Challenges to Owning a Service Franchise, and How to Overcome Them

Opening a service franchise comes with a set of distinct challenges that require strategic solutions for success. From managing employee capacity to navigating local markets, service franchise owners must be prepared to overcome obstacles to ensure their businesses thrive.

Below are examples of common hurdles to prepare for and how to get over them. 

Managing Employee Capacity and Maximizing Efficiency

Employee capacity may be limited in a service franchise. For example, someone who tutors students can only work with one child at a time while a fast-food chef can cook multiple sandwiches at once. 

“The biggest thing that plagues service franchising is that you're only as good as the number of people that you have working for you,” said Dan Rowe, CEO of Fransmart. “The more customers you want, the more people you must hire.”

The best way to overcome this is by optimizing your staff members. If you own a hair salon franchise, for example, make sure each hair stylist is making use of their time and booking a good amount of appointments during each shift, not leaving customers sitting idle. 

Strategic Hiring

Staying in the realm of hiring, it is also important to hire the right people for the job. But this isn’t always easy and requires you to spend more time going through the hiring process. 

“If you don't hire the right people, you're gonna have chronic turnover,” said Rowe. “And chronic turnover is expensive.”

Addressing this challenge requires a multifaceted approach. Beyond assessing standard qualifications, take the time to consider the candidates' alignment with the company's culture, values and job requirements. While this may extend the timeline, the investment in finding the right fit will ultimately yield greater returns in the long run. 

Working on a Local Level

Another common challenge faced by service franchisees is growing the business on a local level. Franchisees may find it difficult to take what they learned from the franchisor and make it work in their specific market. 

“We can teach anyone how to grow their business, but we cannot make a franchise owner do the work needed on the local level,” said Adam Long, president of HomeTeam Inspection Service, a home inspection franchise with over 200 operating territories nationwide. “In any service-based, relationship-driven franchise opportunity, you must be able to manage people and network in a way that generates business.” 

The best way to overcome this? Listen to the franchisor, said Long. Franchisors often have solutions for marketing and spreading the word about your grand opening. 

“Franchisors know how to overcome the challenges that local franchisees face, and the franchisees that struggle are generally people that don’t follow the model,” he explained. “Follow the model. Work hard. You will achieve your goals with a service based franchise.” 

Ramping Up Business in a New Market

When franchisees are first getting started, they may also have a hard time getting business going. 

“A restaurant, for instance, will have a ‘Coming Soon’ sign for six months, and when they open they are busy from the beginning,” Rowe noted. “But a new maid franchise will take time to ramp up volume.” 

According to Corey Elias, founder of Franchise Captain, since service franchises don't have a prime location that is creating walk-in traffic, they need to rely on great digital and gorilla marketing strategies to ensure customers know they exist. 

“Creating first impressions can be more difficult as well, so your marketing strategies need to clearly highlight your unique personality and differentiators,” he said. 

Quality Control and Consistency

For service franchisees with multiple units, maintaining consistent service quality across multiple locations can be a significant challenge. Ensuring that customers receive a uniform experience is crucial for building a strong brand reputation. However, variations in staff performance and operational procedures can lead to inconsistencies.

To address this challenge, franchisees can implement comprehensive training programs and standardized operating procedures. Regular audits and evaluations can also help identify areas for improvement and maintain a high level of service quality across all franchise outlets.

Succeeding in the service franchising arena requires tackling its challenges head-on. By optimizing staff, making strategic hires, heeding franchisor guidance and upholding quality, service franchise owners can navigate their industry successfully.