Before you buy any home-based franchise, get full disclosure. Meaning, would-be ranchisees should thoroughly read the Franchise Disclosure Document, or FDD, which is a document that contains information franchisors must provide to franchisees by law, as regulated by the Federal Trade Commission. Of the 23 items in the FDD, pay careful attention to the earnings claim (which franchisors don’t have to provide, but that lack of disclosure may raise a red flag). What is the initial investment plus franchise fees? What are both franchisor’s and the franchisee’s obligations? Does the franchisor offer financing and/or marketing assistance? Also, look at the FDD to find out the number of franchise units, closures, and current and former franchisee names and contact information. Talk to other franchisees to solicit their feedback. To learn more, contact the International Franchise Association and the American Franchise Association.
B.E Editor’s Choice
Here are five franchises that have relatively low costs, resources, and a
high participation rate of minority owners:
- Always Best Care Senior Services (www.alwaysbestcare.com) provides
non-medical in-home care, assisted living placement services, and skilled home
health care. Startup costs: $39,500 to $90,700.
- CruiseOne (www.cruiseone.com), as part of World Travel Holdings, is the world’s largest distributor of cruise vacations with more than 700 franchise units. Startup costs: $495 to $9,800.
- JAN-PRO Cleaning Systems (www.jan-pro.com) is an international commercial cleaning and janitorial services franchise with more 10,000 units. Startup costs: $950 to $36,500.
- Tutor Doctor (www.tutordoctor.com) provides one-on-one tutoring and supplementary educational support programs to students from kindergartners to adults. Startup costs: $39,700 to $127,000.
- WSI Internet (www.wsicorporate.com) is a leader in providing consulting services to businesses including online marketing strategies, Web design, and Web development. Startup costs: $49,000.