Home Services Franchises-thoughts from the Big Chair 

They say home is where the heart is, but for many businesses it is also the place where the money is!

We are all busy these days and want things done with the minimum of fuss and effort when it comes to our personal lives whether it is lawn mowing, home cleaning, home care, car repairs or our groceries delivered. We prefer and expect all these businesses to come to us and consumers will pay for that convenience.

Franchising is in almost every  business sector from food, fitness, bookkeeping, real estate, financial services, logistics, handyman, home care and the list goes on.

Retail franchises have faced difficult times over the past few years post Covid and we can still see the impact of this with shop vacancies in many suburban shopping strips. 

 

Digital Era for Business

Covid triggered many positive things, such as the incredible acceleration to digital transformation for businesses and use of social media platforms as the way to market.

New franchisors need to be able to offer franchisees access to these advances to stay relevant and competitive.

The focus of the recent National Franchise Convention in the Gold Coast was “A World of Opportunity” which was right on the mark with excellent presentations on the impact of technology and AI that we all must adopt. As Michael McQueen stated in his presentation “AI is not the future it is here”!

 

New Franchise Era- the “Franchise frenzy”!

Rising from those Covid ashes we have been surprised by the “franchise frenzy” (that’s what I call it!) of new franchise businesses and opportunities now on offer.

It shows me that franchising as a business model is still the number one business model for expansion of a brand and system over slower organic growth such as hiring more staff to grow then managers to manage those staff, or compared to the risk of bringing on other investors or shareholders which are other options to grow.

Franchising still provides an excellent opportunity for those who would not otherwise be able to set up and operate their own business.

A good franchise system will provide the brand, systems, support, marketing and training needed for a franchisee to successfully operate their business.

Over the last 2 years we have established franchise systems in sectors such as dentistry, conveyancing, home wood delivery service, finance and owner’s corporation and sold the rights to a mobile surface refinishing business.

The growth has been in the areas of home services and mobile franchises, including in the financial services sector, early learning and home care/ NDIS sectors.

 

Home Care /NDIS services

One of the growth areas in franchising has been the home help, home care/ NDIS sector as well as mobile franchises.

The NDIS program supports older people with complex care needs to live independently in their own homes with patients receiving a Home Care Package and then selecting their service provider.

I spoke to John Roberts, Director of Complete Nursing Franchising, a Home Care and NDIS agency we are currently working with, to finalise their NDIS services based/franchise model.

John has been involved in many successful businesses over his career and having been a franchisee himself is now establishing his franchise with a focus on a model that is fairer and rewards franchisees for their efforts.

John states “There will be no marketing fund, the entry cost will be highly competitive and Complete will offer new franchisees an initial guaranteed revenue stream over the first 12 months of their business which reduces the stress and pressure of starting up a new business, so the franchisee can focus on the delivery of high-level service and care to their clients.”

 

Mobile Franchises 

Mobile franchises are attractive for a variety of reasons particularly due to the low cost of entry, flexible work conditions and the fact that with generally low overheads a franchisee can earn a reasonably good wage for their effort and build their customer base using digital marketing and social media at low cost. 

The array of franchises in the mobile sector is enormous but you still need to take time and select a franchise that is right for you, your family, your work life balance expectations, and one that gets you up each morning excited to be part of the brand and system.

 

Home cleaning

The cleaning franchise market is highly competitive and did very well during and post the pandemic. The sheer volume of opportunities is immense and includes systems such as V.I.P. Home Cleaning and Lawn & Garden Maintenance, James Home Services, Gutter-Vac and the list goes on.

 

Home Maintenance and Repairs

These franchises tend to be underestimated in their ability to deliver good opportunities with mobile systems such as The Grey Army (home repairs, maintenance) and Fix N Chips (surface repairs and cleaning) as they provide flexible work hours and a good return for their effort.

Like any franchise you still need to do your due diligence to see if its right for you, as no two franchise systems are alike as to the franchise fees they charge, ongoing costs and their return. An example is that a Café 2 U mobile coffee franchise requires an up-front investment of around $120,000 whereas a VIP cleaning franchise is just $20,000. What will they deliver by way of support systems and return? Some franchisors charge a fixed fee whilst the majority still charge a royalty based on the gross revenue and a marketing levy.

Tips

• Seek expert advice from a specialist Franchise lawyer and your accountant before you commit and if the numbers do not work walk away.
• Can you see yourself working the business in 2- or 3-years’ time, or will you feel imprisoned by it? 
• Once you take up a franchise there are only limited ways to exit and there may be no “pot of gold” capital return at the end, so you need to make sure you can draw a reasonable salary and other benefits along the way.

 

Things to consider in selecting the right franchise for you 

Even though they may be low-cost entry, the average cost to set up a home based, or mobile franchise may still be in the range of $30,000 to $150,000. Here are some key things to consider:

• Is the franchise an established or new brand? – a new franchise can be a great opportunity, but it can also be a higher risk.

• • Does the Franchisor embrace new digital technology and systems? are they social media savvy? If not, they are likely to be overrun by more progressive competitors.
  • Is there a long-term market for the product or services or is it a passing fad or trend? 

• Who is the franchisor? will you meet the owner or just the sales agent or broker?  

• What training and support is offered and are the work hours flexible?

• Talk to other franchisees in the system and get their feedback on the franchisor and system?  contact at least 3 to gain different views.

• Are you simply buying yourself a job? That’s fine, but don’t be afraid to walk away before you sign up, if the numbers don’t work or if you are unable to at least draw a basic salary along the way – get independent financial advice before you commit.

• Are you a “force for good “and prepared to work within the franchise system rather than trying to fight or change it?  If you want to change the system, don’t be a franchisee as it will likely lead to dispute!

Seek Specialist Franchise Legal and Financial advice before you commit and don’t be rushed or pressured into a decision. There is a great “World of Opportunity” out there you just need to pick the right one for you!

Robert Toth Accredited Commercial Law & Franchise Specialist Special Counsel mobile 0412 673 757- Named as a Leading Franchise Lawyer in Who’s Who Legal