70 great franchises you can run from home; executive trades corporate security for franchise - Overview of a special section on franchises run from the home - a correction to this article appears in the Dec 1991 issue, in the Letters section, page 9 - Cover Story

Home Office Computing, Oct, 1991 by Barbara Stein

Our annual franchise listing is one of the most popular issues of the year. And it's no wonder, since the profile of today's typical service-based franchise buyer closely matches the profile of the typical HOME-OFFICE COMPUTING reader: well educated, with professional or managerial experience, good computer skills, and the desire to operate an independent business.

In addition, more and more franchises (nearly 13 percent) are starting their business from home. The percentage is even higher for home-personal-, and business-service franchises. Many franchisors now encourage franchisees to start from home, and they encourage or require the use of computers and specialized software to lower initial overhead and increase the chances of success.

In the following pages, you'll find the story of one executive who traded corporate security for a franchise opportunity, statistics outlining these new trends, and a listing of 70 ready-to-run businesses for sale. Happy hunting!

Accountants are known for being precise, conservative, and prudent. Stephen Finch of Ellisville, Missouri, fits the mold, but that's only half the story. Three years ago he traded a senior corporate-management position for self-employment when he bought a Comprehensive Business Services franchise--a company that provides monthly accounting, bookkeeping, business consultations, and tax services to small and midsize businesses.

"I realized during the 1980s that there was a lot less security in the corporation than there used to be and that the corporate climate had changed," explains Finch, who suffered through two company takeovers in a 10-year period at Western Publishing Company, where he was comptroller. "That led me to believe that despite my fine salary there was more security in betting on myself. Many employees make the mistake of not looking far enough down the road. You have to listen to the melody behind the numbers, to the tune they're singing." The tune Finch heard was "The Party's Over." Finch decided to capitalize on his 15 years of experience in management accounting and work for himself.

Thus, Finch, 46, joined the growing ranks of middle-aged corporate dropouts who are buying franchises. Nearly one-third of all new franchisees now fit that mold. "These so-called rat-race escapees represent a major new force in today's market," says Patrick J. Boroian, president of Francorp, the consulting firm that compiled the accompanying list of franchises. "Buying a franchise is an appealing idea to an educated middle manager who has been forced out of--or become dis-enchanted with-a large corporation and wants to be his or her own boss. Buying a franchise is an appealing way for an ambitious person without certain advantages, such as an Ivy League M.B.A., to make a mark in business."

MAKING THE DECISION

Finch's first instinct was to open a small, independent acounting practice to serve local business owners. But as he mulled over the idea, new options presented themselves, which raised additional questions. Should he go it alone, take on a partner, buy into a practice, buy an established practice, or purchase a franchise? Hedging his bets, he spent days preparing different business plans and making financial projections in order to make comparisons. In the end he chose buying a Comprehensive franchise over starting an independent business. Comprehensive's sales projections nearly matched his own, and the company offered support and training in areas where Finch lacked experience.

Comprehensive's impressive 25-year track record: initial and continuous training program; field, marketing, and sales support; and monthly financial data package were benefits Finch couldn't ignore. The $40,000 in start-up costs, which Finch withdrew from his savings, was allocated as follows: $17,500 for the license fee, covering the use of trademarks, logo, and Comprehensive methods; $10,000 for training and travel to Carlsbad, California, the company's headquarters, and site-location assistance, market research, supplies, and inventory; and $12,500 for equipment, including a hardware/software equipment package, modem, fax and answering machines, and even file cabinets. Aside from the start-up costs, Finch pays monthly royalty fees of 6 percent of gross revenues plus 2 percent for advertising.

"I don't mind paying the royalties. I have a network of accountants I can tap into, and I get good advertising support in the form of brochures and other materials. What I really needed was expertise in running an accounting business, which is different from being a good accountant," explains Finch, who today lists other franchises such as Jiffy Lube, Great Clips, and McDonald's as clients.

"When I wrote a check for $40,000 I understood that I was paying for ideas and guidance, that it was an investment in intellectual capital". But, he adds, "I didn't accept their system 100 percent. I wanted to mold the basics for the guy down the street, and that akes trial-and-error learning. I also held onto my own business plan, revising after I got started and seeing Comprehensive as support."