3 Challenges to Owning a Service Franchise, and How to Overcome Them

Owning a service franchise is a rewarding, yet challenging, experience. There are specific difficulties that may not be found in other types of businesses, but they can certainly be overcome.

“The biggest thing that plagues service franchising is that you're only as good as the number of people that you have working for you,” said Dan Rowe, CEO of Fransmart. “The more customers you want, the more people you must hire.”

For example, someone who cuts hair can only cut one person's hair at a time, while a chef can make 20 burgers at the same time.

The best way to overcome this is by optimizing your staff, Rowe noted. In the case of a hairdresser, make sure they are making use of their time booking a good amount of appointments. “The worst is that person sitting idle between customers coming to their seat,” said Rowe.

Additionally, with many service franchise employees being mobile, “systems become even more important to ensure you know where all your employees are and that they are in the right place at the right time with the right tools,” said Corey Elias, founder of Franchise Captain. “It is also important to make sure they have an efficient schedule for the day rather than driving all over town.”

Similarly, because people are so crucial to a service franchise, hiring the right employees for the job can be a challenge.

“If you don't hire the right people, you're gonna have chronic turnover, and chronic turnover is so expensive,” said Rowe.

The best way to handle this challenge is by really taking the time to interview potential employees to determine if they are the right fit for the job. “I would take your time to interview and really pick people who are going to like doing the job, and then have an aligned compensation plan,” Rowe added.

Getting business going is also a common challenge among service franchises.

“A restaurant, for instance, will have a ‘Coming Soon’ sign for six months, and when they open they are busy from the beginning, but a new maid franchise will take time to ramp up volume,” said Rowe.

Elias added that since service franchises don't have a prime location that is creating walk-in traffic in most cases, they “need to rely on great digital and gorilla marketing strategies to ensure your customers know you exist. Creating first impressions can be more difficult as well, so your marketing strategies need to clearly highlight your unique personality and differentiators.”

Rowe agrees that becoming an expert “at all things digital and social media marketing” is a good way to get ahead of this type of challenge. “Overspend on your ‘grand opening’ to increase the rate of new trials,” he added. “The key will be highly effective digital and social media marketing.”