DeBolt. “It’s on everyone’s radar right now.”
Austin Monroe, 45, was one home-based franchisee that took advantage of this sweet spot in the services sector. He is the owner of a pair of Lawn Doctor franchises in Stone Mountain and Henry County, which are both suburbs of Atlanta. And while cutting lawns, his business is raking in the green — to the tune of approximately $100,000 for 2001. The former electrical engineer got into the business when he tired of working in a corporate environment and attended a franchise show in Atlanta in 1990.
“I spoke with [representatives from Lawn Doctor] at the show and I did a little research on my own,” he recalls. After forking over some $25,000 for the franchise (including marketing material, lawn care equipment, and a lease on a commercial van), by 1991, Monroe was in business. “I worked the Stone Mountain area for about six or seven years and then I got a second franchise at Henry County in 1998 for only $10,000 since I already had the vehicle and equipment.”
What makes such home-based enterprises like Monroe’s so appealing is the cost of entry. According to the IFA, roughly 72% of franchises require an initial investment of up to $250,000, while most home-based franchises max out at an initial investment of $50,000 to $60,000. “On the plus side, they’re typically a lower investment than a franchise that you have to operate from a storefront or office building,” says DeBolt. “Obviously because of the overhead it’s much easier to get into. You don’t have a lot of equipment and all the things that go along with that.”
FREEDOM AND FLEXIBILITY
No doubt that home-based franchises have their allure. For one, entrepreneurs have more control over their time. Then there’s the general appeal of franchises — buying into a business with a proven track record, the benefits of regional or national advertising campaigns from the franchisor, as well as training and other operations support programs.
Be it home-based or not, don’t even think of purchasing a franchise without conducting due diligence. Make sure you review the company’s Uniform Franchise Offering Circular (UFOC), a sort of disclosure statement for potential franchisees outlining all aspects of the investment opportunity. Also, talk to current and former franchisees listed in the UFOC, and visit the franchisor’s headquarters to get a sense of its corporate culture, support system, and its efforts to reach out to minorities to become potential franchise owners.
DeBolt also cautions that franchisees should be aware of some of the pitfalls of running a business out of their home. “The minuses are that working out of your home may lack some of the discipline necessary to really apply yourself to building a strong, solid business,” he warns. “And a lot of people go to work and just the interaction with people in their office gives them a certain level of life sustenance to get them through the day. Here you have to supply your own energy.”
While Monroe says he may someday sell his Lawn Doctor