There are hundreds of variations of business opportunity contracts; consequently, not all the negative points mentioned will apply to every situation.
Under ideal conditions, business opportunities are a good, low-investment way to get into business with minimum risk and a good chance for success. But nothing in this world is perfect, so here are some problems you might run into:
- Exclusivity clauses: A business opportunity might require that you not distribute products made by any other companies, which can reduce your potential income.
- Parent company bankruptcy: You might build up a good distribution business, only to have your supplier go out of business.
Excerpted from Starting a Home-based Business