What kind of service franchise is best?
In this article the author will discuss what, in his opinion, is the best service franchise to own, and other topics, such as “What is the best franchised business to own during an economic recession in the United States?”
Should I buy a service-based business or a brick and mortar franchise like fitness, food, or entertainment?
What kind of home-based franchise is best for a small-operator or a medium sized operator?
- The challenges of a carpet cleaning franchise
- Low up-front revenue. The first thing you might notice about a carpet cleaning advertisement is the emphasis on price. And low price at that. For some reason, carpet cleaning in the United States has a tremendous emphasis on one simple thing- how expensive- or rather how inexpensive- the price is.
- Loyalty problem. People go for the lowest price and seem to always ask for a deal rather than recognize the quality of the service they are shopping for. There are a few ways for a good carpet cleaning franchisee to make money, however.
- Physical & menial work. It is very hard physical work to clean carpets, and the constant challenge the carpet cleaning franchisee is overcoming is the emphasis on price and discounts and coupons.
- Fees on chemicals. Another challenge faced by carpet cleaning franchisees is the constant cost of products purchased from the franchisor, all of which are typically marked up by the franchisor. These challenges drain the excitement and energy out of the daily life of a carpet cleaning franchisee.
- The struggles of maid franchises, home cleaning franchisees, and janitorial service franchises.
- Keeping laborers. While the benefit is that a low-skilled person can execute the business well operationally, it is also true that these workers usually need management, and oversight.
- Management of people is “the thing.” Understanding the management of these workers is only one aspect- another challenge is properly paying and training the workers.
- Marketing. Another challenge is the marketing- it seems wide and diverse search on Google happens these days to bring in a cleaning customer.
- Known margins. Overall there is a fixed expense to operating the cleaning side of the business, labor and management of labor, and not a huge potential for additional revenue
During a recession the best kind of business to own is a service based business that serves people and their homes.
Why a service-based franchise is better than a brick-and-mortar franchise when a recession happens
- The Lease!
- Food franchisees that use buildings or storefronts will be challenged when the next recession occurs because they will have to continue to service their lease for real estate space.
- Entertainment franchises that require real estate, will also be strained when the next recession hits, and the lessee must continue to pay the lease even though the customer base is not there anymore.
- Fitness franchise concepts that use stores or shopping mall spaces are all going to experience strain when the recession of 2020-2021 occurs.
- Lease re-negotiation is expensive and may not be possible!
- The strain of human stress during an economic downtime is tremendous on a franchisee who signed a lease as personal guarantor. If you signed a lease, you signed a contract, and you are liable. Why put yourself in a bind when you know an economic recession is coming for business? Be smart, recognize the signs, recognize the articles online and on Google and heed the warnings.
- Beware of signing a multi-year lease when we are at the top of a peak economic cycle and all the warning signs are present that a recession is coming. Nobody wants to hang the sign up on the building announcing the closing of a business.
Nobody wants to hang the sign up on the building announcing the closing of a business.
What is the best franchised business to own during a recession?
During a recession the best kind of business to own is a niche service, home-based business that serves people and their homes. If possible avoid the highly competitive space of some home-service concepts, such as those mentioned above.
Consider our opportunity- serving America’s chimney and fireplaces.
This unique franchise is a niche service, is home based, and serves people in the home maintenance and repair category.
We encourage you to call or email or fill out the form on this website to learn more about our unique niche serviced based chimney service franchise concept
When does it make the most sense to start and run a Midtown Chimney Sweeps Franchise business?
- Traditionally home-based, service-oriented franchised businesses will pick up and thrive when the economy experiences a downturn.
- Brick and mortar concepts will experience a challenge. Getting people to be motivated to get into their cars and drive to your retail location and spend money on anything is a potential challenge to their budget.
- Instead of upgrading to a new home, during a recession, people will tend to retain their existing home and remodel it or maintain it.
- In a recession, cash is tight. We cannot upgrade our homes because we are holding on to our cash and do not see promotion in our future at our job, so we take a conservative economic stance with our home budgets.
- Stores begin to close, articles are written, like this one which predicted thousands of retail store location closings in 2017 in the US, and it feeds the panic and nervousness. So we button down the hatches and stay home, maintain what we have and focus on keeping the cash that we do have.
In summary, it is the author’s opinion that niche-oriented, home-based businesses that maintain people’s homes are going to be the winner during an economic recession.