Last month in this space I shared some information from www.entrepreneur.com about home-based businesses, and I mentioned several specific franchise opportunities that serve narrow market niches. I said they looked like "intriguing" business opportunities.

Evidently I wasn't the only one who thought so.

I received an e-mail from one of this column's readers who had an unpleasant experience with one of the niche market franchises that I mentioned. I have asked for, but not received, her permission to use her name in this column, so I won't mention it or the name of the specific franchise to which she refers. But I do want to share her experience in her own words as much as possible (I've edited a little for clarity) as a cautionary tale to all who are considering franchising a home-based business.

According to our reader, "We were saved by only minutes from investing the required $10,000 to buy a (business) dealership.

"We had done what we thought was our due diligence on this business, which took weeks," she wrote. "We later discovered that the references for which (the company) provided names and telephone numbers were really people (they) set up to give glowing reports, claiming that this was a business that could easily produce as much as $200,000 your first year.

"We actually signed agreement documents and agreed to a $4,000 down payment (my husband negotiated this price; their standard requirement is to get the entire $10,000 up front)," our reader continued. "My husband had actually taken our paperwork down to Kinko's to be sent by FedEx when I received a phone call from one of the (franchise) dealers that we found on our own through an Internet search. He called in response to a voice-mail message we had left with him a week earlier.

"After a few minutes on the phone with him it became clear that this franchise operation is not what it appeared to be," the woman said. "My husband rushed back down to Kinko's and canceled our mailing - luckily it hadn't been shipped yet, so (the company) never received our signed agreement. However, they still went ahead and charged our credit card the $4,000 and turned us over to their attorneys to sue us for the rest of the dealership money. . . . They tried to hold us to a verbal agreement to purchase a dealership."

Our reader had to hire an attorney to fight the franchisor and receive a credit of the $4,000 that had been charged to their credit card - a battle that they eventually won. But the process was painful and frustrating.

"When my husband first called (the company) to inform them that we had decided not to purchase a dealership and to request the $4,000 back (which, by the way, they were not supposed to process until they had received our signed paperwork), the president of the company laughed," she said. "He used the most repulsive profanity and told my husband that not only would they not refund our money, but that we also owed the other $6,000 to them.

"We thought they were a service-oriented company, but all they are about is getting people's money."

Thankfully, there are also a lot of good franchise opportunities for the home-based entrepreneur. But every once in a while it's good to be reminded that there are crooks and scoundrels out there trying to separate starry-eyed would-be entrepreneurs from their cash.

Take a lesson from our reader and go overboard on your due diligence. Go ahead and talk to the references provided by the company, but also find others who can confirm or deny the company line. It may save you a lot of aggravation and considerable financial distress.