How To Choose the Right Service Franchise

You’ve already decided that a service franchise makes sense for you, and you know what you’re looking for in the opportunity. Now, it’s time to narrow down the options. While service franchises can be lucrative opportunities and a great fit for many lifestyles, choosing the right one is critical.

“There are a lot of services out there, and they work really, really well with franchising. So first and foremost, I want you to know that the service industry is very large,” said Amanda Berry, a franchise consultant with FranNet. “What type of business structure best fits your lifestyle? What can you afford — not just on paper, but what is your heart going to allow you to afford? If an opportunity doesn’t fit those two requirements, it’s not really worth the time it would take to look into the opportunity.”

While this filter can narrow the pool of options significantly, the options are still plentiful. One of the best eliminators will be territory. Some people are willing to move for an opportunity; other franchises allow remote or absentee ownership, and some opportunities will require the franchisee to be geographically close.

After these technical considerations have been made, Berry poses a few questions. While they may seem unrelated, they can reveal some important requirements of prospective franchisees.

• Why did the founder establish the business?
• Will you be paid by the customer/client or a third party?
• Are you willing to hire a high school student?
• Do you like to be a hero?

Why Did the Founder Establish the Business?

“I think the founder story can be very important, and it really goes back to culture,” Berry said. “If you want to go into a service business that deals with cleaning up dog poo, which there are several in that industry, you need to be able to connect with the founder or CEO of that company.”

In many service franchises, business operations don’t always directly reflect the passions of the founder. In a pet waste removal model, likely, the founder was not necessarily passionate about removing waste. Rather, they may have been a dog person, had their own pets and realized the practical need for the service. 

Being able to relate to the founder, leadership team and other franchisees on the basis of a shared passion can mean a lot for a prospective franchisee.

Will You Be Paid by the Customer/Client or a Third Party?

This is another factor that may not seem important in the early investigative stages. However, being aware of who will be paying you is important, especially when you’re working to recoup your initial investment.

In some service concepts, the customer or client pays. In other cases, the payment might come from an insurance company, for example, which can be a drawn-out process.

“Obviously, if you’re getting an insurance type of service industry like roofing or HVAC, oftentimes those things don’t pay out for 60 days or so,” Berry said. “Being comfortable with that, or being willing to house a billing department to deal with customers who may not pay or attempt to pay late, is an important distinction. I’ve actually had clients make decisions on businesses based on the payment structure, how they get paid and what they would be expected to do if they weren’t able to collect on a bill.

Are You Willing To Hire a High School Student?

“My favorite question is, ‘Would you hire high school students?’” she added. “If that just freezes you, that’s a big differentiator and can help to determine what type of service business you’re going to go into.”

Someone who is petrified by the idea of hiring a teenager should likely look to service models that will employ skilled laborers. Models that focus on electrical or plumbing issues, for example, will need to employ well-established electricians and plumbers. On the flip side, things like a pet grooming service or doggy daycare may have the flexibility to hire younger, less experienced workers. 

“Some people love to have a business that allows them to help mold young people. If that’s something that speaks to your soul that you’re passionate about, it should be a factor,” Berry said. “You might not be passionate about picking up pet waste, but you’re passionate about providing teenagers with a job that’s not in the restaurant space, for example.”

Do You Like To Be a Hero?

This answer is intertwined with lifestyle preferences. If someone is looking for a straightforward 9–5 job, they should choose a steady service model. However, there are spaces like disaster relief that are 24/7. While franchisees must be a bit more flexible to take on that responsibility, it can be incredibly fulfilling for the right person.

“If you’re one of those people who likes to problem solve, help people and be a hero, that’s a great business for you. Everyone is calling you on one of the worst days of their lives, and you get to come in and fix it,” Berry added.