Has Anyone Here Ever Purchased (or Considered Purchasing) a Franchise?

[MarianJack]

I'm currently looking at 3 types of franchise opportunities. I live in Augusta, Maine, which is the state capitol but still a fairly rural area.

The types of franchises I'm investigating are for providing in-home assistance/care for seniors who want to maintain their independence but may need a bit of help with some things (this is close to my heart. My mother passed on 5 years ago this month. She was determined to maintain her independence and her own apartment right up to the end. Fortunately, she was able to do just that!), in-home tutoring for kids (but ONLY with the parents or another care-taker present) and cleaning services.

These are all things that I see as potentially economy proof (except for possibly, and unfortunately, the in-home tutoring). All of those I'm investigating have a comparatively low start up/purchase cost as I haven't looked at anything over $20,000.

I think that the "Name brand" and some of the proposed perks (like training, advertising help, merchandising and support) that the franchises offer can, after CONSIDERABLE investigation of their veracity, be worth the investment. My wife (who has this annoying habit of always, and I mean ALWAYS, being right) thinks we can do something like this completely on our own.

To further clarify, I am not interested in any Multi-Level Marketing opportunity. I don't have anything against them (except for the right wing dipsticks @ amway/quixtar), I just don't want to have to be constantly recruiting people and rallying them to conventions & meetings hundreds of miles away.

Has anyone either gone down the franchise road or at least investigated it? Your feedback and the benefit of your experiences would be greatly appreciated. Thank you in advance.

PEACE!

[ret5hd]

1. I agree with your wife for this type of business...

and if you give your wife this one, you can take one later. i promise. maybe. but not really.

[MarianJack]

3. Thank You, ret5hd.

She is amazing for her gift of always being right. The only time we went to a casino, after an hour or so I gave her the money I'd brought to gamble with and we came away winners!

She is also fair enough that she would let me take one later too!

PEACE!

[Ineeda]

2. Sorry this won't be much help, but

my husband and I (superficially) looked into a Dunkin Donuts franchise many years ago. The closest one was twenty miles away and hubby was addicted. The cost, even fifteen or twenty years ago, was over $130K. Too rich for our blood, by a long shot! To answer your basic question, though, there are lots of independent mom and pop businesses here. I live in a largely senior/resort community and loads of folks need handymen/women, pet sitters, lawn and pool care, in-home health, housecleaning, taxi or errand-running services. Start up for most of these would be low, and word-of-mouth is the best advertising. I agree with your wife for these kinds of things. No franchise needed. I have neighbors who actually hire people to do basic things like hanging pictures, and almost everyone has a cleaning service, especially for things like floors and windows. (Wish I could afford it, as I'm a lousy, lazy house cleaner.) Good luck!

[MarianJack]

4. Thank you, Ineeda!

What you've said is almost exactly what my wife said. There are also several elderly housing apartment complexes in our area. I'm thinking, as is my wife, that putting an ad in the local papers or Uncle Henry's ( a local guide for people to buy and sell goods & services) and visiting some of the administrators of these buildings are a good way to start.

My wife does have an amazing ability to always be right. I, however, have the final say in all discussions. That say is usually either "yes honey" or "your always right honey". She rarely agrues with my final say! I wonder why ? :shrug:

PEACE!

[Scuba]

5. I'm with your wife...

...by taking care of the little things (professional image, well-trained staff, etc.) you can be just as successful as any franchise without a) paying them a dime, and b) having to bend to their will.


I don't believe this would hold in every industry, but with what you're trying to do, customer service, word-of-mouth good will and homegrown integrity may trump anything the franchiser can offer.





Now, if I could just get back to Shamut and the Kennebeck. Those trout keep calling my name.

[MarianJack]

13. So THAT'S What the Fish Are Saying!

Thank you for the feedback, Scuba:patriot:

PEACE!

[pipoman]

6. A few considerations

Home health care is pretty heavily regulated in most states. My state requires home health agencies be directly supervised by a registered nurse. This is very expensive and the reason most home health agencies are owned by nurses. In addition to the regulation there is the billing. Medicare and insurance companies are very particular about how they are billed and by whom.

Home schooling is another area of regulation. Home schooling can usually be done by a parent but outsiders trying to teach usually must have teaching certificates. Most franchises in this field I have seen are actually selling a curriculum, not actually teaching, just assisting the parents.

I would suggest looking into licensing and qualifications for these types of businesses before jumping in. As with any regulated profession, there may be criminal or civil penalties for engaging in these businesses without being properly licensed.

[MarianJack]

14. Any Move would be DEEPLY Investigated and researched.

Perhaps I didn't clarify, but I was referring to non-medical home help such as cleaning, cooking, rides to shopping and doctors and some companionship.

Thank you for your feedback, pipoman. :patriot:

PEACE!

[OneGrassRoot]

7. I second what others have already shared....

No doubt you are going to investigate licensing requirements, as two of the three (and perhaps all) no doubt have rather stringent requirements and regulations and may impact your decision.

As for franchises for which that isn't as much of a concern, I'm starting to think that as people focus more and more on "Mom and Pop" ventures again -- Main Street -- an identifiable "big" name on a national or regional level may become a hindrance rather than a help.

I don't know, but I think that may become the case with progressives, at least. It's certainly a marketing approach to be employed, imho (the local, mom and pop thing, that is).

A good reputation locally, built from the ground up, is like gold for the types of things you're looking at.

Best of luck to you both!

:hi:

[MarianJack]

15. Thank You for the Feedback.

:patriot:

PEACE!

[mmonk]

8. Yes but understand all business decisions are not yours

and you pay them to operate within their system.

[MarianJack]

16. I'm Considering this also.

Especially with a financed investment.

Without a franchise fee, the only risk is ours.

PEACE!

[Recursion]

20. Yeah, having a "boss" even if he/she isn't called that...

...kind of removes some of the incentive to run a business, for me.

[DURHAM D]

9. I agree with your wife.

I looked into a home assistance program just a little bit at my sister's request. I could not figure out what the franchise got ya - especially in a small/mid-sized market/town. Much of what they offered was fluffy promotional material on how to pull the heart strings of seniors and assure the children their life doesn't need to change.

However, given the high liability in that type of work I assumed that they had fabulous contracts that had been repeatedly tweaked over time as experience showed them more ways a provider needs to be protected. An attorney experienced in the home care business (as provider or consumer) should be able to draw up your contracts.

[MarianJack]

18. The More I Investigate,...

...the more I do, too.

As I said before, she does have this habit of always being right!

PEACE!

[melm00se]

10. irrespective of the type of franchise

you will want to get a look at the books of a current franchisee and not just the "results not typical" ones that the company will provide to you. They have a name, a website and probably "find an office near you" search. use it and cultivate a relationship with someone who has been doing this for a little while.

At the bare minimum you need to:

- determine the addressable market
- Determine how you are going to attack that market
- Determine the fee schedule you can/will be charging
- If your business will be relying on medicare/medicaid reimbursement, you will want to get a copy of the reimbursement schedule for dollar amounts and how long it takes to get the cash to start flowing and make sure that you have enough operating capital to get you thru that period times two or three. I know that medicare/medicaid can take 90-180 days before the payments start up and that is a long time to carry your costs, especially if you have no other source(s) of income.

now calculate your costs from your personnel costs to insurance (all forms) to the costs of carrying money until the reimbursements kick in to the costs to enter and penetrate your market and others.

Then, do the math: can this business be profitable? how long until you break even and actually start turning a net profit? is there a better investment for your start up capital?

I might suggest reaching out to your local university and see if there is a program within their business school where you can get a pair of business trained eyes to look over your idea/calculations/business plan, poke holes in it and apply the test of reasonableness to it.

Best of luck

[MarianJack]

21. Thanks for the feedback!

:patriot:

PEACE!

[no_hypocrisy]

11. See if you can read a copy of the proposed franchise agreement before you invest.

One of our clients had trouble with McDonalds as they took away his three franchises based on the contract. Because of a trifecta (major roads being repaired with detour in front of his shop, 70% of summer with bad weather, and losing money with a mandated McDonald's promotion of Big Macs at $1.00), he didn't bring in the profit as necessitated in the Agreement. And he had no money to pay Sales Tax. He ended up filing for bankruptcy.

If you get a proposed Agreement, take it to an attorney who specializes in franchise law and go over it with a fine-tooth comb.

[MarianJack]

27. Any Agreement...

...would get the "fine tooth comb" treatment.

It would be from both my wife and I and an attorney. We're smart enough to know what we DON'T know.

PEACE!

[Bragi]

12. Start-up costs are but one consideration

I've checked out franchises from time to time, but never made the leap.

I think the most expensive part of any franchise agreement has to do less with start-up costs, and more with sending them a % of your revenue forever. That could get real costly.

Another thing to watch for are any non-compete clauses in the agreement that might restrict your future ability to get out of your franchise and to set up an independent business in the same field.

[MarianJack]

26. Thank You, Bragi.

The fees are a consideration.

PEACE!

[NightWatcher]

17. we used to own an office cleaning business. you dont need to be a franchisee

just start small with one or two nightly businesses or homes and let it grow slwly from there. With franchises you kick back a lot of money just for use of the name. They'll try to guarantee that you'll have business, but they make you sign too many contracts and the business will never truly be your own.

[MarianJack]

25. Thank you for the info.

What happened to your business if I may ask?

PEACE!

[NightWatcher]

28. we moved on and sold it to a cousin who kept the name and clients for ten years

the late nights were rough for a working mom when I went to college

[Recursion]

19. There are some OK franchise opportunities, but be careful

With some companies the franchisee gets all of the risk but none of the profit -- do your research.

[MarianJack]

24. INTENSIVE Research!

Thanks!

PEACE!

[Vinca]

22. For this type of business and considering your location,

I'd listen to your wife. The Augusta area is small enough so you could blanket the place with advertising of one form or another and if you do a good job your business will come by word of mouth. Good luck and be careful who you recruit to work for you. We had a REALLY bad experience with caregivers for a wealthy neighbor. They viewed his property as a vacation retreat and had parties and friends over and ran their ATVs all over his property (and the elderly man and his wife had been rabid nature lovers). It was a nightmare.

[MarianJack]

23. Listning to my wife...

...has never led me wrong.

It's that always right thing again!

PEACE!