What To Look For in a Service Franchise

Service franchises are appealing to many prospective business owners because of their flexibility, lower initial investment requirements and often person-first missions. After evaluating the different franchise models and deciding that the service sector is the right fit, it’s time to get into the nitty-gritty details of each franchisor.

Blake Martin, a franchise broker with FranNet, explained that some form of a self-assessment tool is a great place to start.

“Every candidate is a little bit different, so we try to build in all the criteria, and the most important ones, typically, are the soft skills that a prospect has developed,” he said. “As you know, what franchisors do really well is to show you how to do “the stuff” — how to make the burgers or how to staff the medical facility. But you’re going to need certain skillsets that can’t be trained. They need to come with the owner.”

Human resources skills, marketing, sales or logistical thinking are harder to train. Entering into an opportunity that will cater to your already-strong skills, rather than one that will require you to build soft skills while also managing the technicalities of opening a business, will make the whole experience more enjoyable.

“Let’s start with a discussion about what your strong, soft skills would apply well to, and we can begin to narrow within the service franchises based upon which of those really match well with the skill sets that you can bring to the table and are willing to implement,” Martin added.

As you make your way down the funnel, another important thing to evaluate is the financial realities of each option. 

“Like every other franchise opportunity, you’re going to get a chance, several steps in the process, to really dig into the numbers. Look at the disclosure document and validate with local franchise owners,” Martin said. “If you’re working with us, you’ve built a template for what you’re looking for as far as return on investment and income generation and what you’re willing to invest into the business.”

And, even if you aren’t working with a broker, you should have established these expectations independently when you began the search. As you examine the options in front of you, their financials must align with what you see for your future.

“You have to be disciplined about not apologizing for letting go of opportunities,” Martin explained.

A helpful parallel here is the story of someone who accepted a job offer with a compensation package below their expectations because they were excited about the company or just loved the hiring manager. While this can be an exciting transition, that person will likely feel a bit of regret once the newness has worn off or when things get challenging at work.

Martin added that investing in a franchise is a huge life decision, and having someone to keep you accountable for what you have said really matters is critical. If you say you’re searching for a franchise opportunity that will replace your current income within four years, don’t apologize for walking away from a brand with a disclosure document that indicates that will not be possible.

“I see folks who are really excited about the service that’s offered. They’re excited about helping a hospital be more effective and can’t wait to get into a medical staffing franchise, for example,” he said. “And they start making excuses or justifications for things that maybe don’t line up with what they’re looking for in a business. They justify it because they’re ‘going to love doing the business.’ Well, hopefully, you will continue to love it, but you should really think through what it’s going to look like to be the owner.”

All in all, there is no single financial indicator that a prospective franchisee should look for in a franchisor, but you should always be looking for a franchise opportunity that aligns with the financial goals and requirements you have identified as being important.

Lastly, if the pool has been narrowed to just a few options that feel equally intriguing, Martin says the best way to make the final decision is to weigh your goals and values. If you have five primary goals or values, for example, list them in order of importance and think about how each franchise opportunity stacks up. Assigning a point value and working through this exercise is a great way to get more of a quantifiable answer that tends to give prospective franchisees a bit more peace of mind.

Again, there is no single right answer. Rather, you should be certain the franchise is the best fit for your unique vision.

“The big picture response is that, like a lot of things in franchising, this is typically a lot broader and deeper,” Martin said. “Don’t get yourself concerned about what will happen if you let go of an opportunity or aren’t sure if something is exactly the right fit. Continue digging and continue searching. There are a lot of options out there in the franchising space, and what you want to do more than anything is to eliminate buyer’s remorse. Oftentimes, the best way to do that is to compare and contrast and be very judicious and patient about the process.”