Franchise Opportunities
Opening a home-based service franchise (example scenario)
An illustrative pathway, not a listing or recommendation of any brand: buy the right to run a franchised service business (such as cleaning, lawn care or handyman work) from home or a vehicle instead of a storefront. You get a brand and a system, but you pay fees whether or not you profit. Every franchisor must give you a Franchise Disclosure Document (FDD) that lists the actual costs.
Example scenario. This shows how the costs and steps of this path typically fit together. It is not a business for sale, and nothing here means financing is available to you.
Cash to start (upfront + working capital)
Not verified
Ongoing costs per month
Not verified
Time
Mostly full-time, ~30+ hrs/week
What it costs to start
Amounts are itemized estimates. “Not verified” means we don’t have a defensible figure; it is not $0.
| Item | Type | Estimate |
|---|---|---|
| Initial franchise fee Disclosed in FDD Item 5 and differs by franchisor. The FTC’s consumer guide says initial franchise fees typically start in the tens of thousands of dollars and may be non-refundable. Read the actual Item 5 rather than relying on an advertised "low cost". | Initial setup | Not verified |
| Travel and lodging for required training Usually shown in Item 7; depends on where training is held and for how long. | Initial setup | Not verified |
| Equipment, starter supplies and vehicle wrap Listed line by line in FDD Item 7 (estimated initial investment). Check which items you must buy from the franchisor or approved suppliers. | Equipment | Not verified |
| Attorney and accountant review of the FDD and franchise agreement Get a quote; the FTC recommends talking to both before you sign. | Deposits and transaction costs | Not verified |
| Working capital for the opening months Item 7 usually includes an "additional funds" line for an initial period. The FTC suggests also estimating first-year operating costs and your own living expenses. | Working capital | Not verified |
| Upfront costs (required) | Not verified | |
| Working capital | Not verified |
Ongoing costs
| Item | Per month |
|---|---|
| Royalty Usually a percentage of gross revenue, sometimes with a minimum, disclosed in FDD Items 5 and 6. Typically owed even when you are losing money. | Not verified |
| Advertising or brand fund contribution Usually a percentage of revenue, disclosed in FDD Item 6. Part may go to national advertising rather than your territory. | Not verified |
| Required software, technology or call-center fees Check Item 6 for every recurring fee. | Not verified |
| Insurance, fuel and supplies | Not verified |
Financing
Some franchisors offer financing for part of the initial fee, and the FDD discloses it in Item 10. Do not assume any financing is available.
What you need
- Equipment package specified by the franchisor
- Vehicle (often wrapped with branding)
- Phone and scheduling software
- Helpful: Franchisor approval — Franchisors screen applicants, often including net worth and liquid capital minimums. Approval is not guaranteed.
- Helpful: Driver’s license and vehicle — Most home-based service franchises require travel to customers.
Licensing: You still need any local business license, insurance and trade license your service requires; the franchise does not provide those. Some states also require franchisors to register before selling franchises there.
Skills that help: Sales, Customer service, Operations and management. People commonly start without specialized skills.
Time: Many franchisors expect owner involvement, and some prohibit running the franchise part-time. Check the franchise agreement.
Typical customer: Local households or businesses in your assigned territory
How it makes money: Service fees set within the franchisor’s system; you pay ongoing royalties and usually an advertising fund contribution
Business model: Franchise, Local service business
Risks and downsides
- Royalties and advertising fees are owed on revenue, not profit, so a slow start can mean losses while fees continue.
- Advertised "low-cost" totals may leave out working capital, vehicle costs or your living expenses.
- High owner turnover in a system is a warning sign; FDD Item 20 shows closures and transfers.
- Territory rights may be narrow, and the franchisor may sell nearby or online.
- The agreement may limit your ability to sell or exit and include a non-compete after you leave.
- Any earnings figures outside FDD Item 19 should not be relied on.
Your first step
Request the FDDs from two home-based service franchisors and write down, for each, the Item 7 total, the Item 6 royalty and ad fees, and the number of closures in Item 20.
Then
- Call at least five current and former franchisees listed in Item 20 and ask what they actually spent and earned.
- Have a franchise attorney review the franchise agreement, especially territory, renewal, transfer and termination terms.
- Have an accountant review the franchisor’s audited financial statements in Item 21.
- Compare the full cost against starting the same service independently.
Sources and review
- A Consumer’s Guide to Buying a Franchise (Federal Trade Commission). Supports: What the Franchise Disclosure Document covers and questions to ask before buying.
- Franchise Fundamentals: Taking a deep dive into the Franchise Disclosure Document (Federal Trade Commission). Supports: FDD Items 5-7 cover startup and ongoing costs including royalties and advertising fees; Item 19 holds financial performance claims; Item 20 lists current and former franchisees.
- A Consumer’s Guide to Buying a Franchise (full text) (Federal Trade Commission). Supports: Royalties are typically a percentage of gross income owed even when losing money; initial franchise fees typically start in the tens of thousands of dollars; advice to consult a lawyer and accountant.
- Business guide (licenses and permits) (U.S. Small Business Administration). Supports: Licensing and permit requirements vary by city, county and state.
Last reviewed October 18, 2026. Method: Itemized editorial estimate built from typical starter equipment and setup items. Cited sources support the requirements and context, not each dollar figure. Items we could not price defensibly are marked "Not verified" instead of $0. Local prices vary.
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