There are many different ways to categorize a franchise. You can do it by size, industry, geography, and more. At the end of the day, though, it will fall into one of two categories: service-based franchise or product-based franchise. Service-based franchises appeal to people for a variety of reasons. Whether they provide personal services or business services, they generally offer more flexibility to work from home than product-based franchises. They also often have lower setup and ongoing operating costs.
As with any franchise, however, it’s important to make sure a service-based franchise is the right fit for you. If you’re considering this option, I recommend that you ask yourself the following questions.
How do I feel about high-stakes interactions?
While product-based franchises often involve low-stakes transactions, such as people purchasing snacks or office supplies, most service-based transactions are more fraught. Service franchises cover areas like finance, health care, education, home maintenance, business success, and wellness.
When you own a service-based franchise, then, you take on the emotional weight of assisting people with major assets and priorities. Your customers will be more emotionally invested in the outcome of a transaction. People don’t usually get upset if a $7 meal is mediocre, but do a bad job tutoring their child or preparing their taxes…
If you thrive on challenges and enjoy the satisfaction of helping people with something that is very important to them, then a service-based business may be a good choice for you. But if you find high-stakes interactions merely exhausting and stressful, this kind of franchise is probably not for you.
Do I handle ambiguity well?
In the franchise world, especially, selling a product doesn’t involve a lot of ambiguity. You and your customer both know exactly what they are purchasing. Your franchisor may even require you to buy your inventory or ingredients from certain suppliers. The specifications of a product are clear, and customers can usually inspect it (or view a photo of it in a catalog or on a website) before purchasing.
Services, however, are more fluid. Even if your franchisor provides an exact process for you to follow, there will always be some degree of customization involved. The outcome will depend, to some extent, on your skill level or that of your employees. Service situations are also more likely to involve unexpected complications or require on-the-spot problem-solving.
A service-based franchise owner must be able to process ambiguity and turn it into something orderly. If you have a track record of producing excellent outcomes in ambiguous situations, this won’t be a problem for you. But if ambiguity tends to paralyze you or confuse you, a product-based franchise may be a better fit.
Am I good at maintaining work-life boundaries?
While product-based franchises are almost always brick-and-mortar, service-based franchises are often home-based. Home-based work appeals to many people because of its flexibility. But when your office is at home, work-life balance is harder to achieve. Your work is always just a few steps away–it’s so easy to think, “I’ll just answer one more email.” And since the work carries more emotional weight, you may be more inclined to justify an extra hour or two on the job each night.
When you own a service-based franchise, then, you have to be diligent about maintaining boundaries between your work and personal lives. You don’t want to be the franchise owner who left corporate America to gain more work-life balance–and then spent 60 hours a week on their business. If you have workaholic tendencies, or prefer a strong separation between work and home, you’ll probably fare best with a brick-and-mortar franchise (whether it sells products or services).
Do I have in-demand technical or professional skills?
Many service franchises employ highly skilled workers. These also tend to be the franchises that can charge the most for their work. Check out the following list of skills and matching franchises. You may see an ideal opportunity to gain more control over your work and use your skills to benefit not just customers, but also yourself and your family.
- Certified K-12 teacher: tutoring
- Master mechanic: automotive repair and maintenance
- Master HVAC technician: HVAC repair and maintenance
- Certified accountant or auditor: tax preparation
- Licensed social worker or counselor: life or executive coaching
- Certified nurse or health care technician: home health care or health care transportation
These are just a few of many possible examples. Whether you provide the service yourself or just oversee the business, your background can give you a unique advantage in making the franchise successful.
Have I sold services before?
Many people become franchise owners after working in sales. Sales experience is excellent preparation for franchising–but it’s important to remember that selling a product and selling a service are two different animals. I’m not saying that you have to have experience selling services. But if you’ve only sold products, you shouldn’t come to service-based franchising with the expectation that you’ll be successful using the same tools and tactics.
In the franchise world, services are often more expensive than products and therefore may have a longer conversion funnel. It’s harder to sell something people can’t see or touch. And a service-focused salesperson has to be more solution- and relationship-oriented than a product-focused salesperson. If you’ve never sold services before, you may want to plan on purchasing a product-based franchise instead.
What were your answers to these questions? Did they match with my recommendations? If so, maybe it’s time to take the next step in your franchising journey. Set up a 15-minute intro call with me, and I’ll help you start the process of finding just the right service-based franchise for you!
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