Home-based franchises in the home services industry are steadily growing in popularity. As more homeowners opt to stay in their homes as opposed to moving when life events necessitate change, they are looking for ways to “make it work.” New babies, parents moving in, or choosing to age in place, kids off to college and home health care needs are just some of the reasons people need help in renovating their living spaces. This keeps home services and home improvement businesses very busy. In fact, the home organization industry is projected to increase 4% annually to $9.4 billion by 2017.
If you have decided to be your own boss by buying a home-based franchise business, you’ve taken a major step toward building a strong financial future. In the home services industry, you have many diverse franchise opportunities to choose from:
- Handyman and repairs
- Home improvements
- New windows and window coverings
- Home and garage storage and organization
- Landscaping and concrete hardscapes
- Home health care
- Security systems
- Cleaning services
- And more
However, almost more important than what you do is choosing a business model that is going to enable you to meet the personal, professional, and financial goals you’ve set around starting your own business. How much you get to keep of what you make is a fundamental issue. Just how much will a franchise opportunity actually cost you?
Royalty programs—opt for the flat fee
A vital part of your due diligence is investigating all the costs, including royalty fees. At buy-in, initial fees cover the franchisor costs of getting you started in your own business, including administrative, training, marketing, and legal expenditures. These fees include the rights to the brand’s reputation and strength, allowing you to use the franchises’ logos, names, systems, and products.
Royalty fees are on-going fees paid to the franchisor that allow you to continue to do business under the brand, as well as benefit from the support infrastructure that empowers the entire franchise system. You need to understand how these fees work, especially how they relate to your future income. This is where the Franchise Disclosure Document (FDD) becomes your very best friend; it will spell out everything you need to know about fees, costs, and royalties. While it may not be as exciting to read as the latest John Grisham thriller, it will definitely help you avoid any surprises around the corner, down a dark alley, or in your checkbook!
In the home services industry, franchise royalty programs can be as varied as the franchise businesses themselves, because each franchisor determines the formula for royalties.
- Most common type is where royalty fees tie directly to your gross sales–everything you make factors into the fee whether the percentage is fixed, increasing, or decreasing
- Transaction-based requires a set fee per transaction (usually for very large-scale transactions)
- Prime territories may pay a higher royalty percentage on gross sales than a low-key or rural area
- A flat fee is a set monthly amount not tied to earnings; franchisees keep more of their profits as their businesses grow
The Home Franchise Concepts (HFC) family of brands is comprised of flat fee, low-cost, home-based franchise businesses.
No penalties for making more money
Home Franchise Concepts is the parent company to three exceptional home service brands, Budget Blinds®, Tailored Living® featuring PremierGarage® and Concrete Craft™.
- Budget Blinds – custom window coverings, including blinds, shades, and drapery styles for indoor/outdoor application, residential, and commercial
- Tailored Living featuring PremierGarage – custom storage solutions as well as industrial-strength Premier One® garage flooring options for home and business
- Concrete Craft – custom concrete staining, stamping, and resurfacing for indoor and outdoor floors and hardscapes, like walkways, driveways, decks, and patios
In each business model, the royalty fee is a flat fee, ensuring that the franchisee can know exactly what their franchise costs will be each month. This is in contrast to many home-based, home service franchises, like Molly Maid or Lawn Doctor who do not have a flat fee royalty structure.
Additionally, with HFC franchise brands, new franchisees start with a tiered plan of graduated royalty fees, having a “grace period” of two years to grow their business before they reach the full royalty fee amount. And, then, on the other end, regardless of how successful a franchisee is, they still pay the same flat royalty fee. They don’t have to pay more as their sales increase; they reap the full benefit of all their hard work!
Royalty fees are just one piece of the franchising puzzle but, admittedly, a big piece. Investigate carefully as you take the plunge to becoming an independent franchise business owner, and be sure to check out all three brands under the HFC umbrella. You may just find the perfect fit! Call 1-800-420-5374 today or go online to Home Franchise Concepts and begin to see the real possibilities of starting your own business.
If you are a Veteran, HFC has special programs to assist you with owning a franchise business. If you’ll soon be exiting any branch of the military or are already a veteran, click here to learn how HFC and its family of brands supports Veterans by helping them to secure their financial futures.