Does a Service Franchise Make Sense for You?

Investing in a franchise is a strong contender for many people looking to gain financial freedom, experience entrepreneurship and have an increased sense of ownership of their future. However, within the franchising space lie many different types of businesses. In this buffet of options, how can you know what direction to take?

Service franchise opportunities are generally a good fit for people with a few specific goals or business requirements:

• Low fixed costs
• Low capital investment
• Daily flexibility
• Long-term flexibility and the potential for absentee ownership

Blake Martin, a broker with FranNet, says that the franchise selection process should always begin with the end goal in mind.

“Let’s talk about everything you’re trying to achieve with a business, even before we know if a service franchise is right for you,” he said. “But, what I'm listening for in this conversation is someone who says they’re looking for a flexible lifestyle and a business that they can eventually build up and have a team operate without feeling the need to be there or be worried about damage to physical assets — something they can run more virtually.”

Many service concepts require either no brick-and-mortar location whatsoever or a very small one with no retail space. This alone reduces the initial investment substantially, making a service franchise much more accessible to those without heaps of disposable cash available.

“Another key thing is the ability to grow a business outside of four walls,” he added. “So, if someone says, ‘I don't want to own 18 locations, but I want to be able to continue growing this thing without having to continually reinvest in massive capital infrastructure,’ they’re likely a great fit for a service concept.”

Moving beyond the constraints of four walls also allows owners to have a bit more control over their financial futures and the success of their businesses. The daily and long-term flexibility that inherently accompanies service franchise concepts allows owners to use their own judgment in terms of how much time, money and labor they put into the business. In turn, they have more control over their growth.

This flexibility, however, comes with a caveat. Depending on the size and needs of the operation, employee requirements will vary, and this can present its own challenges.

“Unemployment rates are at record levels, and of course, that’s on everybody’s mind right now,” Martin said. “So understanding what that looks like and whether you’re willing to take on an HR and recruitment role is important. There’s also the owner’s role in general. What is the successful owner going to need to be able to do and want to do in this business? It could be a lot of hats that you’re wearing.”

As a service franchise owner, Martin said, you can’t view yourself as too good for any part of the work. In the early years of the business, owners tend to take on a lot of responsibility doing things like sales, marketing and even day-to-day operations. 

The flexibility of a service model is great, but it’s important to understand that that flexibility can go both ways.

“When we’re profiling people, we’re considering whether you’re the type of person who is looking for a more stable business, and it’s not so important that it’s something everybody sees as your business,” Martin added. “Maybe you don’t care if it’s anything glamorous at all. You don’t care if people have a great meal at your business; you just care about more time with family. That’s when we start funneling more towards service-type businesses.”