In my experience as a franchise consultant there are some things I hear quite regularly. What are the fastest growing industries? Which ones are the best investments? What is the most profitable franchise? Which franchise is really “The Best”?
I’m going to break that down into several things that are important to understand before you buy a Home Services franchise or any franchise for that matter. If you do these things you will find the one that is The Best.
First, you need to understand the demand. If there is lots of demand then expect lots of competitors in the space as well. I’ll get to that part in a second. If demand is high then there will always be someone somewhere within your territory that will need your services. Sometimes I hear people say that they don’t want this type of business or that type because they see them everywhere. Are you kidding me? That’s good! How many HVAC, plumbing, cleaning, lawncare, pest control, or junk removal franchises are there within a few miles of where you live? Tons right? People like home services franchises because they can connect with them. We all use these in our day to day lives. If the demand is high, consider it one box checked.
Second, look to find a unique value proposition. If there are a ton of people who do it already, why does the consumer choose you? One of the great things about franchises is that they have economies of scale which afford them the ability to offer added benefits to the consumers that they are willing to pay extra for. Like answering the phone. It may be a call center that takes that call but they are able to book an appointment right away and oftentimes even collect a payment without a lot of back and forth. Or being there on time. It’s hard to do when you are running a service business but technology helps get franchisees in front of their clients sooner. Other things could be brand recognition of course, proprietary processes or tools to do the job, in house products that the franchisor offers exclusively through the franchisee, and more.
Third, consider the investment. Investment of your time and investment of your money. Franchises come in all shapes and sizes but many people tend to connect with home services franchises because they are often very profitable and they also usually cost less than a brick and mortar franchise with the same kind of revenues. They also usually have higher profit margins too. All of that boils down to your potential ROI in the business. As you dig into this you want to also understand the type of business that you want. Some home services franchises are recurring revenue businesses (like spraying for mosquitos) while others are more transactional (like roofing). One can potentially pay you big dividends early on while the other one is more like a freight train.. Slowly building steam and momentum all the time. How do you weigh the two in terms of time and money? Are you rich if you have a business doing well that you rarely have to be at or are you rich if you’re making a pile of money working 40 hours a week? Or is it some kind of combination of both.
Another thing to consider is the training and support of the franchisor. If they are bad at this you’ll hear about it when you talk to the franchisees. For me, this is a deal killer. If the franchisees say their franchisor has gone above and beyond for them and that they are not only extremely satisfied but also would do it again.. That’s what I want to hear. Anything less and I wouldn’t do it. Other indications are when you see existing franchisees buying more territories, when you see their AUV go up at a steady rate year over year, or when you see in their item 20 that they are growing as a brand and have few or no franchisees who have failed.
There are of course lots of other factors to consider as well. But if you’re still reading you’re waiting for me to tell you which home services franchise is The Best. That answer calls on your introspective self. Never buy a business based solely on what it can make. Start by looking for something that you believe you will enjoy doing, and that can accommodate the lifestyle you want. If the franchisees are making a ton of money but you don’t really get it or it can’t match the time you have available for the business, or doesn’t really match your skill sets and experiences, then it really doesn’t matter what it makes on paper because it won’t make that for you. The Best home services franchise will be the one that can truly check every box. I tell all of my clients that you have to follow your heart, trust your gut, and do your diligence. When you do that, you will find the most profitable and BEST franchise for YOU.
About the Author
Dustin Helms is an entrepreneur at heart. He relentlessly vets out franchise concepts for his clients and helps you ask the right questions. If you are looking to get out of the rat race by transitioning into a career as your own boss and CEO, or if you already have a great concept that you wish to expand nationally, Dustin has the resources and the experience to help you with both. Contact Dustin at
Dustin@TheFranchiseConsultingCompany.com.
Thank you for subscribing to the Franchise Journal Newsletter.