What is a Service Franchise?

When choosing a franchise opportunity today, prospects will encounter one major choice early in the process: Should I invest in a “service franchise” or a “retail franchise”? The difference comes down to what is being sold. A retail franchise sells a physical product, and a service franchise sells, well, a service. Each category has its benefits, but in today’s post-peak-pandemic landscape, the services industry is undoubtedly emerging as a dominant force, with people increasingly moving away from brick-and-mortar retail shopping and the country itself shifting into a “service economy.”

And for those entrepreneurs looking to take advantage of this shift, franchising encompasses nearly every service category imaginable — handyman, lawn maintenance, child care, travel agents, automotive-related services, interior design/decorating and many more.

“We’ve been bullish on the service industry for 30 years,” said Chris Seman, president of Strategic Franchising Systems, a multi-brand franchisor behind several service-based brands. “Now, the service sector is emerging as a leading franchise sector for 2022. Throughout COVID-19, people were looking for meaningful opportunities and leaving their jobs to be more fulfilled. By joining a service franchise, prospects increasingly realize they can take greater control over their destiny and achieve their dreams of successful business ownership.”

The service sector continues to attract qualified franchise owners for several reasons, Seman says. For example, most service brands are home-based, allowing owners to keep operating costs significantly lower than competitors. 

“There are none of the brick-and-mortar start-up costs that make franchising unrealistic for average Americans,” said Seman. “That opens up business ownership to so many more people.  We have a low break-even point because we don’t have those upfront expenses.”

Seman says the service sector also lends itself to passion-driven opportunities. “Pet care, senior care, home care — these are fulfilling endeavors that give you a higher rate of return on your emotional investment,” he said. “Work is giving back to you, fulfilling you, instead of taking from you. Plus, the service sector allows you to really create the environment and culture that may be lacking at your current position.”

Additionally, consumer demand is growing across the board when it comes to services. For example, the $595 billion home services segment has grown significantly over the past two years, and the $97 billion senior care industry is growing just as fast. With over 28 million small businesses in the U.S., business coaching is an $11 billion industry growing at an average rate of 2.6% a year. Regarding the $95.7 billion pet products industry, Americans spend over $36.9 billion a year on pet food and treats alone — and that’s not even counting grooming. As a result, several service concepts have proven to operate within recession-proof segments. 

“Our franchise service brands are perfectly positioned for both good times and bad,” Seman said. “No matter the economy, people need to always care for their homes, aging parents, pets, and small businesses. All of these segments lead back to the overall demand for services in general. With very low unemployment, people are busy, and all our businesses allow them to free up their personal time by hiring others to handle services.”

Additionally, Seman says service concepts appeal to a broad demographic, which allows franchisees to tap into even more of this market share. “The baby boomers have always been a do-it-for-me generation, and now they need these services more than ever,” he said. “Millennials and Gen Z have also traditionally hired out for the services they don’t want to do.”

Overall, service franchises can be an attractive choice for entrepreneurs looking to enter the franchise industry right now. “The beautiful thing about franchise ownership and the service sector is that you get to determine your own success,” said Seman. “No one can tell you otherwise. You can hire who you want and create your own culture, and there is so much room for you to grow with support all along the way. As the service industry continues to boom, the time has never been better to come aboard.”