How to Start a Home-Based Franchise

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Remember, the franchisor may have some questions for you, too. Dwain Wall, senior vice president and general manager of CruiseOne, helps franchisees like Santisteban get off the ground. He says CruiseOne's vetting process is rigorous, so before you meet with a franchisor, make sure you can explain your employment history. If you've changed jobs every few years, be able to explain why. A franchisor will only do business with you if they think you'll successfully bring business to them.

Dig Deeper: How to Read a Franchise Agreement


How to Start a Home-Based Franchise: Prepare Your Home

You may think the paper work is complete once the FDD is taken care of. It's not. Before you get started, you'll need to apply for a business license. Contact city hall or your county government to find out what type of license you'll need. They can redirect you to the proper agency if you require a state license. Snider says it's also a good idea to form a corporation and get a commercial general liability policy from your insurance company. "Most individual franchises are held by some type of corporation or limited liability company," he says. "If you own it outright, you have personal liability for anything that might go wrong with the business."

Visit the Secretary of State website for your state to find the guidelines you'll need to incorporate. The site should also provide information on how to draft articles of incorporation, which you'll need in addition to a name and an appointed director (that's you!).

Once that's complete, it's time to work on your home office. Set aside a room in your house or apartment that is solely dedicated to your business. Aside from having the basic telephone line and internet connection up and running, Santisteban says it's also helpful to get dressed every morning like you're going to work. It will keep you motivated and driven, even when business is slow at first.

Dig Deeper: How to Start a Home Office


How to Start a Home-Based Franchise: Getting Out of the House

Once your home office is set up, you will have to get out and pound the pavement to get the business off the ground. You can't rely solely on the brand name to get you clients. You've got to do most of your own marketing. As Santisteban says, "You can't just sit there and wait for the phone to ring because nobody knows you exist."

Finding a client base isn't as hard as it sounds, though. Start with friends and family and have your kitchen table pitch ready. Then decide what markets you want to do business with. If you're trying to work with a bank, contact the human resources department. If it's the pet owner demographic you're after, as was the case with Rudolph and Ramagnolo's business, visit local groomers. Another tip: host parties and events for your local community and enlist your social media network to spread the word.

Wall suggests setting up a table at trade shows, because it's a good way to meet other business owners, make contacts and build your list of clients.

"The best place to start is your local community," he says. "We encourage that guerilla marketing."

Be ready to discuss your business plan for the next few years. This means, of course, you will have to actually have a business plan, laying out the basics of your budget, funding, marketing strategies and equipment needs. Wall suggests getting in touch with other franchisees who can help you map this out.

"A lot of the learning goes one through franchisees talking to each other," Wall says, so ask your company if there are regional franchisee meetings you can attend.

Remember, once your business is set up, you're not alone. Most franchisors will hold webinars, conferences and offer intranet support networks for you to consult.

Dig Deeper: How to market through social media


How to Start a Home-Based Franchise: Resources

Wall says the No. 1 problem franchisees face is being dissatisfied with the solitary lifestyle they're suddenly thrust into. That's why it's crucial to maintain contact with your franchisor and get in touch with the nation-wide groups out there dedicated to both home businesses and franchisees. Check these sites out for tips and tricks:

The American Franchisee Association: Get access to legal assistance, as well as products and services.

The National Franchisee Association: Find advertising opportunities, compare business models and learn where local franchisee events are happening around the country.

Home Business Magazine: Read up on what other home business owners are doing to succeed.

Franchise Opportunities: Check out the Franchise Blog and Franchise buyers guide or consult this site to find out what franchises openings exist.

Dig Deeper: Lessons Learned at Franchise Boot Camp

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Issie Lapowsky

Issie Lapowsky is a reporter at Inc. magazine. She has covered lifestyle and entertainment for the New York Daily News, and her work has been published in BlackBook magazine and The Brooklyn Rail. She lives in Brooklyn, New York.

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