Homevestors of America franchise profile Research Paper

Homevestors of America franchise profile - Research Paper Example Kenneth D’Angelo created HomeVestors Company, with the main aim being to utilize franchised services as the route towards sustainable real estate business. Indeed, the franchising operations of the company began in 1996, where the company’s initial venture involved the buying of worn out houses, repairing and selling them at a profit. On this note, the company embarks on buying houses of people who are moving due to job transfers, retirements or shifts and renovating the houses to be resold to potential buyers who may want to buy the houses. To date, the company has purchased more than 45000 homes in the United States since it began operations, and its high-ranking services will continue to boost its operations and create better avenues for franchising. One of the most profound benefits of franchising operations is the fact that the capital requirements are much lower when opening new departmental stores or branches. Indeed, a company seeking to expand its operations through franchising incurs fewer costs, as opposed to committing funds and get new stalls (Campbell, and Lafili 93). On this note, the business creates independent owners who assume all the costs associated with operations, only leaving fewer responsibilities to the parent company. Further, the parent company experiences increased rates of expansion, mainly due to the facts that the costs of such a venture are reduced. As opposed to commitment of huge amounts of cash in budgets as capital requirements to open up new businesses or branches, companies under franchise can reopen many times the number of stores or businesses with the same amount of capital, which may facilitate rapid expansion even into the untapped markets in the industry. Looking at the disadvantages of such an idea to the parent company, it is evident that setting up branches in diverse geographical locations may require increased variation of products.