Home services can mean various services like (1) care provided to customers within the customer’s home environment; (2) services for home projects such as maintenance, remodelling, construction, inspection, cleaning and gardening; and (3) services to provide assistance with activities of daily living and self-management tasks to persons who reside in their own homes.
Home services in franchising are a huge growth area. They have been around for many years but people are working harder and harder, have less time available, and many want to enjoy the weekend without facing chores at home.
What home services are available?
Neighborly is a US franchise system which has over 30 brands including Mr. Appliance, Mr. Electric, Mr. Handyman, Mr. Rooter, Rainbow Restoration and Window Genie to name but a few; and a number of those systems are in many countries.
In Australia and New Zealand there are many examples of home services including V.I.P. Home Services, Jim’s Mowing, Jim’s Test & Tag, Jim’s Fire Safety and Jim’s Cleaning Group.
In New Zealand there is Hire-A-Hubby which offers decking and fencing, kitchen and bathroom, exterior maintenance, interior upgrades, landscaping, installations and project management. There is also Green Acres which started as a lawn mowing franchise many years ago but now offers a full range of home services and Crewcut which is a similar garden/outdoor property services franchise. Another example is Care on Call which provides high quality and personalised home care support services for people of all ages. They can help whether you live in your own home, a retirement village or a rest home and there are highly trained staff who focus on care and client compatibility, best practice and clinical oversight. MY Guy is another home handyman franchise which operates in the Auckland region.
Further, there are a number of services which provide help and advice relating to home furnishings. For example, Carpet Court and Flooring Design which provide advice on all types of flooring; and Guthrie Bowron which provides advice on window treatments and colour schemes.
What is common to all home services franchise systems?
The answer must be a profitable business, well capitalised, has management strength and experience, is easily taught to others, has good training and expertise, has some unique features, has an effective catchy name and has protected intellectual property rights and hopefully will have an edge on competition.
What should you look for?
If you wish to become a franchisee of a home services franchise then you should choose a brand which appeals to you, look at the franchisor’s track record, note who the directors of the franchise system are and check out their business experience, consider the initial investment required, consider the number of existing franchisees, talk to at least half a dozen and obtain financial data on the franchisor.
In relation to finding out information from the franchisor, you should also ask whether training is an extra cost, what working capital will you need, territorial practices and exclusivity terms, types and amounts of advertising support, any requirement to buy products from the franchisor and any operating restrictions.
The advantages of buying a home services franchise instead of starting your own business include receiving better training and manuals from a franchisor, the ability to exploit new ideas more quickly, hopefully achieve rapid growth which will reduce the effect of competition, have expert support from head office and provide better service for customers.
Franchise Agreement
The key legal document is the franchise agreement which must cover a number of matters including a defined territory in which you will operate, the types of customers to whom you may provide services, the nature and extent of your obligations to the franchisor, a duty to act in good faith towards the franchisor, your right to sell or transfer ownership of your franchised business, the terms and conditions under which you may terminate the agreement, the training and support provided by the franchisor, precise definitions of royalties, marketing levies, upfront franchise fee, and a list of all other obligations.
You may want to look at two or three home services systems in parallel. With each you will have to sign a confidentiality agreement and you should go to an accountant for financial analysis and cash flow forecasts. You must obtain independent legal advice and that normally means that your solicitor who should be experienced in franchising will look at the form of franchise agreement and comment upon it, knowing that with any mature system the agreement will not be amended in any way.
If you find out from a potential franchisor that the system has ill-defined territories, it demands a large upfront franchise fee which is unreasonable and the directors have had litigation against them or the system or have bad references, then be wary. I would usually tell a potential franchisor if they get negative advice “to run a mile” as there is always another franchised business to purchase.
The types of home services will continue to expand – there is really no limit. For example, in New Zealand there is Cleantastic Commercial Cleaning, Jani-King Commercial Cleaning, Paramount Services Commercial Cleaning, Clean Planet Commercial Cleaning, Clean Corp and Crest Clean to name but a few.
Finally, the 2024 Survey of Franchising which broke down various categories showed that under Administration and Support Services, which included domestic and industrial cleaning, gardening services and lawn mowing, the percentage was 15.7% down which is a slight decrease from the 2021 survey results. However, in my opinion, the franchise market in New Zealand is very active in relation to home services which will continue to increase as people value their leisure time.
Stewart Germann
Stewart Germann Law Office
Auckland, New Zealand
E-mail: stewart@germann.co.nz
Website: www.germann.co.nz