If you’re considering tapping into the estimated $400 billion dollar home services marketplace, this report is an ideal place to start your research. All the home services franchises featured are ranked highly by their franchisees. You’ll also hear from franchisees about their experiences and learn how to find the best franchise for you. While most of the content of the report is pasted below, in order to to see the list of 2016’s Top Home Services Franchises, you must click on the report above or download the full report in PDF format and go to page 6. The full report contains a lot of helpful information that is not featured below such as how satisfied home services franchisees are on page 5.
Dual Income Families and Maturing Baby Boomers Are Positively Impacting the Home Services Franchise Industry
Outsourcing work inside and outside your home may seem extravagant and like something that would be eliminated if a recession arose. Many time pressed homeowners whose schedules are consumed by work, family, and other obligations, however, realize that doing so can end up saving them so much time that the cost is worth it. In addition, since things in the home break, get damaged, or wear out and homes need to be regularly cleaned and grass keeps growing, there is a constant need for upkeep. These factors and more have led to an explosion of home services franchises, which encompass an array of ongoing services such as home repair, carpet cleaning, landscaping, and house cleaning as well as those that are needed periodically including moving, concrete and HVAC services.
Not all home services franchise concepts are a wise investment. Brand recognition, startup costs, market demand for the product or service, franchise fees, potential revenue, and contract provisions are just some of the factors you should carefully consider. Sorting through the variety of opportunities that are available to identify which one is most likely to meet your financial and personal objectives can be overwhelming. That’s where Franchise Business Review comes in. We surveyed over 3,200 franchisees from 46 different brands, to identify the home services franchises with the most satisfied franchisees. If you’re interested in purchasing a proven home services franchise that will empower you to be your own boss or to diversify your investments, our list on page 6 (see full report above) is a great place to begin.
FACTORS CONTRIBUTING TO DEMAND FOR HOME SERVICES
Although the home service market tends to consist of a variety of smaller ticket items, they add up. Estimates say the overall addressable home services market size is estimated to be between $250 billion to $400 billion. There are several key factors driving the marketplace.
Two-parent households in which both parents work full time now stand at 46% and the median household income for families with two full-time working parents is $102,400. The rise in duel income families makes it more necessary, justifiable, and affordable to outsource home-related tasks. After all, if you’re working 40 hours a week, it’s hard to find an additional 17, which is the average number of hours spent by married women per week on housework.
Maturing Baby Boomers, Americans born between 1946-1964, are 76 million strong nationwide and control 70% of all disposable income in the United States. 45% have a disposable household income of $100,000. Many are placing an increasing priority on enjoying life, which includes outsourcing the burden of maintaining their homes.
NO EXPERIENCE NEEDED
Many people think that because they don’t have a formal education, a lot of business experience, or a particular skill set that their options for business ownership are limited. There are, however, many opportunities in all areas of franchising including home services which are ideal for individuals who bring an entrepreneurial spirit and stellar work ethic to the table. This is because the franchisor has developed a proven system that you can simply execute after going through their training program and with their ongoing support.
“Balancing all the different hats running a small business requires is challenging for franchisees, but we help ours learn how to run a business, do the technical work, and execute our marketing plan,” says Jef Flournoy, V.P. of Sales & Development, at ASP Franchising, which serves pool maintenance and repair needs. The average gross revenue of ASP’s franchisees, including all franchisees who were open for the full 2015 calendar year, was $504,352 according to Flournoy.
“CertaPro Painting provided me with all the tools, programs, and support to get me off the ground,” says Chris Drucquer, owner of the CertaPro Painters franchise of the Main Line (Bryn Mawr and Narberth, PA). “Now I appreciate the leadership training, programs designed to grow my people, recruiting resources that help me find and hire the best people, a marketing juggernaut that drives leads, and systems that continuously improve our service.”
Since homeowners are increasingly willing to outsource the upkeep of their homes both inside and out, many home services providers can count on repeat business from the majority of customers. This recurring revenue allows them to focus on growth, which builds equity as well as revenue for the franchises they own.
“It really took just several months to break even. I was profitable the first year,” says Drucquer. “You need to choose to either grow quickly and be profitable faster or to not work as hard and to have a better quality of life in the beginning. I chose to work very hard, and after five years I had it all.” In 2015, Drucquer reports his gross revenue was $2.3 million. In 2016, he says he anticipates it will be at least $2.6 million. It is important to note, as mentioned earlier within this report, that Drucquer owns a large territory in Pennsylvania. He further advises franchisees to be sure you know where you want to go and what you want to accomplish and to share profit goals with your franchisor.
“I broke even within the first nine months and was profitable within a year,” says Scott Frederick, who purchased a Pillar to Post Home Inspectors franchise in St. Louis, MO with his wife Megan in 2013. Frederick says his 2015 gross revenue was $350,000 and that he projects it will be $525,000 in 2016.
The average pre-tax income of the franchisees at the brands featured in this report is $86,000.
It is important to note that not all franchisees within a system are equally successful since success is impacted by a variety of factors including location and business acumen. Also, it’s essential not to equate business gross revenue with personal income. In most cases, a franchisee’s personal income is significantly lower than the profits that their business generates. We believe having a solid understanding regarding how much money you may make by investing in a franchise is essential, so created a three-hour online course entitled “How Much Money Can I Make?”. It is available as part of our Franchise Buyer’s Toolkit at FranchiseBusinessReview.com/toolkit. It is interesting to note that when we looked at all 46 brands we surveyed for this report and pulled out the 10 that generate the highest median pre-tax income for their franchisees, that only half of the 10 made our list of top home services franchises on p. 6. This highlights what we have observed over the years— that satisfaction in franchising is based on more than income. The companies that were among the 10 brands that generate the highest pre-tax income for their franchisees and made our list are Two Men and a Truck, FRSTeam, Critter Control, CertaPro Painting, and Miracle Method Surface Refinishing.
Since the cost of outsourcing most home services is a relatively small portion of consumers’ disposable income, they tend to be among the last to be cut should finances need to be reigned in. The fact that many home improvements also result in enhancing both property value and make homeowners feel proud of their property, also helps home services providers weather tighter economic times.
WIDE RANGE OF INVESTMENT OPTIONS
The minimum investment for the franchises on p. 6 ranges from as low as $10,750 for an A All Animal Control franchise to $178,000 for a Two Men and a Truck franchise. The investment range is influenced by a variety of factors including how much equipment is required and if the business can be run out of one’s home or must have a brick and mortar location. The median investment range for the brands featured on our list is $151,000.
FRANCHISING VS. STARTING YOUR OWN BUSINESS
If you are pondering starting your own home services business from scratch, consider the following advantages franchising offers. You are in business for yourself, but not by yourself. You’ll receive your franchisor’s support in a variety of crucial areas including training and operating procedures as well as marketing.
“Owning a Two Men and a Truck franchise allows us to be part of a nationally established business,” says Mara Crofoot, who owns her Two Men and a Truck franchise in North Michigan with her husband Jeff. “We also receive a lot of support from the corporate office. In the beginning we particularly appreciated the technical and the personal franchise support. Now, we are benefitting from the support we are receiving to achieve corporate’s vision of where they want Two Men and a Truck to be in the future.”
“I like the idea of being in business for myself, but not by myself,” says Drucquer of CertaPro Painters. “I work hand-in-hand with other successful CertaPro owners and learn from them how to improve my company.”
“We have always said that while the systems we obtained from DreamMaker were helpful, the most valuable thing we received early on was the basic mind set and approach to the remodeling business. They were able to get us thinking about the business in the right way right off the bat, which probably moved us years down the road from where we would have been on our own,” says Lee Willwerth, co-owner of the DreamMaker Bath & Kitchen franchise in Ann Arbor, MI.
You’ll have a proven system to follow.
A franchise provides you with an out-of-the box business model that is ready to be implemented as soon as you complete training. All you have to do is to adhere to the established guidelines. If you are someone who has a difficult time following a system established by someone else, franchising is likely not a good fit for you based on the feedback we hear regularly from both franchisees and franchisors.
“Be ready to follow a system. Many of us come from previous careers where we were taught that being innovative was a sure fire way to increase your value in the business world. I would never want to stifle someone’s creativity, but when you own a franchise it should be run within the context and framework of the system you PAID for,” says Jon Mittleman, who owns a Fish Window Cleaning Services franchise in Alpharetta, GA.
Your business brand will be recognized.
Since the franchise brand is already recognized by customers, they know it offers consistency and appreciate the familiarity it provides.
Your risk will be reduced.
If you have done extensive due diligence including reviewing the Franchise Disclosure Document (FDD) and talking to franchisees in order to identify a strong franchise brand with a proven business model, your chances of building a successful business are greater than if you were starting one from scratch.
The business will likely have a higher resale value.
Prospective investors tend to favor known brands. Franchises typically fetch a higher resale price than a mom and pop business, and most franchisors will assist you in finding a buyer.
DRILLING DOWN TO THE BEST BRAND FOR YOU
While browsing the home services franchise opportunities in this report, you may find you are tempted to pursue many of them. Doing the following will help you narrow down your choices to three or less.
Consider your interests or skill set.
There is a home services opportunity available for almost any interest or skill set. While many franchisees invest in a concept they have had prior experience with, others do not since most franchise models train them how to do the necessary work while others enable them to be in a management position from the get go and to outsource the work.
“My advice is to first identify your skill set and your interests. Be passionate about your industry,” says Frederick of Pillar to Post Home Inspectors.
“My previous experience was working in financial services, banking and sales. I also have an MBA with an emphasis in entrepreneurship,” says Michael Kugler, who purchased his The Glass Guru glass and window repair franchise in Austin, TX in 2009. “As a business owner, I’ve found my past experience to be very helpful when it comes to sales, organizing the business and planning for its growth, and maintaining a good understanding and control over key numbers and financials.” Kugler says his gross revenue was just over $1.3 million in 2015 and anticipates it will be between $1.7 and $1.8 million in 2016.
Try the culture on for size.
Being a part of a franchise is often compared to being part of a family since you will interact regularly with corporate team members and fellow franchisees. It’s a good idea to ensure that you can envision yourself doing so for years to come.
“Before you sign the franchise agreement, meet at least 10 people in the company both from the corporate office and franchisees to see if you fit their culture. See if they feel a similar way about the company, which if the feedback is positive is a good sign, or if they all have different stories. You want to hear that to be successful you just have to follow the program,” says Drucquer of CertaPro Painters.
“We were impressed by DreamMaker’s focus on their Code of Values and their intent to follow it daily to the best of their ability,” says Willwerth of DreamMaker Bath & Kitchen. “When getting into business with another organization, you will certainly not agree on everything so you better be sure that you trust the character of the organization and its leadership and know they will always have your best interest in mind.”
Be sure the finances work for you.
You need to understand what you can afford to invest in a franchise and still be able to live the way you are accustomed to until it is profitable.
“Before you purchase a franchise, do everything possible to understand the financial prospects of the business model, and make sure you are being liberal with your assumptions of the cash required to start the business. Always assume it will take more cash and more time than you think to get to profitability. It takes time to learn the ropes in a new industry,” says Willwerth.
“Be sure to be capitalized well enough. Even if you think you don’t need the money, and frankly, you may not, it is better to be prepared and be overfunded than underfunded,” says Mittleman of Fish Window Cleaning Services. “I have seen too many people try and continue to take a salary in year one because they need the income to live their existing lifestyle. If they are taking the money from a company that is not profitable, it will quickly catch up to them.”
When it comes to financing your franchise, many franchises facilitate third party financing and a few provide financing themselves. Home equity loans, 401K rollovers, and loans from friends and family are popular options for people purchasing a franchise for $100,000 or less. Small Business Association (SBA) backed loans and conventional bank loans are commonly used to purchase more costly franchises. Be sure to ask if the franchise you are interested in offers any discounts for minorities or veterans if you qualify. Our Franchise Buyer’s Toolkit provides a detailed franchise funding walkthrough as well as other tools that will help you successfully navigate a franchise purchase. We also offer a full suite of financing services to ensure you get the capital you need at FBR50.com/franchise-financing-options/
Speak with the franchisor.
Contact the brand’s corporate office to find out what the investment requirements are and what kind of training and support you would receive. It’s a good idea to also ask what they feel makes their top franchisees successful as well as what their advantages are over competitors. You can reach the corporate office of many of the brands featured within this report, both those in the home services and other sectors, via FBR50.com.
Carefully analyze the FDD.
Read the FDD of any franchise you are considering very carefully. It outlines what the franchisor will do for you and what they expect of you. We suggest you consult with an established franchise attorney in order to ensure you understand every aspect of it. An in-depth breakdown of the FDD, presented as on-demand video segments, is featured in our Franchise Buyer’s Toolkit.
Get feedback from franchise owners.
The most valuable feedback will come from those who know the most about the franchises you are considering—those who own them. Spend time looking at the franchises on our list on p.6, all of which have satisfied franchisees. Many share their full franchisee satisfaction survey results at FranchiseBusinessReview.com, which provide valuable insight into their systems. Also, be sure to speak with a minimum of 12 franchise owners. Once a franchisor determines you are a qualified candidate, you’ll be provided with franchisees’ contact information.
WHAT TO EXPECT DURING YOUR FIRST YEAR IN BUSINESS
Your first year in business will most likely be the most challenging since you are getting it up and running. In addition to adhering to the business model, you’ll have to work hard to strategically promote it via marketing, participating in community events, networking and other means in order to be noticed in your market. Once you have customers, you’ll have to meet or exceed their expectations. To help you understand what to expect, we asked several franchisors and franchisees to share their observations of or experiences as new franchisees.
You’ll likely work long hours initially.
“When I first started, I was working full-time and felt I needed to in order to get my income where I wanted it to be as quickly as possible. I rarely took a vacation because I was worried about things falling apart since I was managing the day to day,” says Mittleman of Fish Window Cleaning Services. “Now that I have the right people in place, I take a lot of long weekends, can coach both of my children’s sports teams, and focus more on long term objectives in my business.”
“The first three to four years in the business, I was easily working 60-80 hours per week, usually arriving home at around eight during the week, and having to catch up on things on Saturday. I could rarely afford to be gone more than a day or two, so my ‘vacations’ were essentially long weekends,” says Kugler of the Glass Guru. “Today, I have a pretty good work/life balance. I almost never work weekends and my workdays are usually 8:00am to 6:00pm or 6:30pm. I also have the personnel in place that allows me to comfortably get away on vacation without affecting the day-today operation of the business.”
Focusing on establishing your business and putting a team in place will be key.
“Establishing your business in the marketplace and building the core business team are both typical challenges franchisees initially face. In most markets, there are businesses operating in your category, which means you will have to attract customers away from them. This is often a battle that cannot be won immediately,” says Jim Nicholas, President of FRSTeam, which specializes in fabric restoration. “Putting a strong team foundation together from the outset will provide long-term stability across every aspect of your staff structure. In many cases, those franchisees that find the right manager or salesperson see immediate results, whereas those who struggle to find people for those key roles see their business limp along. Franchise systems, like ours, that provide training support, peer support, field support, and even financing support during that first year help bridge the gap.”
Following the franchisor’s system will be a crucial element of your success.
“Follow the systems, work smart on business development, and be a good listener,” is what Flournoy of ASP Franchising recommends.
Flournoy’s advice is reiterated by DreamMaker Kitchen & Bath franchisee, Willwerth, who says, “Once you own the franchise, follow the systems to the letter before you even think of deviating from or improving on them. Too many franchise owners think they can pick and choose which systems they follow and this is nearly always to their detriment.”
BUILDING YOUR DREAM CAREER
A home services franchise, if you conduct extensive due diligence to ensure you are choosing a proven brand that is a good fit for you, may well enable you to achieve the lifestyle you are seeking. The franchisees who invested in the brands featured in this report certainly seem happy. 87% say they agree or strongly agree that they enjoy operating their business.
“I am fully in control of my life—when I work, what hours I work, how much money I make, etc. It is very empowering,” says Drucquer of CertaPro Painters when asked what he enjoys most about owning his franchise.
“I like knowing I am in charge of my own destiny. I am motivated every day to perform, and am never bored since there are many aspects of the business I can work on,” says Mittleman of Fish Window Cleaning Services. “I’m also happy when I come home. I used to be miserable when I would arrive home from working for others and would not be fun to be around for the rest of my family.”
The demand for home services is strong and will continue to be. It’s a market with consistent need. If you can visualize yourself owning a home services franchise a good place to begin your search is our list of top brands on p. 6. Check to see if the brands you are interested in share their franchisee satisfaction reports at FranchiseBusinessReview.com. If they do, you’ll learn a lot about their leadership, culture, training and support, financial outlook and more.