and pest control.
“Business-to-business services are very hot, as well as residential cleaning anti other services that people don’t have the time to do anymore,” explains Don DeBolt, president of the International Franchise Association. “Franchising has given people the flexibility of choices [to work at home, for example] and so many different options of businesses to start–some involving modest costs, and others costing hundreds of thousands of dollars.”
When you buy a franchise, essentially you pay the franchisor for the right to use its trademark, name, products and business format in exchange for an initial fee and ongoing royalties.