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As we come down from the holiday season and New Year’s sales, many people are looking ahead at their business goals for 2023. If you’re in research mode, one of the places you might be looking at investing in is a seasonal business like the ones you just saw dominating your local area.
But are seasonal franchises a sound investment? And is a seasonal franchise the right opportunity for you to pursue? Let’s dive in.
What is a Seasonal Franchise?
Seasonal franchises are those businesses that only operate during certain times of the year. For example, mosquito-fighting franchises tend to pick up during warmer temperatures. Tax services tend to be most active and used during the upcoming tax season.
Seasonal franchises aren’t limited to operations during a finite period, but they tend to pick up the bulk of their revenues during specific months. For example, pool service franchises tend to be busier during the summer, when more pools are being used, than during the winter, when pools typically go into maintenance mode.
Some people like the allure of working with a franchise that is only active during a finite period each year, but there are specific considerations to make before investing in this model.
Personnel
Hiring is a huge part of franchise ownership. Without having a team of employees, you will be forced to work in your franchise more than you might like. Likewise, you might not be able to grow as quickly as you’d like because you simply don’t have the staffing to fulfill the orders.
With a seasonal franchise, personnel issues can become more challenging. Knowing the type of employees, you’ll want to hire can help navigate the feast or famine cycle from an HR perspective. For example, if you hire many college students to teach swim lessons, you’ll probably have enough people in your hometown looking for seasonal work to have a teacher in each class. However, if you have a tax franchise, hiring qualified employees for a finite period in such a specific niche can be difficult.
Working with your franchisor is an excellent way to understand how to navigate the job market and find the right people to fit those temporary roles.
External Factors
Just because a business is seasonal doesn’t mean it’s guaranteed to be in full operation mode for a specific season. There are many factors that contribute to whether or not the services are needed or rendered during that period. For example, if temperatures are mild one summer, the number of mosquitos might also be mild, making it harder for a mosquito-fighting company to drum up business.
Having backup plans, contingency plans, or a diversified offer, can help insulate your business and franchise in these uncertain months. Before signing up with the franchisor, talk to them about how they navigate the ebbs and flows of seasonal demand.
Long-Term Budgeting
This probably goes without saying, but seasonal businesses will have months with higher and lower cash flow. These businesses demand proper budgeting practices and require longer-term planning.
When deciding whether the franchise is right for you to invest in, talk to the franchisor about how they navigate these ups and downs from a budget standpoint. If there’s a solid system in place backed by years of experience, the opportunity will become less risky. On the flip side, without a plan, that franchise should be carefully considered and analyzed during the first year so you don’t make costly mistakes.
If you’re looking to invest in a seasonal franchise, be sure to talk to your franchisor about all three areas — support in hiring enough personnel for the busy season, contingency plans for external factors impeding sales, and long-term budgeting systems to stay in the black year-round.
Kimberly Crossland is the founder of Roadpreneur and Cruisin' + Campfires, two companies designed to keep families together and living in freedom through travel and entrepreneurship. The goal of both businesses is to inspire meaningful change through the power of a strategic, thoughtful approach to life and business. In her free time, you can find her looking for a new adventure together with her two boys.