My choice of franchise would be in Home Care for the sick and elderly. The reason I picked this franchise over the others is because it has been and will be in demand, especially since we have an ever old growing population. According to a statistic about the elderly population, the number of baby boomers that reaches the age of 65 years will explode to 88 million by 2050, which doubled from 40 million only in 2010.
The home care market generates over $75 billion annually and it was called the fastest growing sector in the health care industry by the Department of Labor.
The startup costs can vary from low $60K to $100K and the monthly (or royalty) fees are $300/mo minimum for the 1st 2 years and then $1,800/mo minimum after the 1st 2 years.
The franchisor requires that the franchisee’s business be directly supervised on-premises by a manager who has been approved by the franchisor and has successfully completed the training program. The initial franchise term is 10 years and if the franchisee satisfies the required pre-conditions to renewal, HHFS (Home Helpers Franchising Systems) may obtain the right to obtain two additional 10-year terms. Also, the franchisee, may not compete with, or own interest in, any business that competes with, during the franchise agreement term, or within 15 miles of the franchise territory or any other franchisee territory’s for two years after the agreement is terminated or expired.
The franchise will provide initial training for up to two people, one of which must be the person responsible for the general management of the franchised business. After opening, HHFS will provide the franchisee with assistance via telephone, electronic mail, office visits and web-based programs.
There are obviously pros and cons to purchasing a franchise.
Some of the pros are that when you purchase a franchise, you hit the ground running with it, because it has an established system for operating the business and generating profits, and this can be beneficial if sales and marketing is not your strongest suit. Good franchisors provide good training to franchisees, in which a new business owner can learn about pre-opening procedures, daily operations, marketing strategies, the use of specialized software and more. The collective buying power of a franchise can be leveraged to lower costs for inventory and equipment purchases. Independent businesses have less bargaining power with suppliers.
The cons of buying a franchise are: less freedom, which means that as a franchisee you are required to share financial information and conform to already established operating procedures and follow the rules of the franchisor. Then, there are the royalty payments that are due every year to the franchiser for support in operations and advertising. Start-up costs can be another reason not to purchase a franchise, which quickly rules out most potential business owners that do not have the necessary capital. A few more cons to purchasing franchises are: limited creativity and flexibility, you are trapped in long-term contracts, dependent of the franchisor’s success, and last but not least, risk, because in the end no system or franchisor can guarantee you success and high profits.
Lastly, before one considers purchasing expensive franchises, one should do enough research about the company, brand, franchisor’s support, initial fees and recurring fees, history and reputation of the company, meet with old and existing franchisees to find out about the business, do online research to read opinions and statistics about the industry and type of business.
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