What restrictions should I be aware of if I want to run a franchise from home?

Your ability to run a franchise from home will depend on the terms of your franchise agreement. There are, of course, many franchises which envisage that franchisees will operate from home and that is expressly provided for in the agreement. You will need to check this before you commit to a franchise.

Inevitably those franchises where franchisees are to work from home require franchisees to have a separate office area and may, indeed, require franchisees to have a separate secure lock up where the stock of products can be stored as well as secure parking for any vehicle. In addition, because franchisors normally reserve to themselves the ability to enter franchisees’ premises to take samples of products and review records the franchise agreement often provides that your financial records should be kept at a nominated address such as your accountants, in respect of which the franchisor will have access – franchisors cannot oblige franchisees to give them access to their homes.

In addition to the restrictions and obligations set out in the franchise agreement, if you work from home you may (although this is unlikely) require planning permission and it could affect the capital gains tax exemption for your home and so this would be something that would be worth checking with your accountant.

Written by: John Pratt

Partner, Hamilton Pratt