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“I’ll take one pound of ham and one – no make that two – pounds of thinly shaved smoked turkey,” said a slim elderly woman who was little higher than the full cart of groceries she had pushed over to the meat counter.

Sam sighed as he picked up the remaining pair of latex gloves. It was a warm, busy day. And he was relieved that Mrs. Habersham was his last customer. Usually he didn’t mind filling in after butchering for the day, but today seemed so long and boring.

One his way home, Sam began to think over his dilemma. What could he do to make more money? What skills did he possess other than butchering?

Stopping at the last light, his eyes caught the scene at the corner sub shop. “Look at that woman’s carryout bag – must be dinner for the family,” he thought. “And there’s an Akela and his Pack of Scouts with their dinner.”

Scrutinizing the place, Sam thought, “It’s fairly well kept, and business is solid. Moms, dads, kids, and managers – all sorts of people – bustle outside with their dinner. They are satisfied. The owner is, too, and boy do I wish I were the owner!”

Maybe Sam’s dream is impractical, but he has it, nonetheless, and he’s probably not alone. How about you? Do you ever think of owning your own chain restaurant, car shop, or retail store?

In order to know whether or not franchising is for you, ask some of the owners of your local franchises what the dislike. (Bring a notepad and marker.) To help you get started, here are a few cons as compared to an average home business.

First, let’s compare standard investment requirements. Franchise investments usually run anywhere between $60,000 and $500,000. This includes basic things like your land, building, machinery, and office equipment. That’s a lot of capital, especially in today’s financially turbulent times.

A small but solid home-based business will cost you considerably less because you won’t have the added expenses of land and building. Start-up cost is typically between $1,500 and $3,000.

Second, let’s compare standard operating expenses. In a franchise you have to pay employee payroll, payroll tax, workers compensation, insurance/inventory, liability insurance, utilities, freight/postage, ad valorem tax, licenses/permits, advertising, telephone, franchise fees, depreciation, and sales tax just to keep the lights on.

For a home-based business, your expenditures are reduced but still existent. You will usually have to pay for liability insurance, utilities, telephone, advertising, and depreciation (e.g., office equipment).

Third, here are more things to keep in mind: Your gross franchising profit generally averages 30-40% with a net profit of around 5-10%. You will work at least 50 hours per week-closer to 70 and maybe even more. You shoulder 100% of the risk factor and leverage none of the compensation from others-that’s what you’re doing for your chain store. You will have tax advantages, but these will be offset by your unchangeable time commitment, need to supply products, and confinement to a fixed location as well as limited income potential which averages out to $35-85K.

With a good home biz, you can make more gross and net profits working a flexible schedule and leverage your income to unlimited potential.

The light turns green. As Sam pushes the accelerator, what would you tell Sam to do?

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