Hometowntimes.com is an affordable internet and home-based business providing local news, information, events, and advertising to communities via a turn-key successful website and business/marketing model.

The following is a reprint of an article by BRIDGET CAREY for The Miami Herald, 1/25/2010

After being unemployed for a year, Pauline Hamian ditched the résumé and bought herself a job.

The former Burger King employee had no luck finding a job after being part of a corporate restructuring in 2008. While at an outplacement center, she stumbled on a webinar about franchising.

``I felt I had to do something,'' Hamian said. ``It provided an opportunity for me to do something I've never done before and never really envisioned myself doing.''

With the help of a franchise broker, she decided to invest in ShelfGenie -- a company that installs sliding shelves for kitchen and bathroom cabinets. She didn't need to buy a storefront -- it all can be done from home. There were no fixed costs and her two part-time employees work on commission.

Jobs are still scarce, so the unemployed are reinventing themselves and becoming the majority of new franchise owners, industry sources say. The troubles in commercial real estate are making it easier by driving some landlords to negotiate -- sometimes offering several months' free rent or paying for remodeling.

While banks continue their tight grip on lending, some franchisors are seeing a dip in investors and are responding by lowering fees and offering internal financing deals. But without a loan, a home-based franchise like ShelfGenie becomes an affordable option for those wanting a fresh start on their careers. Areas that are expected to increase in popularity: quick-service restaurants, real estate, senior care, eco-friendly businesses, and health.

``When the economy slows, people think opportunities become harder to find,'' said Jason Mattes, a franchise development advisor in Coral Gables. ``If you have an entrepreneurial spirit, now could be the best time.''

He's currently director of franchise development at Cruise Planners, where the fee is about $10,000 to start the home-based travel agency. Cruise Planners has added 200 new franchises in 2009, with 52 new units in Florida.

``I think people just aren't aware of all the opportunities out there,'' Mattes said. ``They think of a Subway shop or a hamburger joint, so they feel it's not a path to look at because it's just too expensive.''

The lack of funds is what sent Hamian to the services sector. After being denied a business loan, she financed her future career with a home equity loan. The fee to cover one territory -- that's 250,000 households -- was $40,000. But when you add up the costs of home show fees and product materials, she invested about $65,000.

``It was the biggest check I've ever written in my life,'' Hamian said.

MatchPoint franchise consultant Jim Sebastiano is advising people without a nest egg to head for home-based businesses because of the credit crunch. He has seen investors use their 401(k)s or IRAs to help finance stores.

``I get a lot of calls from people that either lost their job already, or they're scared to death,'' Sebastiano said. When you're in a service industry, ``you're out there promoting the business more and the costs are substantially less,'' Sebastiano said.

There are more than 3,500 different franchises available, but Sebastiano found most people he speaks to can only name 15 from memory.

``Don't pooh-pooh any business until you do a little bit of research,'' Sebastiano advises. ``At least know what you said `no' to.''

West Palm Beach resident Lisa Simpson, 47, reached out to a consultant after it became ``mind-boggling'' trying to sort through every option.

Simpson worked in banking for 26 years, and when her bank was recently acquired, she took a severance package to jump-start her dream of running a business. She filled out a franchise personality profile questionnaire to narrow her search. Her result: the painting business.

``I said, `Painting? Really?' But the more I started looking into it, they had 300 franchises doing this, and they had a lot of training and support,'' Simpson said.

After paying $50,000 for the franchisee fee, and another $20,000 toward direct mail, software and putting a logo on her truck, she now runs CertaPro Painters with her husband. It all came from her personal savings and that severance package -- and she's hoping she doesn't have to dip into her home equity.

``Normally franchise businesses do quite well during recessions,'' said International Franchise Association spokeswoman Alisa Harrison. ``If people are laid off or they are mid-career, they decide they want to have a little bit more control and go into business for themselves.

``This time it's different because of the available financing,'' Harrison said. ``We actually ended up a little bit better in 2009 than what our forecast said, but it was still down because of financing.''

Even experienced franchisees are having trouble getting loans. Raj Patel and his partner Rudy Puig have owned five Cold Stone Creamery shops in South Florida -- opening their first in 2004 -- and invested in a Panchero's Mexican Grill right before the economy went sour. Their Panchero's in Miami opened in January, but they had no loans to help with the costs.

``You could click your finger and say `I need a loan' and pretty much it would happen. Now it's impossible,'' Patel said. ``I approached probably at least five to six banks, and none of them wanted to do it.''

Franchises began to fizzle in 2008, after growing by more than 40 percent since 2001. The IFA predicts 2 percent growth for 2010. Hotels are the only group that will continue to lag, but the categories of quick service restaurants and real estate are supposed to see the biggest growth.

Other hot growth areas getting attention: anything dealing with senior care, being green, and health.

SMALL INDULGENCES

Robyn Vescovi believes a troubled economy won't keep people from indulging in the healthy frozen yogurt at Tasti D-Lite. She's about a month away from opening her first shop in Boynton Beach. By hunting for deals, she was able to save money on construction costs as well as snag a prime location in a new shopping plaza that's hurting for tenants.

``They've given me the front building,'' Vescovi said. ``They've given me main street access on a main road for what some plazas will charge me to be in the back.''

Pizza Fusion, a Fort Lauderdale-based franchise that markets itself as being earth friendly and organic, has 21 units in 15 states and is expanding to 10 more stores in South Florida. Boca Raton resident Larry Feldman is a development agent for Pizza Fusion and Subway, and he has taken a creative approach to dealing with landlords, such as asking for heating and plumbing fixtures to be taken care of if they sign.

``Landlords have been cocky for a long time,'' Feldman said. ``When I look at locations, they are willing to divide spaces, they are willing to do deals that haven't been done before -- even with construction and contractors.''

MAKING DEALS

Development agents like Feldman are hired by franchisors to help prospective investors get set up and find a good location -- as well as help with marketing and inspections. They get paid based on how well the franchisees do. These days, the pressure is on for the agents to make deals with landlords before they even have buyers.

``It's easier for us to help to sell the franchise because we already have the location in place,'' Feldman said.

But cheap rent isn't enough when banks aren't lending. Feldman said the franchises he works with do in-house leasing of equipment to help offset costs.

Several franchises are even lowering the cost for the initial fee. Huddle House, a 400-plus-unit family diner chain, cut its franchise fee from $25,000 to $5,000. Locations opening this year also have to pay less royalties, which are usually a percentage of monthly gross sales.

REBATES OFFERED

Exterior painting franchise 360 Painting reduced its fee from $40,000 to $30,000 and is giving a $5,000 rebate. It's also allowing franchisees to put 50 percent down and finance $15,000 over three years.

Pita Pit, a 173-unit franchise that added 19 locations in 2009 has lowered its fee from $25,000 to $20,000 and reduced royality rates from 6 percent to 4 percent for the first year. And if franchisees open a restaurant in a college town -- where it sees the most business -- they get an additional $7,500 rebate.

``The development incentives have been key,'' said Corey Bowman, Pita Pit's vice president of franchise development. ``Florida has been a lucrative market for us. Seems the south in general has been a growth market.''

Earlier this month the Franchise Expo South in Miami Beach showcased a variety of options for investors -- including many first-time exhibitors hoping to expand their business.

In this credit crunch, Marcel Fairbairn couldn't get the loans he wanted to expand his LED Source lighting business outside of Wellington. ``That's what sent me running to franchising,'' Fairbairn said. ``For me as an entrepreneur to grow my business into 150 locations, a bank is not just going to roll out the red carpet and say `Let me give you a whole bunch of money to do that.' ''

Another first timer to the show was We Do Lines, a Connecticut-based business that repaints lines in parking lots. The 2-year-old company just started selling franchises three months ago and is hoping its work with the Doral Golf and Country Club will encourage South Floridians to spend $100,000 to own a unit.

``We want to prime the pump and get them started with some solid business,'' said co-founder and CEO Chris Couri. ``There really seems to be a need for the service. We're very optimistic down here.''