The Pros and Cons of Owning a Service Franchise

Service franchises offer entrepreneurs the opportunity to run a business that provides valuable services to customers while benefiting from an established brand, operational framework and support from the franchisor. 

However, as with any business endeavor, there are both advantages and disadvantages to owning a service franchise. Below, we’ll delve into some of the most common pros and cons of being in the service industry. 

The Pros of Owning a Service Franchise

One of the most profound benefits of owning a service franchise is the staying power that they offer. Unlike other types of businesses that may be subject to trends that come and go, service franchises offer things that, in many cases, consumers need rather than want. 

“When it comes to home services, the home is the most valuable asset that people own, and they want to take care of that,” said Craig McCandless, a United Water Restoration Group franchisee in McKinney, Texas. “You own the home and mortgage on it. You have to protect that investment. It's really important to make sure you get a good company, and they come in and really do a good job.” 

Meanwhile, not all, but many services franchises don’t require a brick-and-mortar storefront. This can greatly reduce the costs it takes to operate. There are often opportunities for a mobile model, which allows a business to better access its clients when bulk services are needed or when clients won’t be able to bring themselves to a retail location.

Some service businesses take a hybrid approach, which expands access even further. This allows for on-the-go services or the option for employees to bring service back to a retail location if necessary.

Additionally, service franchises give business owners and staff the opportunity to get to know their customers personally, especially when it is required to regularly visit consumers' homes. This can help create a presence in the local community. 

The Cons of Owning a Service Franchise

As for cons, one of the biggest is that, because service businesses aren’t necessarily seen as “glamorous.” They often require heavier marketing. 

“You lack the high visibility that many brick and mortar locations have, so you need to rely on more creative marketing to let people know you exist,” said Corey Elias, the founder of Franchise Captain.

Additionally, depending on the popularity of the service industry, certain markets may become saturated with multiple franchise locations offering similar services. This oversaturation can lead to fierce competition and challenges in differentiating your business. Before opening a business, franchisees need to identify the demand in their area. This is especially true if franchisees plan to go the multi-unit route. In order to open multiple locations in an area, it is important to ensure each location can be successful. 

Service franchises are not relying on a certain product; it is up to the franchisor to make sure that they are putting in the work to make their business stand out and reach its full potential. 

Measure the Pros and Cons

It is clear that there are plenty of benefits to owning a service franchise. Weigh the pros and cons to decide whether or not this is an industry that you can see yourself being successful in.