Why the Remodeling Industry Makes Sense as a Franchise

There was a time, not long ago, when home renovations slowed to a trickle, with homeowners wary about making anything but the most essential fixes. Now, they are not only willing to spend, but to spend big.

The growing economy, rising home values, and low interest rates are giving homeowners the confidence and cash they need to raze walls, add rooms, renovate kitchens, build decks, paint siding and spend on other projects to spruce up their homes. As a result, business for contractors and home improvement companies across the country are on the upswing as the remodeling industry, crippled in the last recession, rebounds.

According to the most current National Residential Remodeling Index (RRI), the remodeling market is seeing positive year-over-year growth for the 14^th consecutive quarter. It was during Q3 2015 that the RRI reached 102.1, a 1.3 percent increase from the previous quarter and a 5.8 percent year-over-year increase.

“Activity is being driven by existing home sales that surged more than expected in September and stand at their second-highest annual rate since February 2007,” said Chief Metrostudy Economist Brad Hunter to Remodeling Magazine. “Job growth came in lower than expected in August and September, but saw a large rebound in October with some wage growth as well.”

For businesses like Kitchen Solvers, a franchise specializing in custom and pre-built cabinetry, custom countertops, solid surfaces and kitchen accessories, the uptick in home improvement has ushered in a new wave of successful franchisees. Business is booming for this 33-year-old company, and there are no signs of slowing down—year to date, they have seen nearly 15 percent growth in sales. According to Zach Nolte, director of operations for Kitchen Solvers, these numbers sharply contrast with the dark days of the recession, when spending was low, projects were few and competition among contractors was fierce, forcing companies to slash prices to win jobs and to lay off workers to cut costs.

“A swing in the economy has really changed the way people look at homeownership these days. It’s more of a seller’s market right now, so people are taking their extra money and putting it into renovating their homes—that’s where we come in,” said Nolte. “This has helped Kitchen Solvers become an incredibly reliable, lucrative and rewarding option for prospective franchisees. We have no reason but to be optimistic for the years to come.”

As for the future of the remodeling market, the RRI forecasts year-over-year growth to stay in the 5 percent range through Q1 2016 and eventually level off to an average of 3.5 percent through Q4 2017.