Think Twice About 'Ick' Franchises — The Surprising Benefits of Service-Based Businesses Learn why industries like roofing, pest control, and home care might perfectly fit your entrepreneurial goals.
By David Busker Edited by Carl Stoffers
Key Takeaways
- Industries often dismissed as unappealing, like drain cleaning, pest control, and roofing, provide essential services with consistent demand across the U.S.
- Compared to storefront franchises, service-based franchises often require lower initial investments and have lower fixed overhead costs.
- Many service-based franchises offer robust support, including call centers and back-office services.
Opinions expressed by Entrepreneur contributors are their own.
When you hear the term "franchising," very few people picture a glamorous lifestyle. Fast food? Cleaning services? Home care? No, thank you. Often there's apprehension or hesitancy associated with that all-powerful "ick" factor.
Long before entering the world of franchising, I was working in corporate America when a franchise consultant approached me about franchising opportunities. Was I happy in my corporate career? No. But it was stable, right? It was the "smart" choice. The "right" choice. Okay, maybe the "conditioned" choice is more accurate. But still, I was in my late forties and had chosen my path.
It wasn't until a friend who owned a franchise decided to sell out in a multi-million dollar deal that my ears perked up. It never occurred to me that franchising might scale like that. I decided to give franchising a real look and dig into the research. Now, having owned a franchise myself and having worked in the industry for eight years, my perspective on many "ick" franchise industries has changed dramatically. Are drain cleaning services, roofing repair, and pest control "sexy" now? No, but I'll worry about that perception as I watch my kids graduate from college debt-free and my retirement savings grow.
So what makes these "ick" franchise industries so valuable?
Unlimited demand
Consider franchises that offer home care services. Think drain cleaning, house cleaning, pest control, plumbing, HVAC, electric, lawn care, junk removal, etc. These service-based companies offer evergreen services that people need in almost every corner of the United States.
No matter what, home ownership, apartment management, or commercial development means ongoing maintenance that requires specialty services. Specialty services that are frequently provided by a local franchise brand with national recognition.
Recession resistant
Working hand-in-hand with the unlimited demand, regardless of what's happening in the economy, many services are not a "nice to have" but a "need to have." Medical waste removal? Senior care? Child care? If you think back to the thick of the pandemic, there were a plethora of services that were in-demand regardless of lock-down.
A variety of franchise brands that offer these vital services and many more were in the mix supporting people who needed care. Time and again, I've seen how services that are frequently shrugged off with the phrase "someone's got to do them" overlap with franchise industries.
Related: Greg Flynn Owns 1,245 Restaurants and Makes $2 Billion A Year. Here's How He Did It.
Low Initial Investment
One of the main benefits of service-based franchise businesses is the relatively low-cost barrier to entry. These brands do not require a storefront or customer-facing real estate, and the service itself is provided at the customer's location.
It's worth noting that not all franchises are synonymous with "ick" – consider boutique fitness, salon services, pet motels, etc. However, these location-based businesses that include retail storefronts where the customer receives services at a fixed-base location are often associated with higher initial investment costs.
Lower Fixed Overhead
In addition to low initial investments, service-based brands often have a lower fixed overhead cost. In contrast, location-based brands (think salons, boutique fitness, pet care, etc) often have higher fixed overhead costs — which can have more competition because these are passion-based industries.
Let's consider a niche franchise that provides roofing solutions for a particular territory. As the franchise owner, you're getting called to do that service on a need basis. However, as roofing is a large ticket item, it isn't a frequently recurring service. In this business model, you may only need a salesman – possibly the franchise owner – and a project manager to see the installation through. As for the labor, in this model, it can be provided by hired contractors, keeping the fixed overhead cost low.
In fact, many of these project-based service brands have contractor models which means you aren't spending on labor without contracts to fill. This model helps you get to profitability faster without increasing your overhead costs.
Franchisor Support
One of the many benefits of working within a franchise system is the ongoing support you'll receive from the franchisor. While every reputable franchisor will assist with initial set-up and operations, service-based franchisors frequently include additional services like call centers that provide back-office support. They may assist in scheduling customer visits, determining which services are needed, and more. This cuts out the need for you to hire an in-office worker, allowing you to be more time-leveraged and can even allow you to retain your corporate job while building your franchise business.
Since becoming a franchise consultant, time and time again I've seen initial resistance to a particular industry dissolve into possibility. The "ick" factor is real, and while you should never get into an industry that you can't get behind, it's important that you aren't letting an initial hesitation discourage you from pursuing a business opportunity that supports your professional goals.
Related: Want to Become a Franchisee? Run Through This Checklist First.
