Business Franchise Australia

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Managing the tricky side of the home service sector

All those years ago when I first became involved with franchising, the franchised home service industries were pretty much limited to lawn mowing and cleaning domestic properties. Franchised businesses were concentrated in the bricks and mortar arena. Predominantly retail and food. Why? Because franchisees attracted to these areas had the skills to take on the business management required as well as delivery of the product.

 

At the time, it was said service industries were not suited to franchising because people suited to delivering many service products were not suited to running their own franchised businesses.

 

Today the home service sector is heavily franchised and growing significantly.

 

So, what has changed?

 

It’s not the people buying into franchised businesses – they are still people with the same characteristics so proficient at delivering great service. People with empathy, caring, usually detailed and understanding of the customer but not so great at the marketing and financial management or handling tricky staffing situations required by running a business.

 

Jim was probably one of the first people to cotton on to how to make this sector work as a franchise. When I helped him set up the Master Franchise for Jim’s Mowing all those years ago in Western Australia, he told me…

 

‘I want my franchisees pushing a lawnmower as many hours a day as they can because this is what brings in the money. For them, and for me.’

 

I don’t want them doing marketing, letterbox drops, trying to get new customers or doing their bookkeeping or other business management which will take them away from doing the job or spending time with their families after hours and weekends.’

 

So, Jim’s was set up with a central phone number for all calls and the head office handled marketing, sales, bookings, and bookkeeping. Head Office looked after all the business work. Franchisees concentrated on the lawn mowing. The result was that I witnessed the first couple of franchisees earning well an excess of $1000 a week – and that was back in the early 1990’s…

 

So, Jim’s innovative system worked, BIGTIME.

 

The home services sector today

 

Today, franchised home services include a full list of service options.

 

  • Home care and design
  • Repair and maintenance
  • Health wellness
  • Beauty
  • Home tutoring
  • Finance & mortgages
  • e-commerce and m-commerce

(Mobile commerce, also known as m-commerce, involves using cell phones and tablets purchase and sell products, online banking, and paying bills.

 

This sector has exploded in recent years due to three things.

 

  1. As you know, COVID changed community sentiment over the lifestyle desired. People found they could do their jobs just as well from home and they don’t want to go back to that commute or working long hours in an office. So, homes have to be modified to enable this kind of work.
  2. But people are working longer hours and don’t have the time to do home tasks. This group does have the funds though to pay for someone else to get the job done.
  3. Australia is aging and will continue to do so for years yet and the Baby Boomers in this aging sector want to stay home which means they will need home care as the years go on.

What’s expected

 

The sector is expected to grow at an impressive rate by 2028.

 

However, it won’t all be plain sailing. Well-established vendors already in the market will be difficult to compete with and the post COVID economic climate is having an impact on the available discretionary spending for many households.

 

But, for current operators a warning – new brands and refreshed existing groups are emerging with the latest round of tech – often putting them at the forefront for consumers searching for service providers.

 

Franchises do it better in a difficult market

 

The big thing to remember is that the franchise model enables businesses to cope better through tough times.

 

This was very clearly proven through the COVID years. Independent businesses in sectors such as food, construction, personal services, retail were forced to close.

 

Franchises not so much because the better franchisors had control of things such as supply, marketing and lead generation and the best were able to help their franchisees adapt to the changes in the way product needed to be produced and delivered.

 

This flexibility and increased business acumen is there now in the best franchises and will continue in future economic situations.

 

The key though is that the franchisor and the franchise group must have certain characteristics to survive. Without these characteristics, franchises will struggle as much as any independent through times of economic stress which force households to pull back on discretionary spending.

 

Key characteristics of the best franchise groups

 

Franchisor understands the model

 

Modern franchising is not a simple beast. Over the past ten years or so, the community has put pressure on the franchise sector to do business better. The Franchise Code of Conduct and Fair Work legislation have all changed significantly and franchisors have significant responsibilities for looking after their franchisees and the way their franchisees manage their staff. No longer can you recruit just anyone to take on a franchise, give them cursory training and then expect them to just get on with the job. If this is going to work successfully for all the franchise partners, a franchisor needs to understand what is required.

 

Franchisor understands the people

 

First and foremost, it is essential that franchisors understand the characteristics of the people they recruit. It is inevitable in the home services sector that the people best at delivering your service will not be good at marketing. Do not expect someone suited to delivering a therapeutic massage or a nurse or a tradesperson to be great at cold calling or attending events or managing social media or AdWords. Neither will they be great at managing the money or all the business admin required.

 

In today’s digital environment tasks such as these are best done through a central digital system anyway and it is the franchisor’s admin team who needs to take on these tasks.

 

Recruit people to deliver your service superbly and take away the hassle of business. Remember Jim’s ‘pushing a lawnmower’ example?

 

Franchisor understands and supplies crucial support

 

So, what this means is that a franchisor must have a wonderful support office. One that will not only take away the business hassles, but which can also build the relationship with franchisees and bring them into the family, provide training at induction and as required through the years, to staff as well as franchisees. And remain on top of what is happening in the community and the economy, so they know when it is time to adjust.

 

This support is the central responsibility of any franchisor.

 

To conclude

I know, franchising is a wonderful business model for any sector in business in Australia. But it needs to be done well to stay wonderful.

 

Brian Keen has been involved in the franchise industry for more than 30 years and Prue has been involved with systems and business for as long. Together they founded Franchise Simply, Systems2Grow and Microloan Foundation Australia. Brian’s on-the-ground business experience as a multi-unit franchisee, franchisor and consultant helping many of the big names create their own franchise systems and growth over the years combined with Prue’s structured approach has been fed into Franchise Simply, helping today’s SMEs and Franchisors grow their business by franchising.

www.franchisesimply.com.au | www.systems2grow.com