Hot franchises you can run from your home.

Can you really make money in a home-based franchise? Yes--if you understand the limitations before you dive in.

IF YOU'VE BEEN SERIOUSLY CONSIDERING going into business for yourself, you've probably heard more bad news than good. Your attorney, banker, best friend and spouse no doubt have all warned you that most small businesses die painful, early deaths. They're right. According to the U.S. Small Business Administration, 63% of businesses never make it to their sixth year. Most fail because their owners don't have enough money and/or know-how to operate them effectively.

But what if you could own a business that, by design, avoids these problems? What if you didn't need as much start-up money? And what if, after you got started, you could follow a proven plan that would help ensure your success?

Well, finally, some good news. A home-based franchise can give you just that.

In essence, home-based franchises offer you certain critical advantages by combining the best features of home-based businesses and franchised businesses. First, by operating from your home, you won't need an outside office, warehouse or retail space, an expense that can gobble up the lion's share of start-up business capital. Whereas it requires a total investment of $150,000 to start the average franchised business, the average home-based franchise can be launched for less than $50,000; many can be started for as little as $10,000. Second, by operating a business as a franchise, you don't have to be an "expert" in all aspects of business operations. You simply adhere to the franchisor's proven format.

Today, more than a half-million franchised businesses account for $813.4 billion in annual revenues, or 35% of retail sales. Home-based franchises started coming into their own in the 1980s, riding the wave of technological advances that made personal computers and fax machines as accessible as telephones and economic changes that created more demand for service-oriented firms. "We're seeing a lot more businesses that can be operated from the home and a lot more franchisors that consider that a viable option," says Michael H. Baum, executive vice president of Francorp Inc., a franchise development company based in Olympia Fields, Ill. A recent survey conducted by DePaul University for Francorp indicates that home-based franchises account for almost 13% of all franchised businesses.

In addition to making it easier to get started in and stay in business, home-based franchises offer entrepreneurs flexibility and convenience. Gone are long commutes to work. Irrelevant are office politics. Unnecessary are formal requests for personal days off. But as perfect as home-based franchises might seem, experts warn that they are no panacea for business problems and are not an easy way to get rich quick.

For one thing, home-based franchising isn't for everyone. Ideal candidates should love saes and be self-motivated, able to work alone, committed, disciplined and willing to follow the franchisor's plan. Surprisingly, former corporate executives, although they are likely to have both the business expertise and money to invest, aren't necessarily the best candidates for a home-based franchise. "It's not so much adjusting to franchising; it's adjusting to small business," says Baum. "If someone's been working for a large corporation, he or she may not know what it means to wear multiple hats, change schedules at a moment's notice and have no staff to fall back on. In a small business, the owner is everything."

Because the owner is everything, another drawback of home-based franchises can be limited income potential. "A home-based franchise is a great way to learn how to start a business, but most people will outgrow them. That's the risk of any franchise," says Susan P. Kezios, president of Women in Franchising Inc., a Chicago-based association of current an prospective franchise owners. She compares home-based franchises to "starter homes," and suggests that as the franchisee's business savvy increases, he or she will want to graduate to owning more than one outlet, or selling a profitable home-based franchise to buy a larger business.

But, to get to that point, you have to get started. And for many would-be entrepreneurs, home-based franchises can be a step in the right direction. Following are profiles of three people who took that shot. These African-Americans acquired home-based franchises in three of the most popular areas: business services, personal services and home improvement. Their stories represent both the potential and the limitations of home-based franchising

SANDLER SYSTEMS INC., Stevenson, Md. Type of business: Sales and sales management training. Start-up costs: $33,300 to $37,900. Royalties: $908 monthly service fee, plys $1,500 each quarter for sales instructional materials after the first 12 months. Financing: None. Phone: [phone].

All Fred Huyghue really wanted to do that Sunday afternoon in May 1992 was camp out in front of the television set and watch his hometown Boston Celtics play the Cleveland Cavaliers. "But life brings your whatever you need," says Huyghue, 52, a former marketing executive for IBM and Digital Equipment Corp. Instead, he ventured out to a business expo where he discovered Sandler Systems Inc., a sales and sales-management training company that was recruiting new franchisees.

Just a year earlier, while recovering from hip replacement surgery, Huyghue had decided that what he needed was a new business opportunity, one that would capitalize on his considerable sales skills and aptitude for entrepreneurship. So, instead of returning to work when he was able, Huyghue opted for Digital's early retirement package and set out to find the right venture for himself. He thought about starting his own company, or buying into an existing one. But recalling the "feast or famine" years when he owned and operated a marketing consulting firm in the early 1970s, Huyghue settled on a more predictable option--franchising. "I thought franchising would offer me the best of both worlds, if I got the right one," he recalls. "I couldn't have found a better one than Sandler Systems."

Founded in 1967, Sandler Systems Inc. markets franchises under the trade name Sandler Sales Institute. The $2.3-million company has 115 franchisees in the United States, Canada and Puerto Rico. In return for an initial investment of $30,000--a combination of his savings and the proceeds from his retirement deal--Huyghue purchased the rights to operate a franchise as The SSiM Group (Sandler Sales Institute of Massachusetts).

A Harvard Business School graduate and veteran marketer who has peddled everything from pots and pans to state-of-the-art office information systems. Huyghue knew more than a thing or two about sales techniques. That made him an attractive candidate for Sandler Systems, which prefers--though it doesn't require--franchisees with some sales background. "We provide a proven method of sales training, and course books that go along with that, as well as a knowledgeable training staff and ongoing support," says Margaret Stevens Jacks, general counsel for Sandler Systems.

Huyghue can call on that support, at no additional cost, whenever he needs help servicing his 24 clients, which include independent salespeople and small businesses, as well as major corporations such as Nynex, Chrysler and Digital. Huyghue declines to say how much The SSiM Group generated in revenues during its first year of operations, but proudly reports, "We are making money."

For this franchisee, a typical workday might begin at 9:00 a.m. and end twelve hours later, during which time Huyghue conducts training classes, calls on prospective clients and writes proposals. But, thanks to the flexibility afforded by working at home, he also devotes time to his wife, Armer, four children and six grandchildren.

Although his is a competitive, image-oriented business, working from home in no way diminishes his professionalism, Huyghue says. For training classes, he leases conference room space in a posh, downtown office building. And other than "minor aggravations" like being required to have his stationery and business cards pass muster with Sandler Systems, Huyghue couldn't be more pleased with his decision to invest in a home-based franchise.

"Running a business is the most difficult thing I can imagine," he says. "You can kill a busines so quickly because your chances of making a mistake are very great. But if you have the benefit of a proven plan, it helps ensure your success."

COMPUTERTOTS, Great Falls, Va. Type of business: Computer classes for preschool children. Start-up costs: $23,670 to $40,470. Royalties: 6% plus 1% for advertising. Financing: None. Phone: [phone].

Corliss Clark-Barnes admits she may have "put the cart before the horse" when she started a business in 1991, the year she ahd her husband, Emmett, and two young children relocated to Waldorf, Md., to Roanoke Rapids, N.C. But the former social worker was so confident of success, she put everything on the line to make her business work.

Since most of the family savings were eaten up by moving expenses, Clark-Barnes couldn't draw much money from those funds. And she couldn't secure a loan because no Maryland bank would fund a venture in another state. So, to raise the $10,000 she needed to open a Computertots franchise, Clark-Barnes took cash advances up to the limit on her Discover and Citibank credit cards as well as a $2,500 loan.

Two years later, Clark-Barnes, 34, has a growing business that provides computer training to 175 preschool children in 17 day-care centers in rural North Carolina. She and four part-time employees take hardware and software to the centers (she owns eight Apples, two IBMs and dozens of Computertots curriculum packets), where they teach weekly, 30-minute classes that impart as much about reading and math as hard drives and monitors. Last year, the business broke even with $24,000 in sales. If she lands a state contract with Head Start, Clark-Barnes will enroll an additional 292 children in her program this fall, and should turn a profit in 1993. "It hasn't been easy, but I've been pleased," she says.

Under the circumstances, if she'd tried to start anything other than a home-based franchise, things might not be turning out so well for her, says Clark-Barnes. By moving her daughter, Monique, now 7, and her son, Ryan, now 5, into the same bedroom, she created low-cost office space for herself in her three-bedroom house. When necessary, the dining room table serves as adjunct work space.

Her biggest problem? Staying focused. While Clarke-Barnes wanted to be at home to care for her children, it's a challenge to strike the proper balance between business-work and housework.

Having worked part-time for a Computertots franchisee in Maryland, Clark-Barnes knew there would be a market for the service in her new home state. By tapping into parents' concerns about their children's ability to compete for jobs in an increasingly computer-dependent environment, Computertots, which began franchising in 1989, has quickly grown into a $3.2-million company with 124 franchisees nationwide.

Although Computertots looks for prospective franchisees whose drive for success is innate, the company nurtures that drive by providing ongoing training and support. Clark-Barnes says she looks forward to monthly installments of the Share Fair Packet, a compilation of marketing ideas used successfully by other Computertots franchisees, and Tot Times, a franchisor newsletter that reports on the latest issues and trends in education. "The advantage of being a franchisee, especially the first time out as a business owner, is that you have a support network to fall back on," says Clark-Barnes.

LAWN DOCTOR INC., Matawan, N.J. Type of business: Automated lawn care. Start-up costs: $34,700. Royalties: 10%. Financing: up to $12,000 for six years at 12% interest for qualified applicants. Phone: [phone].

In the six years working as an electrical engineer for Rockwell International Corp., Austin Monroe Jr. learned to appreciate the beauty of a well-executed defensive strategy. So in 1990, realizing that the Cold War was thawing out and opportunities in the defense industry were drying up, Monroe launched a pre-emptive strike: He started shopping around for a new career. "I wanted to get out before I got dumped," says Monroe, 36, who earned a degree in electrical engineering from Florida A&M University. Browsing at a franchise show, Monroe quickly zeroed in on his new target--Lawn Doctor.

A shrewd investor and money manager, Monroe anted up the $25,500 fee that bought him an exclusive territory in Stone Mountain, Ga., a suburb of Atlanta. The first year, he worked as an engineer by day and lawn doctor by night. How did he manage? "I didn't," he says. "If I was going to make the business fly, I had to do it full-time. So I quit my job." That was in February 1991. Today, Monroe has about 400 residential clients who pay an average of $40 for lawn treatments that include seeding, weeding and pest control. With the help of one full-time employee, Monroe generated $40,000 in sales in 1992. At 500 clients, Monroe says he'll start to turn a profit.

Although he's been gardening since childhood, Monroe was no expert in lawn care before he bought the business. One of the biggest benefits of owning a Lawn Doctor franchise, he says, is being able to call on the franchisor for help. "Our philosophy is that the more support they get, the more money they make," says E.L. Reid, Lawn Doctor's national franchise sales director. "And the more money they make, the more money we make." Since 1967, the company has grown into a $33-million enterprise with about 300 franchises nationwide.

The freedom to operate the business from his home is another good thing about his Lawn Doctor franchise, says Monroe, who is single. He keeps overhead low by using an upstairs bedroom, equipped with a computer, fax machine and two telephones, as his office. In his garage, he stores equipment and supplies.

Monroe, who often works 15-hour days that begin at 6:00 a.m., takes it easier from mid-November to mid-February, when his business "pretty much shuts down," he says. But all the while he's still working--ordering supplies, prospecting for clients, getting ready for the next season. "The success rate of franchises is one of the reasons I decided to do it that way. There were a lot of things I still had to learn about business. I would have made a lot of costly mistakes on my own."