The opinions expressed by Entrepreneur authors are their very own.
Listen, when you hear the term “franchise,” very few people imagine a great lifestyle. Fast food? Cleaning services? Home care? No, thanks. There is often a level of concern or hesitation associated with this all-powerful “ick” factor.
Hey, I understand. Long before entering the world of franchising, I used to be working in corporate America when a franchise consultant approached me about a franchise opportunity. Have I been completely happy in my corporate profession? NO. But it was stable, right? It was a “smart” alternative. The “right” alternative. OK, possibly the “conditioned” alternative is more accurate. Nevertheless, I used to be already in my 40s and had chosen my path.
My ears only perked up when a friend of mine who owned a franchise began expanding his multi-unit operation and decided to sell the company for a multi-million dollar deal. It never occurred to me that a franchise may very well be on such a scale. I made a decision to provide the franchise a real look and dive into research.
Now, having owned a franchise and worked in the industry for eight years, my perspective on many of the “sick” franchise industries has modified dramatically. Are drain cleansing, roofing repair and pest control services attractive now? No, but I’ll worry about this belief as I watch my children graduate from college debt-free and my retirement savings grow. I’ve learned that there is real value in these on a regular basis essential industries that, if you give them a probability, bring real material advantages that may additionally be a perfect fit for your goals.
So what makes these “nasty” franchise industries so worthwhile?
Unlimited demand
Consider franchises that provide home care services. Think drain cleansing, house cleansing, pest control, plumbing, air-con, electricity, lawn care, garbage removal, etc. These service firms offer evergreen services that individuals need in almost every corner of the United States. No matter what, home ownership, condo management, and industrial development mean constant maintenance that requires specialized services. Specialized services that are often provided by a local, nationally recognized franchise brand.
Recession-proof
Working hand in hand with unlimited demand, regardless of what happens in the economy, many services are not “nice to have” but “need to have”. Disposal of medical waste? Care for a senior? Child care? If we recall the essence of the pandemic, there have been plenty of services that were in demand regardless of the lockdown.
A spread of franchise brands offering these and many other key services supported people in need of care. I have seen many times how services often dismissed with the phrase “someone has to do it” overlap with the franchise industry.
Low initial investment
One of the most important advantages of service-based franchise firms is the relatively low barrier to entry. These brands do not require a customer-facing store or real estate location, and the service itself is provided at the customer’s location.
It’s value noting that not all franchises are synonymous with “ick” – consider boutique fitness, salon services, pet motels, etc. However, these location-based businesses, which include retail stores where the customer receives services at a fixed location, are often associated with with higher initial investment costs.
Lower fixed overhead
In addition to low upfront investments, service-based brands often have lower fixed overhead costs. In contrast, location-based brands (e.g. salons, boutique fitness, pet care, etc.) often have higher fixed overhead costs – which can face more competition as a consequence of the undeniable fact that these are passion-driven industries.
Consider a area of interest franchise that provides roofing solutions for a specific territory. As a franchise owner, you are called upon to offer this service as needed. However, since roofing is a high cost, it is not a ceaselessly repeated service. In this business model, only a salesperson – possibly a franchise owner – and a project manager could also be required to perform the installation. As for labor, in this model it might probably be provided by hired contractors, keeping ongoing overhead costs low.
In fact, many of these project-based services brands have contractor models, which suggests you are not spending money on labor without contracts to meet. This model helps you achieve profitability faster without increasing overhead costs.
Franchisor support
One of the many advantages of working in a franchise system is the ongoing support you’ll receive from the franchisor. While any reputable franchisor will help with initial setup and operations, service franchisors often offer additional services equivalent to call centers that provide back-office support. They can allow you to schedule client visits, determine which services are needed, and more. This eliminates the have to hire an office worker, allows for greater use of time, and even permits you to keep your corporate job while building your franchise business.
Since becoming a franchise consultant, I have seen many times how initial resistance to a particular industry turned into opportunity. The kick factor is real, and while it’s best to never enter an industry you’ll be able to’t get past, it is important that your initial hesitation doesn’t discourage you from pursuing business opportunities that support your profession goals.