5 Reasons To Buy a Home Services Franchise

Now more than ever, it’s critical to explore investment opportunities that show promise not only today but even in an uncertain future. 

If you’re an aspiring entrepreneur or a business owner who wants to grow your wealth, a home services franchise is a great choice.

In this article, we’ll explore the different types of home service franchises, the trends in the industry, and the benefits of getting a home services franchise.

Jump to:

• Most Common Types of Home Service Franchise Industries

• 5 Reasons To Consider Buying a Home Services Franchise

• What is a Franchise Disclosure Document (FDD)?

• Resources for Future Franchise Owners

• Become a Business Owner in 2023

   

Most Common Types of Home Service Franchise Industries

Home services franchises come in many different forms but all serve the same purpose: to help customers improve and maintain their homes. You can operate a home service franchise online from the comfort of your own home or by setting up your own local location. 

Here are some of the most popular types of home service franchises:

Painting

Source: Klappenberger & Son

Franchises are making the painting industry more exciting, as more and more people opt to renovate and redesign their homes. These franchises are revitalizing an otherwise traditional industry with a tech-savvy and custom approach to exterior and interior painting services.

Here are some of the top painting franchises in the market:

• CertaPro Painters            
• Five Star Painting
• Fresh Coat
• 360° Painting
• Color World House Painting
• Wow 1 Day Painting
• Klappenberger & Son
• America’s Color Consultants

Junk Removal

The junk removal industry in the U.S. is growing at an exponential rate, with estimates saying it is valued at $10 billion every year. Figures also show that the average revenue for a junk removal business is about $1.4 million per year, with an annual growth rate of 3.5%.

Some of the top junk removal franchises include:

• Two Men and a Truck
• 1-800-GOT-JUNK?
• College Hunks Hauling Junk & Moving
• Junk King
• Bin There Dump That
• Junkluggers
• Dump Squad
• Load Up

Pest Control

The demand for pest control services will always be high no matter what is happening with the economy. That’s because unwanted pests can infest homes and yards at any time. The job outlook for the industry from 2021 to 2031 is 7%, which is higher than the average for jobs.

Pest control requires specialized training and licenses. But all in all, those looking to enter the industry can benefit from low minimum investment, low business overhead costs, outstanding revenue, and high-profit margins.

Here are some of the top pest control franchises in the market today:

• Mosquito Joe
• Critter Control
• Mosquito Hunters
• Mosquito Shield
• Mosquito Squad
• Pestmaster Services Inc.
• Lawn Doctor
• Superior Mosquito Defense
  
  

Source: TopFranchise.com

Auto Repair

The auto repair industry will continue to thrive in the years to come for many different reasons. For one, auto repair is an essential business — the need to keep vehicles running smoothly is indispensable in good times and bad. 

Plus, studies show that more and more Americans are making repairs on their cars to keep them for longer. The average age of vehicles on the road is 12 years. 

For those who want to enter the industry, there are many opportunities to join well-respected franchises. These include:

• AAMCO Transmissions and Total Care
• Midas International
• Christian Brothers Automotive
• Tuffy Tire and Auto Service
• Meineke Car Care Centers
• CARSTAR Franchise Systems
• Precision Tune Auto Care
• Mr. Transmission

Cleaners

The residential and commercial cleaning industry in the U.S. employs nearly three million people. The market is worth approximately $90 billion and as of 2023, there are more than a million janitorial service businesses all over the country. 

Franchises offer many opportunities for anyone looking to enter the cleaning industry, and its benefits range from low initial investment to flexibility, a recession-proof business model, and huge profits.

Some of the top cleaning franchises in the market include:

• JAN-PRO
• Anago Cleaning Systems
• Stratus Building Solutions
• Buildingstars International
• 360clean
• ServiceMaster Clean
• Vanguard Cleaning Systems

Other Popular Home Services Franchise Opportunities

• Kitchen and bathroom remodeling
• Roofing
• Handyman
• Landscaping
• Flooring
• Electrical
• Plumbing
• HVAC 

5 Reasons To Consider Buying a Home Services Franchise

1. Franchise Opportunities Are Plentiful in the Home Services Industry

From general repairs, remodeling, and home additions to decorating, landscaping, moving, cleaning, plumbing, pest control, and many more, entrepreneurs seeking to start their own businesses have countless industries and business models to choose from.

Plus, you won’t have to worry about high startup costs. Home services franchise businesses are relatively affordable compared to franchises in other industries. You don’t need much inventory to get started, and you can grow your business without the need for a brick-and-mortar location.

2. Home Services Are Always in Demand

Many factors drive demand for home services. For one, these services are essential to homeowners. People will always call on home service businesses for regular and routine maintenance so you can count on steady work all year round. 

Home service businesses are also recession-proof, which means your business won’t be severely affected by changes in the economy.

3. A Customer Base Already Exists

People are seeing the importance of maintaining a home to increase its value. That’s because more and more people are spending their time at home and balancing their professional and personal lives, making it more critical than ever to improve and renovate the space they will spend most of their time in.

The global home improvement market is valued at $830 billion. This is expected to grow in the next few years as technology makes it easier for people to access much-needed home services online. 

4. You Don’t Have to Build Branding and Operations from Scratch

One of the best parts about owning a franchise is that you’ll get all the tools and support you need to get your business up and running right away. You get access to a proven business model — a tried and tested set of systems and processes that will help you run your business efficiently.

You’ll need to invest in sales and marketing, but you’ll get all the advantages of national recognition, a strong brand identity, and an established customer base. You’ll just have to ensure that you keep providing a service that people simply can’t find elsewhere.

5. Being a Franchise Owner Requires Minimal Industry Experience

You’ll get the benefits of premium, hands-on training for nearly every aspect of your business so you can operate it successfully while achieving your personal and professional goals.

The support for your business doesn’t end in training. A good franchisor will provide you with ongoing mentorship and opportunities to learn from other franchise owners. 

Like any smart business owner, you want to know that there is a strong demand for the services you provide. Thankfully, auto detailing is growing in demand across the United States.

What is a Franchise Disclosure Document (FDD)?

Before investing in a franchise, you must carefully review a Franchise Disclosure Document (FDD) — a legal document that is an integral part of the franchise sales and due diligence process.

Source: G2

The Federal Trade Commission (FTC) requires franchisors to provide an FDD to individuals interested in buying a franchise. The document must be given to prospective franchisees at least 14 days before the signing of a binding agreement or any payment in connection with the proposed franchise sale. 

Simply put, this document contains everything you need to know about the franchise opportunity: the franchisor, the individuals and entities associated with the franchisor, the franchisor-franchisee relationship, the initial franchise fee that will be charged, the ongoing royalties that franchisees will be required to pay, and other information about the offering. 

You need to thoroughly review an FDD to make strategic decisions when investing in a home services franchise.

What Should You Look for in an FDD?

Every FDD must include 23 disclosure items. Let’s look through them and highlight the parts you need to pay close attention to.

1. The franchisor and any predecessors, parents, and affiliates: This part contains general business information, background, and the complete history of the franchise. Look for a true and accurate account of the ownership of the franchise brand. Find out more about parent companies, trusts, partners, and investors. 
2. Business experience: This covers the leadership team — key executives and their responsibilities. Check if the executive team has a solid background in franchising and management. Know their backgrounds and find out if they are new to franchising or have a history of managing successful franchises. 
3. Litigation: This contains the litigation history of the franchisor. Find out the volume and nature of the cases the company has been involved in. Are there any instances of fraud or misrepresentation? Are there third-party suits claiming trademark or intellectual property infringements?
4. Bankruptcy: This is the part that details whether or not the franchisor, the franchisor’s affiliates, predecessors, and/or individual management team members identified in ‘Item 2’ had previously filed for bankruptcy.
5. Initial fees: This covers the initial fees — or all upfront fees that a franchisee will be required to pay the franchisor before opening the franchised business. Check whether or not these fees are refundable. 
6. Other fees: This covers all other fees that a franchisee must pay to the franchisors during the term of the franchise agreement. Get a clearer understanding of all ongoing costs. Take note of this so you’ll know if there are hidden or undisclosed fees.
7. Estimated initial investment: This contains a comprehensive list of expenses that will be required to open the franchise and operate it for the first several months. Franchisors give an estimate (low and high range) of the initial investment. Check whether the estimate is realistic. Review this section carefully to assess if you can afford to purchase and operate the franchise. 
8. Restrictions on sources of products and services: This part details the products and supplies the franchisee must purchase from the franchisor or the franchisor's designated suppliers. It should disclose the revenue and rebates that the franchisor earns from the sale of supplies and products.
9. Franchisee’s obligations: This contains a summary of the franchisee’s obligations under the franchise agreement and is usually in table format. Learn what you’re getting into and find out exactly how the roles of the franchisor and franchisee go together. 
10. Financing: This contains the details and conditions of any financing arrangements related to initial fees or the franchised business.
11. Franchisor’s assistance, advertising, computer systems, and training: This part explains the type of assistance and training that the franchisee can expect from the franchisor. It also discusses the advertising requirements that will be imposed on the franchisee, as well as the computer and software systems that the franchisee will purchase and use. 
12. Territory: This section is an important yet often overlooked part of the FDD. It outlines the franchisee’s rights over territory and any restrictions that come with it. Find out if the franchisor offers exclusive territory, which means no other franchisee can establish another location within a certain distance of your business.This is crucial because you wouldn’t want competition between franchisees of the same franchisor. 
13. Trademarks: This part covers information about the trademarks of the franchise system — whether or not they are registered with the United States Patent and Trademark Office, their registration status, and whether or not the franchisor has notice of a trademark conflict or dispute.
14. Patents, copyrights, and proprietary information: This contains details about copyrights, patents, and any other protected information related to the franchise system. 
15. Obligation to participate in the actual operation of the franchise business: This part details what obligations the franchisee owners must have in the day-to-day operations of the franchised business.
16. Restrictions on the selling power of the franchisee: This contains details about what the franchisee may or may not sell as part of the franchised business.
17. Renewal, termination, transfer, and dispute resolution: This outlines the legal rights and obligations related to the renewal, termination, and transfer of the franchised business. It also covers how legal disputes must be resolved between the parties. 
18. Public figures: This part details whether a celebrity, influencer, or any other public figure has been hired to promote the franchise. 
19. Financial performance representations: Franchisors are not required to disclose this item. For those that do, it covers information about the financial performance of existing franchisees. It will give you a feel of how much you can expect to make with the business. Don’t hesitate to reach out to existing franchisees to determine the accuracy of the figures so you can have a better idea of the profits and losses you may incur. 
20. Franchisee and outlets information: This part contains a table that summarizes the number of franchises that were opened, terminated, closed, and transferred over the last three years. Look at trends and projections of growth. Check if there’s a growing number of franchise closures.
21. Financial statements: This section contains audited financial statements for the previous three years. Look at the balance sheets and profit-and-loss statements to get an overview of the company’s financial situation. Check whether the franchisor is financially stable and has the budget and cash reserves necessary to provide essential support services to all of its units.
22. Contracts: This section includes all the contracts that a franchisee will be required to sign with the franchisor. 
23. Receipts: This is the receipt page to be signed by the franchisee to confirm receipt of the FDD.

Resources for Future Franchise Owners

Here are the organizations that aspiring franchise owners can turn to when they need help navigating the franchising process.

The Entrepreneur's Source

The Entrepreneur’s Source is a large franchise-coaching organization with more than 100 franchising units in various states across the U.S. 

It offers aspiring entrepreneurs and franchise owners with education, coaching, mentoring, and training so they can easily enter and thrive in the franchising sector. It helps prospective franchise owners evaluate their financial goals and determine the right franchising opportunities that will help them achieve their goals.

International Franchise Association

The International Franchise Association is the world’s oldest and largest organization representing franchising on a global scale. The IFA’s mission is to “protect, enhance, and promote the franchising business model” and it represents more than 1,400 franchise systems world-wide.

You can think of IFA as a global educational resource that franchisors, franchisees, and franchise suppliers can tap into for anything related to franchising — from memberships to educational programs, training, networking opportunities, and the like.

Become a Business Owner in 2023

With so many tools and resources available, there’s nothing that can stop you from being a franchise owner in 2023. Use this guide to get off on the right food. Start taking advantage of the many service franchise opportunities in the market today.