Service Businesses Remain Recession-Resistant in the Down Economy

At the beginning of 2020, the country was experiencing one of the strongest economies in history. Then the coronavirus pandemic hit, shedding jobs in its wake. Beginning in March, the country slid into a recession and unemployment soared. 

As a result, many small businesses previously thought to be “recession-proof” have either struggled to survive or succumbed to the shrinking economy. On the flip side, with more and more Americans stuck at home, many service businesses focused on home repair, cleaning, and yard services have seen an uptick. While no business is completely recession-resistant, brands under the Neighborly parent company have shown stability or growth during uncertain times.

Neighborly is the world’s largest parent company of home service franchise brands and has more than 4,000 franchise owners in nine countries. The company was founded in 1981 as Dwyer Group and includes 24 service brands, 20 of which are franchised. Collectively, these concepts offer customers a broad base of residential and commercial services. Two of its brands, Mosquito Joe® and Window Genie®, have performed particularly well throughout the pandemic. 

Business Continues to Buzz for Mosquito Joe

Mosquito Joe®, an outdoor pest control franchise that operates in the United States, opened its first location in Virginia Beach just over nine years ago. Today, it operates in over 350 franchise territories. With more Americans spending their summer vacations in their backyards, Mosquito Joe has attracted new customers looking for itch-free environments. 

Trey Powell bought his first Mosquito Joe franchise in South Carolina more than five years ago. A career franchisee, he had owned multiple units of a tax preparation franchise for more than 17 years before switching over to Mosquito Joe.  A big fan of franchising, Powell said he first learned about the pest control company from a friend who had begun selling territories on behalf of the brand. He asked Powell if he’d be interested in ownership—Powell didn’t think he could get excited about eradicating insects, so he instead agreed to be a customer.

“They treated our yard and I couldn’t believe how well it worked. In less than a week, four of my neighbors called and got their own lawns treated,’ he said. “Then I said you got me—tell me more about this franchise.”

The buzz about Mosquito Joe spread quickly throughout his community. Within 30 days of buying his first territory in Columbia, Powell expanded into the other side of town, and then the following April, he further increased his territory to include the town of Lexington, and soon moved to that community. By the Fourth of July that year, Powell and his team had provided pest control services to 600 customers. 

Today, he runs 7 vehicles in a single territory. His business tripled by year 3. 

Although COVID sent shockwaves throughout his state and the rest of the country, Powell said this spring he experienced his best April ever in terms of customer acquisition. Despite a weakened economy, he continued to invest in marketing and advertising initiatives—and his efforts paid off.

“With vacation plans canceled and everyone stuck at home, many people realized how bad their yards were and demand for Mosquito Joe’s services went up,” Powell said.  

The pest control season typically extends through Thanksgiving in South Carolina, and Powell expects that most of his customers will continue to treat their yards over the next several months. Technicians are not required to enter customers’ homes and will continue to wear masks and practice safe health practices—but aside from that, it’s been business as usual.

“People have said that they’ve given up a lot of things due to the economy, but they aren’t giving this up. It’s a good lesson for us that this service is more of a necessity than what you’d think,” Powell said.  

Being a part of the Neighborly network has helped bring awareness to Mosquito Joe as customers continue to search for services through Google or other means. Powell said he doesn’t think Mosquito Joe has begun to find the ceiling on its market share, as awareness of pest control services has only recently begun to grow. There are many customers who didn’t know it existed, he said.

Window Genie Cleans Up  

Like Mosquito Joe, Window Genie is in the home improvement business with franchise owners who have seen gains as a result of stay-at-home orders. Window Genie offers window cleaning, window tinting, pressure washing, gutter cleaning, and holiday light services to customers in over 135 locations throughout the country. About 80% of its customers are residential, and the other 20% include commercial properties that are three stories or less.

Ryan Kenimer of Lexington, Kentucky bought a Window Genie franchise in 2018 after having been a customer for three years. When he discovered that the franchise in his area was available, Kenimer decided to invest in it. Already working as a full-time real estate agent, he saw potential in the business—which has since grown every month since he took it over.

“My gut reaction is that there is more demand—interestingly enough, there’s more competition, too,” he said. “We saw numbers in March and April go down, then saw a sharp recovery in May and now we are up in June from last year. We are also up on the year.”

Kenimer employs nine technicians and two office administrative staff members who work out of a combination office/ warehouse he leases. He owns six trucks and always operates four at full capacity. Right now, he estimates he provides services to more than 5,000 customers between the months of March and December.

The coronavirus hasn’t taken a bite out of his business. Most of the services can be completed on the exterior of homes, and when technicians do go inside, they wear gloves and masks and follow all safety precautions, Kenimer said. Overall, he thinks a recent uptick in local competition will be good for the brand. If the smaller businesses drop out of the market as the economy picks up steam, Kenimer expects new customers will default back to Window Genie, which has been franchising since 1998. He thinks now is a great time for investors to make the leap.

“People who have been laid off have a new opportunity. Often the hardest part of someone making the leap into franchise ownership is leaving the perceived ‘safety and security’ of a job,” he said. “But if you don’t have a job, it’s a much easier decision. The business is there and it’s a better opportunity now than ever before.”

John Townsley, who has owned Window Genie of the East Bay in California since 2013, said his franchise has ranked among the brand’s top four performing locations since its third year. Compared to last year, he estimates he’s earned about 80% of the revenue compared to this time last year. Now in his 60s, Townsley hopes to pass Window Genie on to his daughter and son-in-law, who now own 30% of the business. He’s confident the business has staying power, thanks to strong corporate support and a portfolio of services that are essential to homeowners.

Like Kenimer, he’s seen an increase in awareness of the Window Genie brand– thanks to residents at home who are increasingly noticing the work that needs to be done on their homes. He attributes the success of his location to the focus his team puts on customer service—which helps the brand stand out among a sea of competitors. Although there has been some drop off due to the pandemic, he thinks any resulting economic downturn will be swift. Right now, he’s focusing on marketing Window Genie’s add-on services such as gutter cleaning and booking appointments to hang holiday lights, which don’t require technicians to enter a customer’s home.

“I still say it’s a great investment for somebody interested in investing and starting up—you have at least five major services you can work on. The mold and mildew on concrete fences aren’t going away. Dirt and bird droppings on windows are not going away. Leaves are still going to fall and clog gutters,” Townsley said. “Essential services are tied to what we do. You could start up a business like this now and it will take a while to get it going anyway. It’s the perfect opportunity to gain the tools in belt you can use and perfect.”

One of the key advantages of owning a franchise like Window Genie is the amount of marketing support the corporate office provides, allowing franchisees time to focus on their core business. From van wraps to websites to positioning your franchise to appear at the top of a Google search, Townsley said the value of the services he receives is well worth the royalties he pays each month.   

He also credits Neighborly for helping franchisees in their network navigate both safety regulations and government-sponsored financial programs during the pandemic. The corporate office kept owners informed every step of the way, putting together Zoom calls and brokering calls between attorneys and brokers willing to help franchisees obtain Payment Protection Payment (PPP) loans and Economic Injury Disaster Loan and Emergency Advance  (EIDL) grants.

“There is no doubt I’d be lost in the woods if I had not had that support and guidance of the folks at both Window Genie and Neighborly,’ he said. 

Are You Ready to Invest in Franchises That Provide Essential, Recession-Resistant Services?

Owning a Neighborly franchise is likely within your reach. Whether you prefer to help residents enjoy their backyards or add sparkle to their exteriors, these franchises do not require that you have prior home improvement experience, and each offer both initial and ongoing training to business owners.

The barrier to entry in a Mosquito Joe franchise is relatively low, particularly due to low initial staffing needs and no requirement to build out a retail space. The franchise fee for a Mosquito Joe franchise is $40,000, and the total initial investment ranges anywhere between $102,850 and $148,150, according to the company. Qualified Veterans receive $6,000 off their initial franchise fee.

You can learn more about Mosquito Joe franchise opportunities here.

Like Mosquito Joe, Window Genie is another mobile service company that requires a fairly low initial investment and allows you to quickly ramp up your business from a home office.

The franchise fee for a Window Genie territory is $36,500 to $85,500, depending on the number of households you purchase, and the total initial investment ranges anywhere between $104,500 to $190,000. Window Genie awards territories based on the number of households in an area. Qualified Veterans receive a 15,000-household bump to their territory at no extra cost; this works out to be approximately a $7,500 discount when starting the business.

You can learn more about Window Genie opportunities here.