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Understanding the rise in home service franchising

Insight

Understanding the rise in home service franchising

We spoke with the sector’s biggest franchise brands to get a firsthand perspective of this hands-on industry

We spoke with the sector’s biggest franchise brands to get a firsthand perspective of this hands-on industry.

Interview by Kieran McLoone, deputy editor for Global Franchise

Of all the sectors to persevere throughout the coronavirus pandemic, one stands out as particularly resilient to this kind of global challenge: home services.

Perhaps it’s because people have been spending more time than ever in their homes, or maybe entrepreneurs are just starting to realize the enduring nature of these repair-centric brands. Either way, home services have been in demand more than ever this past year, and we wanted to find out why.

To do so, we spoke with this segment’s standout brands, and compiled an essential guide on the alluring side of service franchising.

1. bluefrog Plumbing + Drain

Established: 2015

Number of locations: 15

Interviewee: Mike Mushinski, president

Why do you think home service brands like bluefrog remain attractive investments, even during a pandemic?

In an economic crisis, the luxury level tends to be the first one impacted. Fortunately for us, plumbing is not a luxury and will always be a need. When something breaks down, a licensed plumber needs to be contacted to fix it.

What do you predict for the future of the services industry?

I think that the stigma that has existed in some minds regarding “the trades” will start to finally fade away. People are realizing that not only great careers can be had in the trades, but highly profitable businesses can be started and grown as well. Plumbing is an essential service – and always will be.

2. Junk King

Established: 2005

Number of locations: Over 100 awarded

Interviewee: Michael Andreacchi, CEO and co-founder

Have you seen a rise in demand for Junk King’s services this past year?

Yes, and this can be attributed to people having to spend a majority of the past year in their home which gave them the free time to finally tackle projects around the house like clearing out the clutter from their basements. Our customers also appreciate our eco-friendly approach to junk removal – we commit to recycling, repurposing, and reusing at least 60 per cent of each haul.

What changes as a result of the pandemic do you think will remain part of the industry?

Touchless services and experiences are not going away anytime soon. More and more of our franchise locations are starting to provide dumpster rentals as an option to allow people the opportunity for a completely touchless junk removal service by allowing them to remove the junk from their homes at their own pace.

3. Greensleeves

Established: 1998

Number of locations: 101

Interviewee: David Truby, managing director

What makes a brand like Greensleeves appealing for franchisees as well as customers?

Greensleeves provides a service that people would struggle to do themselves. So, there will always be a demand for tradespeople to help homeowners achieve the lawn of their dreams. A lot of people think that the seasons of the year have a big impact on Greensleeves’ profitability; however, this simply isn’t true.

Did you need to make any changes throughout the pandemic, and how were these received?

We had to make a number of adaptations to how our service was provided, simply to reduce contact between people to keep customers and staff safe. The most notable of these was the implementation of technology to reduce the paperwork we used on a daily basis. Once we had done that, our customer base was extremely keen for us to continue to visit and provide our service.

4. Koala Insulation

Established: 2018

Number of locations: 55

Interviewee: Scott Marr, CEO

What has made Koala Insulation especially attractive this past year?

Insulation is really one of the only home upgrades that you can make that will actually save you money, so it’s always going to be a go-to home improvement even in times of crisis. If you’re looking to make energy efficiency upgrades to your home, insulation is by far the best improvement you can make.

How has the pandemic affected franchisees?

People are tired of worrying about losing their jobs and want to take ownership over their careers. I believe we’ll also be seeing more semi-absent owners, people who keep their regular jobs while working their business on the side until they’re in a place to focus on their business full time.

5. You’ve Got Maids

Established: 2005

Number of locations: 50+

Interviewee: Frank Berger, founder and CEO

What has changed to cause a consistent rise for services like You’ve Got Maids?

The industry has stayed robust due to shifts in the American workforce. As men and women have established an equal footing in the workplace, neither has extensive time to clean their home anymore. With high-pressure jobs and long hours normal for today’s workforce, our industry is needed to fill the gap and help them out.

How has your rate of franchisee inquiries been affected by the pandemic?

Due to the pandemic, our franchise inquiries have slowed down. However, on the consumer inquiry side, we have been able to retain our client base. The need for a clean home has truly never been so great.

The problem we have run into is a consistent demand for services but a limited amount of supply. Many of our employees are single mothers and with school closures in effect across the country, they have had to stay home and care for their children.

6. Poppies

Established: 1980

Number of locations: 22

Interviewee: Chris Wootton, franchisor and franchisee for West Lancashire and Sefton

What has contributed to Poppies remaining a key competitor in this space?

People turn to brands with longevity and history, brands they know and trust in times of crisis. Our 40-year heritage stood us in good stead! Having the ability and resources to flex our service offering and adapt to change is a further strength of a franchise network of businesses rather than single operators.

What kind of timeline do you predict for a return to normal beyond the pandemic?

As the economy is predicted to return to pre-COVID levels by June 2022, with many households having significantly greater savings – and therefore spending power – together with a new respect for the importance of our homes as havens, our industry is primed to expand rapidly in the next 18 months.

7. Kitchen Tune-Up

Established: 1988

Number of locations: 218

Interviewee: Heidi Morrissey, president

What safety measures did Kitchen Tune-Up put in place during the pandemic?

Shortly after the pandemic started to affect in-person business, we implemented virtual appointments. This has allowed customers a safe, comfortable way to get their kitchen project started. We find that most people can easily navigate Zoom or Facetime, which allows for an interactive, visual and comprehensive appointment. Our franchise owners easily adapted to new safety practices and took pride in keeping homeowners and their teams safe and healthy.

What trend do you see for the industry moving forward?

I predict the kitchen and bath remodeling industry will continue to flourish. Due to an increase of remote jobs, people will continue to spend more time at home than ever. Homeowners will invest in the space where they spend the most time. As technology intertwines with everyday objects, like hands-free faucets, I foresee technology becoming a significant piece of the home, no matter what room. Also, I predict a new demand for products that are easy to clean and surfaces that are safe for the family.

8. Restoration 1

Established: 2008

Number of locations: 350 awarded

Interviewee: Tom Gissler, president

Where do you see the home services industry heading in the next three to five years?

The biggest impact in the restoration franchise community is the dramatic influx of equity money flooding the space. There are stark differences between approaches taken by these equity partners. Some have taken a traditional slash and burn approach, some have chosen to leave leadership and structure in place to examine how the space operates before making changes, and others have found a middle ground.

The short answer is that dominant brands will fall to smaller ones as equity partners stumble in their strategy and quest for profit. Never has such a large injection of capital, changing global weather patterns, and political/economic uncertainty been met at the same time. The deck will be reshuffled and the winners will dominate the space for the next decade and beyond.

9. Neighborly

Established: 1981

Number of locations: 4,500+

Interviewee: Mike Bidwell, CEO and president

Has Neighborly seen a rise in demand from prospective franchisees?

Yes, we have, notably in broker interest. There is increased sensitivity around high, fixed-cost businesses right now, including with lenders. Some brokers have been shifting their clients to essential service opportunities due to the pandemic. Home service brands proved especially lucrative with more people working from home.

Were there any major challenges for Neighborly during the pandemic?

The biggest step to addressing the pandemic was getting the public comfortable with professionals coming into their homes to complete these essential service jobs. We established a rapport with them by putting protocols in place to ensure their safety. All of our service workers were required to wear masks when entering someone’s home or if they were in the general vicinity.

We also introduced contactless paperwork and payments, offered virtual estimates when possible, and more. It was a logistical feat to coordinate all of these initiatives with all of our brands, but it was ultimately a success that paid off in the form of appreciative franchise owners and the happy customers they continue to serve.

10. Fibrenew International

Established: 1987

Number of locations: 262

Interviewee: Jesse Johnstone, president

Have you seen a rise in demand for Fibrenew’s services?

The pandemic has changed the way people spend their money. With more time spent at home, consumers are more interested in keeping their furniture and vehicle interiors looking tip-top and we’re able to help with that.

We have also seen an increased demand from the medical industry as any tears, cuts, or holes in vinyl absolutely, positively cannot exist. Those open areas in vinyl are where bacteria and viruses harbor and the pandemic has forever changed healthcare regulations and patient expectations.

With so many people losing their jobs at the height of the pandemic, there was a shift towards business ownership in an industry that has fared well through these precarious times. Having control and not being at the mercy of someone else have been popular themes among budding entrepreneurs.

Moving forward, what will be important for consumers that franchisees can benefit from?

I believe there will be more focus on the home, on family, on reusing and recycling, and on making the most of what we have. With more and more people likely never returning to an office in favor of remote working, home services are well-positioned to respond to many of these changed behaviors and ways of life.

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