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Home Services Industry Overview
Home services franchises encompass many kinds of service categories, including, but not limited to the ones listed below. Franchises can cross over into two or more of these categories, or be specialized within a category:
- Cleaning: Common sanitation work typically done in a customer’s home.
- Decoration: Work undertaken to enhance the aesthetic value of a property.
- Landscaping: Work done to the exterior of a building to enhance “curb appeal”; includes work done with plants and other greenery as well as with stone, lumber, and other non-plant material (commonly referred to as the hardscape).
- Renovation: Discretionary work that usually isn’t necessary for the use of a property, or a part of the property, but can help increase its financial value.
- Repair/Maintenance: Work undertaken to correct issues that impact the use of a property, or a part of it.
- Restoration: Work that occurs after a catastrophic event such as a fire, flood, or natural disaster; also after long-time neglect of a property.
(Note: The focus of this report will exclude cleaning and restoration, which are covered in our cleaning report.)
The home services franchise market saw spending return to its pre-2008 highs for the most part a couple of years ago, and the market has continued to increase. Below are six reasons home services franchises are in such high demand now, as highlighted by Franchising.com:
- The constant need for home services.
- Maintaining and increasing a home’s value being of great importance for homeowners both financially and psychologically.
- An increase in the ability to book online, along with the ability to find information on service providers more easily than before.
- The increase in dual-income households, leading to more money to spend on home services.
- Related to number four, homeowners with less time to spare than ever.
- An aging baby boomer population that wants to stay at home as they age, but outsource the maintenance of their homes.
The underlying keys to the continued industry growth are convenience as well as a generational shift in the view of who can—and maybe more importantly should—use home services. As Dave Ferris, Product Manager at Jobber puts it, “For the longest time, paying for services was something that many people thought was only for wealthy (especially lawn maintenance and cleaning), but it seems this belief is quickly vanishing. In these busy times, people value the time they can spend with friends and family. When you hire a service professional what you are really buying is more time.”
Trends in Home Services
A couple of trends for home service providers in 2019, as compiled by Jobber:
“The market for green lawn care is becoming bigger and bigger in big city markets. I am looking to offer a greener service, meaning more battery equipment and smaller mowers,” says Brad Lloyd, Owner of Your Way Lawn Care. “I would even say we will be looking at full organic lawn treatment programs. This is going to become a huge selling point with people becoming more environmentally conscious.”
AHR Expo sees the link between technology and home Heating Ventilation Air Conditioning and Refrigeration (HVACR) systems becoming an even bigger trend. “Smart devices and the Internet of Things will continue to play a role in residential HVACR with heightened technologies reshaping the space. This accounts for new construction as well as upgrades to existing systems. Consumers are looking for deeper connections between their surrounding environments and the devices they use.”
In the area of the renovation, Houzz sees the following trends as summarized in the 2018 U.S. Houzz Bathroom Trends Study:
- Premium features have shown “significant increases in demand in the last three years.”
- Nearly half (46%) of master bathroom projects accompanied by master bedroom renovations.
- The majority of baby boomers (ages 55 or older) are addressing current or future needs of aging household members during renovations.
In general, “smart” is a keyword in home trends. Approximately 81% of homebuyers say they would favor purchasing a home with smart accessories already installed. Common reasons given for the desire for smart accessories are: convenience, energy efficiency, desire to decrease utility costs, along with the ability to increase the accessibility and safety of their homes. As a result, home services franchises have seen an uptick for projects for making homes smarter.
Going from Mr. Handyman to Dryer Vent Wizard
David Lavalle is a self-described “serial entrepreneur” and no stranger to franchising. He founded home service franchise Mr. Handyman in 1996, which he sold to Service Brands International four years later. (The Dwyer Group, now Neighborly, bought all Service Brands International affiliated franchises in 2015.)
During his time at the head of Mr. Handyman, however, he noticed a lack in the market. “I would get a fair amount of calls from customers needing their dryer vents cleaned, but it was a service we didn’t offer. I always imagined some companies would handle this sort of need. After helping a friend that owned an air duct cleaning business one day, I realized they didn’t even offer this service and began to think there might be a potential market and business in dryer vent cleaning.”
An often overlooked issue, dryer fires account for approximately $35 million in property losses per year. Thankfully, since Dryer Vent Wizard was founded a decade ago, awareness of the danger is on the rise. “What I see in the industry are more and more compliance and awareness,” David says. “Dryer fires were somewhat unknown [when I started the franchise], and now there is more awareness than ever before. Somehow, perhaps, we have a lot to do with that increased awareness over the years.”
As you can imagine, this home service franchise fills quite a need in the communities it’s a part of. And it goes beyond the main concern of preventing fires.
Properly cleaned dryer vents help keep homes safer and healthier. “Of course, there is always a risk of a dryer fire if the lint buildup becomes too great. However, many people do not realize clogged vents can also lead to mold buildup in a home and, with gas dryers, the risk of carbon monoxide poisoning,” David says.
In addition, “Dryers with clogged vents often take multiple cycles to dry a load of clothing,” he explains. “These clogged vents cause energy inefficiency, higher electrical bills, and unwanted wear and tear on both the appliance and the customers clothing. By having the dryer vents cleaned on a regular basis, we can help the appliance run at its peak performance and efficiency.”
Beyond its safety and health functions, Dryer Vent Wizard is a franchise that works symbiotically with other repair and maintenance franchises as well.
“Often it’s an appliance repair company that discovers a customer’s dryer vent is clogged. They are typically called because the customer’s clothes are not drying and the dryer is assumed to be broken,” David tells us.
“The appliance repairman will do some testing and finds that the dryer is working great, but the exhaust is clogged, therefore the dryer can’t evacuate the heat and or moisture out of the clothing. When it is determined the dryer vent is causing the problems, they refer the customer to us, and they will typically call us the Dryer Vent Experts or Specialists. In return, when our customers have dryers that are not functioning properly, we reciprocate the referral back to one of our repair center partners.”
And on a personal note, Dryer Vent Wizard has given David something many prospective franchisees are after for themselves: better work-life balance. “With Dryer Vent Wizard I have always worked a tremendous amount of hours, but between the scheduling center answering the phones and the efficiency of the business, I have been able to step back a little bit from where I was in the past.
“I used to work weekends, and now I don’t do that anymore….Dryer Vent Wizard has given me the opportunity to devote more time to the family as well as get the family involved in the business, and that has worked out perfect for me.”
For more on Dryer Vent Wizard, please see its profile.
Conversation with a Home Services Franchisor
Sometimes it’s best to hear about how the franchise process works from the source—in this case, a home services franchise executive. Gwyn O'Kane is Miracle Method's VP of Franchise Development. Since 1979, Miracle Method Surface Refinishing has refinished well over one million bathtubs, showers, tile walls and countertops.
Below are some quotes from Gwyn about how Miracle Method has managed to stay competitive for so long and what you could potentially expect as a franchise owner.
On How a Franchise, Like Miracle Method, Can Stay Successful for So Long…“The foundation of any great franchise is having a system that works well and is repeatable. One of the most important ingredients is the people, both franchise owners and the franchisor support team. Add that in and you have the key to success and longevity. Miracle Method has been in business for over 38 years with very successful owners who have been with us for a long time. Success breeds success and new owners joining Miracle Method today are able to benefit from decades of experience.”
On the Outlook for the Industry in the Coming Years…“One word…huge! Fortunately, like us humans, kitchens and bathrooms will always grow older and need maintenance and as the population continues to grow, so will the number of these rooms.”
On Helping Franchisees Find a Location…“Absolutely, it is important that our owners find a great location for their business and we have some excellent tools to support this process. Fortunately, we are not competing with all the hard to find and expensive retail space that many franchise owners are looking for.”
On the Advertising and Marketing Help Franchisees Receive…“The Corporate Office will help you determine a marketing plan, including what advertising media is best to use. We will keep you apprised of what is happening in the industry, introduce new products, and assist you in your advertising and marketing for as long as you are a Miracle Method franchise owner.”
On What Kind of Person Would Be Successful as a Franchisee…“Our owners come from many different backgrounds including the construction industry and corporate America. There is no specific experience required, however we look for people who are ‘franchise entrepreneurs’ and value what the franchise business model brings to the table.
“Being competitive certainly helps and being a people person is important when dealing with customers and employees. Beyond that, it is all about having the drive to be a successful business owner.”
Buying a Home Services Franchise
Please note: the provisions and fees referred to below are some of the most common and not a complete listing. Please review the Franchise Disclosure Document (FDD) of a franchise for all of the provisions and fees related to investing in that particular franchise.
The opening costs for prospective franchisees can depend on many factors, including but not limited to: the business system and execution requirements, the size of the territory the franchisee desires, and more.
Franchisors offer estimates in their Franchise Disclosure Document (FDD) based upon their experience establishing, and in some cases operating, units. However, prospective franchisees should keep in mind these estimates are just that—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Ongoing Franchise Fees
Throughout the length of the agreement there are costs for being a part of the franchisor’s business system. These costs include items such as royalty fees, charges for technical support, and continued marketing costs.
The most common is the royalty fee. Royalty fees are assessed for the continued use of the franchisor’s trademarks and patented processes, along with certain types of operational support.
In addition to regularly assessed fees, other fees are charged on an “as needed” basis such as audit fees, or costs for additional, non-mandatory, training. Prior to investing, prospective franchisees should do their research and carefully review a franchisor’s FDD for more detailed information on all systems, procedures and costs.
For more information on a number of franchises currently seeking franchisees, please see our home services franchise industry profiles.
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