What is a Brick-and-Mortar Franchise?

You're probably familiar with the typical retail businesses that fill every shopping mall or industrial area; a place where you can go, pick items you need, pay for them, and go, something like a supermarket – this is a brick-and-mortar business. It is a traditional street-side business that directly offers products and services to its customers in an office, store or any other premise that a business owns or rents.

Some of the pros and cons of this business model in franchising include:

Pros

Exposure to Clients: Perhaps the most apparent advantage of a brick-and-mortar setup is immediate exposure to numerous potential clients. The franchise's strategic location in a business center, signage, and overall marketing make it accessible to relatively more customers.

Professional Front: Having a traditional storefront brick-and-mortar franchise plays a critical role in enhancing your brand image. It creates an impression among prospective customers, suppliers, partners, creditors, and other key stakeholders that your business is credible, professional, and commercial.

Flexibility in Ownership and Management: This business model offers business owners an excellent opportunity to look for semi-passive or passive ownership. You do not necessarily have to lose your current job to run the business, but treat it as an investment. For example, you can hire a manager with tons of industry experience and expertise to run day-to-day operations.

Room for Growth: You can scale your business by getting a larger space or investing in multiple locations if you wish to expand. Doing so will make your business more efficient as you will enjoy the benefits of economies of scale in various aspects of the business, including marketing, staffing, inventory, etc.

What is a Home-Based Franchise?

A home-based franchise is a business predominantly run from the business owner's residence. For a franchise to be considered home-based, its operations must occur in the same dwelling where the owner lives. Since the emergence of the internet, allowing businesses to operate online, home-based franchises have reported rapid growth. The trend is not expected to change soon due to the business model's numerous benefits.

Pros

Convenience: The convenience of the business model is perhaps its most significant advantage. A home-based franchise is particularly suitable for parents who want to work and spend time with family. It allows you to multitask and meet both business and personal needs.

Low Startup Costs: Deciding to establish a business venture at your home allows you to cut the amount you need to get started. You do not have to go through the commitments of signing a lease, installing commercial systems, buying furniture, or acquiring computer systems.

Flexible Schedule: Depending on the nature of your business, you can work an appropriate schedule according to your availability, needs, and preferences. For instance, if you're a morning person, you can wake up early and take care of the business, and if you're an evening person, you can attend to the business when the family is asleep. You do not always have to be physically present in a store or office.

Tax Benefits: Operating a home-based business saves you money come tax time. For instance, the IRS will allow you to deduct part of your home's expenses against your business income, reducing the amount you owe the taxman. The expenses can include utilities, mortgage interest, property taxes, and repair and maintenance fees.

Lacks Professionalism: Something about an office setup says "professional" that a home business lacks. For example, a home-based franchise is not ideal if your business involves in-person dealings with the client and lacks a dedicated office space with a separate entrance. Apart from your clients needing a lot of convincing, you can also get into trouble with neighbors complaining about traffic and zoning laws.

Limited Growth: If your long-term goal is to remain a sole proprietor, there's no problem with a home-based franchise. However, if you have the vision to grow and expand your business, it may be difficult achieving this goal unless you leave your home.

Possible Prohibition: Local zoning laws and by-laws regulate what business you can and cannot start within your residence. Sometimes, the laws may permit the business, but the landlord or condo board may restrict home-based business activities if you're renting.

Overstepping Boundaries: Running a home-based business means juggling personal/family matters and business needs. The boundary between the two needs may be a blur. As a result, your family and friends may take you less seriously when working from home. You can get interrupted by your children in the middle of work.