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Few people imagine a glamorous lifestyle when they hear the word “franchise.” Fast food? Cleaning service? Home care? No, thank you. That strong “uncomfortable” factor is often accompanied by a degree of anxiety or hesitation.
Ah, I understand. Long before I entered the world of franchising, I was working for a corporate America and a franchise consultant approached me about a franchise opportunity. Was I satisfied with my career at the company? No, but it was stable, right? It was a “smart” choice. The “right” choice. Well, perhaps the “conditional” selection is more accurate. Still, in my late 40s, I chose my own path.
My ears first perked up when a friend of mine who owns a franchise started expanding his multi-unit business and decided to sell it in a multi-million dollar deal. I had no idea that franchising could expand to this extent. I decided to take a closer look at the research and see the franchise in action.
Now that I own a franchise myself and have worked in the industry for eight years, my perspective on the many “terrible” franchise industries has changed dramatically. Are drain cleaning services, roof repairs, and pest control appealing right now? No, but as you watch your kids graduate college debt-free and your retirement savings grow, You will worry about recognition. What I’ve learned is that these essential industries have real value and, if given the opportunity, can bring real benefits that can fit perfectly into your goals as well.
So why are these “terrible” franchise industries so valuable?
1. Unlimited demand
Consider a franchise that provides home care services. Think drain cleaning, house cleaning, pest control, plumbing, HVAC, electrical, lawn care, trash removal, and more. These service-based companies provide evergreen services that people need throughout most of the United States. Either way, home ownership, apartment management, and commercial development require ongoing maintenance that requires professional services. Professional services often provided by local franchise brands with national recognition.
2. Resistant to recession
Regardless of what’s going on in the economy, in conjunction with unlimited demand, many services are “needs” rather than “nice-to-haves.” Medical waste removal? Senior care? Childcare? If you think back to the height of the pandemic, there were many services that were in demand regardless of the lockdown.
There was a mix of different franchise brands providing these essential services, as well as many others supporting people in need of care. I’ve seen time and time again how services that are often dismissed with the phrase “someone has to do it” overlap with the franchise industry.
3. Low initial investment
One of the main advantages of a service-based franchise business is that the barrier to entry is relatively low. These brands do not require stores or real estate for customers; the services themselves are provided at the customer’s location.
Note that not all franchises are synonymous with “ick”. Consider boutique fitness, salon services, pet motels, and more. However, these location-based businesses, which include retail stores where customers are served at fixed locations, often have higher initial investment costs.
4. Reducing fixed overhead
In addition to lower initial investment, service-based brands often also have lower fixed overhead costs. In contrast, location-based brands (salons, boutique fitness, pet care, etc.) often have higher fixed overhead costs. These are passion-based industries, so they can be more competitive.
Consider a niche franchise that provides roofing solutions to a specific region. As a franchise owner, you will be asked to perform that service as needed. However, roofing is not a service that repeats frequently, as it is a big ticket. This business model requires only a salesperson (perhaps the franchise owner) and a project manager to see the installation through to completion. Regarding labor costs, this model has low fixed overhead costs as they can be provided by contractors.
In fact, many of these project-based service brands employ a contractor model. This means you don’t have to spend labor costs that don’t need to fulfill a contract. This model helps you reach profitability faster without increasing overhead costs.
5. Franchisor support
One of the many benefits of working within a franchise system is that you receive ongoing support from your franchisor. All reputable franchisors will help with initial setup and operations, but service-based franchisors often include additional services such as a call center that provides back-office support. These may assist in scheduling customer visits, determining needed services, and more. This eliminates the need to hire in-house employees, frees up your time, and allows you to maintain your corporate job while building your franchise business.
Since becoming a franchise consultant, I have seen many times initial resistance to a particular industry melt into possibility. While the “awkward” factor is real and you shouldn’t enter an industry you can’t afford to lose, it’s important not to let initial hesitation deter you from pursuing business opportunities that support your professional goals.