Business Services Systems Are Working
The franchise market has evolved into a incredibly diverse and wide range of businesses and business segments. For so many, the market has always been associated with food service and restaurants, but today’s franchise market is almost a perfect blend of small business ideas and unique, compelling offerings which only partially consist of restaurant franchise models. This category of business service franchise systems has become more and more relevant and with the “average” franchise investor becoming more and more sophisticated, the growth in this segment seems to make sense.
One might ask, what franchise brands might be described as business service brands? Business service brands include a wide range of offerings and generally are what are also called Executive Franchises. They are business models. The market segment could include accounting or bookkeeping service franchises or payroll management or one of the most significant market segments to franchise out has been Insurance with several new insurance franchise brands. These are franchise systems which are designed to attract “white collar” franchise owners who have experience in executive positions and many times have MBA’s. The business model requires a skill set and resume to make the model successful. The current trend in franchising is that many of today’s corporate refugees have been transitioning to business ownership and the franchise model is designed to support that first time entrepreneur. What makes the business services market segment even more intriguing are many times the numbers. Because most of the business service franchise offerings do not require equipment or a retail space, they present an extremely low up front investment opportunity for a new franchisee. Most of the required capital is needed for the franchise fee, marketing and working capital. Usually a small office space will be needed with a basic office arrangement, many business service franchise systems can be started even from a home office location. The business service franchise systems that have been successful and offer a franchisee value in their investment typically include a technology platform to deliver services and provide franchisees with infrastructure they wouldn’t have on their own. They also have strong franchise marketing systems in place which can be replicated easily by a franchisee. The brand is professional, consistent, there is a solid lead generation marketing platform in place and a sales process that allows a franchisee to generate business efficiently and effectively. I have found that most business service franchise models tend to be selective in who they will let into the model and allow to become a franchisee. Our firm, Franchise Marketing Systems, works with new and emerging franchise models and I’ve been doing this work for over twenty years. In my time doing franchise development, I’ve worked with many strong business service franchise offerings and platforms. Some of the larger brands in this space include CFO Systems which is an outsourced CFO service model, Schooley Mitchell which provides technology and telecom consulting to businesses and WSI which is a technology service franchise system. One of the larger systems now has been Goosehad Insurance, a full scale insurance franchise which has recently gone public and had wide spread success in the franchise market. All of these brands have in excess of 200 franchisees and have been able to scale into new markets successfully by offering equitable franchise relationships, strong unit economics and a unique value proposition. The average franchisee in each of these business service franchise brands is a high caliber, accomplished professional with a strong resume. In recent years and since the pandemic occurred, there has been an uptick in the business services space as more and more brands in the category have pushed into franchising to scale their model and expand into new market segments. We’ve found that the pandemic has fueled significant growth in the franchise market and the business services segment has run right alongside the rest of the franchise industry. Lloyd Forensics is a forensic accounting firm franchise which was launched by Diana Lloyd who had built a incredible brand and in-depth business system providing forensic accounting services launched the franchise model once realizing that the market segment is way to large for her to capture market share with just company resources and franchisees could benefit from a high margin, specialty niche service business like Lloyd Forensics. In the finance segment, PS Lending, a real estate funding service provider founded by Phil Stevenson in South Florida was growing so quickly with the explosion in the residential real estate market that the franchise model was a natural transition for the firm to begin to grow into new markets and expand the brand. CoLabs Mortgage Lending Franchise is also an excellent franchise system in the mortgage lending space with incredible technology and a strong marketing system in place. Regardless of the industry niche within the business services category, the trend is absolutely real. I would offer two bits of advice, one to the potential franchise buyer considering the business services segment and one to the business services brand considering ways to expand. For the franchise buyer, the franchise model has proven to be effective in this category, don’t rule out a franchise system as a way for you to build your own business and leverage a proven business system. For the brand considering how to grow, you will never attract the quality of person, commitment to operating the business and passion for delivering your services with an employee that you will with a franchise business owner, you cannot rule out the franchise channel as a way to grow your brand.
Chris Conner has worked in the franchise development industry for almost 20 years and helped over 600 brands franchise their brand and develop franchise distribution channels. He founded Franchise Marketing Systems in 2009, which now includes a team of 27 franchise consultants based in and Canada and supports brands around the world to grow and scale through franchise expansion. Visit www.fmsfranchise.com for more information