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A Closer Look at Service-Based Franchises

If you’re looking for a franchise to own and operate, you’ve probably noticed that there are a lot of them out there. In fact, there are thousands. After a while of poring through them, it can feel like trying to find your soulmate by swiping through an app. There are just so many franchises to wade through. This is why, if you feel aimless and in need of a direction, you might want to consider a service-based franchise.

Of course, that brings a natural question: isn’t every franchise a service-based business? In fact, isn’t virtually every business providing a service?

That may technically be true, but service-based franchises are generally thought of as a franchise that comes to a resident’s home or a business — and then provides a service rather than selling a specific product. For instance, an exterminator or insect control company would be a service-based franchise. Plumbing or junk removal companies are often considered service-based franchises.

And why should that appeal to you? It may not. But many entrepreneurs are attracted to service-based franchises for a number of reasons.

Lower overhead

With many franchises, especially those where consumers come to your place of business, you need to have a large brick-and mortar-location, signage, a parking lot, and staff to man the place, sometimes from morning to late at night, or even 24 hours a day.

But with a service-based franchise, depending on what type you buy, you may only need a much smaller location — or you might even be able to operate it out of your home office. You will probably have employees and payroll and maybe delivery vans — and so it can still require a sizeable investment. You also need to be well-insured when sending your employees out on the road and into people’s homes. But generally, however, service-based franchises are often less expensive to run.

Sometimes, if you aren’t the one going out for the service calls, they might not require as significant a daily time commitment — but every franchise is obviously not like another, and it’s important to know the type of ownership and management style you desire before signing on.

Repeat business

Service-based franchises tend to do very well with repeat business, which is helpful since consumers tend to pay more for service calls than they do a hamburger and fries. Now, if you provide kind of a once-in-a-lifetime service, like cleaning up somebody’s home after a flood, they won’t necessarily be calling you every few months. But if you exterminate somebody’s home, if you do heating and cooling work for them, if you have a handyman service, and so on, you could be on speed dial for a lot of consumers in your community.

Specialized training

If you’re offering a service, your employees will need to be trained to do the job right. In some cases, they might need to be highly trained and certified to do a more specialized task. If you have a plumbing franchise, you can’t just hire anybody off the street. The upside is that if you buy a service franchise that requires employees to be specialized in their training, you can market that in a big way, and generally, once you’re established, it can mean less competition.

Service-based franchises are recession-proof and pandemic-proof.

Look, there’s no question that when the pandemic hit, a lot of service-based businesses — along with nearly every business in the world — were hurt to some degree. Cleaning services, for instance, suddenly found that they weren’t always welcome in homes.

Still, I’ve talked to plenty of franchise owners who did surprisingly well even during the pandemic. That’s likely because so many people were stuck in their homes. If you’re in your house all the time, you want it to be as comfortable as possible. You also notice problems even more when you’re there 24/7. So if there’s a service you need done, and you have the income, you’re probably going to be making some calls.

Meanwhile, if you provide a service that a customer finds indispensable — that helps, too. No matter how lousy the economy is, a homeowner will only go so long with a broken air conditioner or heater. If you’re afraid of mice, you may feel that paying your pest control service is about as important as paying the mortgage.

There are so many elements that factor into your decision of purchasing a franchise and aligning yourself with a specific brand. Clearly, so much of choosing the right franchise depends on your personality, skillset, and simply where you are in your life and career. Traditional retail or food may be what you love and what you should do, and you can certainly become very wealthy taking that path. But when you’re thinking of the franchise that’s right for you, if you consider service-based franchises, you’ll be doing yourself a service.

Give me a call at 919.846.7111, shoot me an email at jjudy@franchoice.com or click the button below to schedule an appointment.

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