Home improvement franchises are businesses that provide services related to the improvement, remodeling, or repair of homes. Examples of businesses that fall under this category include companies that specialize in roofing, flooring, painting, kitchen and bathroom remodeling and landscaping, as well as companies that offer general contracting services. Some popular home improvement franchises include USA Insulation, Ace Hardware, California Closets and Sherwin-Williams
Profitability Of Home Improvement Franchises
Owning a home improvement franchise can be a profitable business opportunity, but it depends on a variety of factors and requires a significant initial investment. According to a report by Franchise Business Review, the average franchisee with a home improvement franchise earns an annual income of $97,000. However, this can vary greatly depending on factors such as the franchise's fee structure, marketing costs, and the size of the business.
It's also important to note that owning a franchise requires an initial investment, and the cost of starting a home improvement franchise can vary widely. Additionally, many home improvement franchises require ongoing royalties and other fees that can add to the cost of running the business.
The home improvement franchise industry has seen several trends in recent years. Some of these trends include:
Trend 1: Growth in the industry: According to a report by IBISWorld, the home improvement franchise industry has been growing at an average annual rate of 3.2% from 2016 to 2021.
Trend 2: Home renovation boom: The COVID-19 pandemic has led to a boom in home renovation as more people are spending time at home. According to a report by Zillow, home renovation spending is expected to reach $340 billion in 2021, a 14% increase from 2020.
Trend 3: Increase in online sales: Many home improvement franchises are seeing an increase in online sales as more people shop for home improvement products and services online.
Trend 4: Focus on sustainability: Many home improvement franchises are focusing on sustainable products and practices, such as energy-efficient windows and solar panels. According to a report by the National Renewable Energy Laboratory, the U.S. solar market is expected to double by 2023.
Trend 5: Increase in DIY projects: With more people staying at home, the number of people undertaking DIY projects has increased. According to a report by the Home Improvement Research Institute, the DIY market is expected to reach $329 billion by 2025.
It's worth noting that these trends may vary from region to region, and depending on the specific franchise. It's essential to research the tutoring industry and your specific market before starting a business, which you can do with the help of Franchise Clues.
Initial Investment And Opening Costs For Home Improvement Franchises
The initial investment and opening costs for home improvement franchises can vary widely depending on the specific franchise and the location of the business. Some franchises require a relatively low initial investment, while others require a significant investment. The costs also depend on the size of the location, if the location is already built or if it requires building a new one, the inventory, and many more factors.
Here are a few examples of initial investment and opening costs for some popular home improvement franchises:
Mr. Handyman: The initial investment for a Mr. Handyman franchise ranges from $95,000 to $225,000, with an initial franchise fee of $49,500.
Kitchen Tune-Up: The initial investment for a Kitchen Tune-Up franchise ranges from $50,000 to $90,000, with an initial franchise fee of $49,500.
Here is a more specific idea of the costs involved in starting a home improvement franchise:
Initial Franchise Fee: This fee can range from $10,000 to $100,000 or more, depending on the franchise.
Real Estate: For a typical retail location, the cost of leasing or purchasing a space can range from $100,000 to $500,000 or more.
Equipment and Supplies: This can include the cost of fixtures, furniture, signage, inventory, and other equipment necessary to set up and run the business. The cost can range from $50,000 to $200,000 or more, depending on the size and scope of the business.
Training: The cost of attending the franchisor's training program can range from $2,000 to $10,000 or more, depending on the length and location of the training.
Legal and Professional Fees: This can include the cost of legal and accounting services, as well as any other professional fees incurred during the startup process. These fees can range from $5,000 to $15,000 or more.
Marketing and Advertising: The franchisor may require the franchisee to contribute to a marketing and advertising fund, which can range from 2% to 4% of monthly sales.
Working Capital: This is the amount of money needed to cover operating expenses before the business begins to generate positive cash flow. The amount can vary greatly, depending on the franchise and location, but can range from $50,000 to $100,000 or more.
It's worth noting that these costs can vary depending on the location, size of the business, the franchise package and other factors, so it's important to research and consult with the franchise company for more accurate numbers.
Benefits Of Opening An Home Improvement Franchise
Opening an home improvement franchise can offer several benefits to entrepreneurs. Some of these benefits include:
Established Brand: One of the main benefits of opening a home improvement franchise is that the business is already established and has a recognizable brand. This can make it easier to attract customers and build a reputation in the community.
Proven Business Model: Franchise companies have already established a successful business model, which can be followed by the franchisee, this way the franchisee can focus on running the business instead of figuring out how to make it work.
Training and Support: Franchise companies provide training and support to franchisees, which can help new business owners learn the ins and outs of running a home improvement business. This can include training on marketing, sales, customer service, and financial management, as well as ongoing support in areas such as accounting and legal compliance.
Marketing and Advertising: Many home improvement franchises have national or regional marketing campaigns, which can help drive customers to the franchisee's business. This can be especially beneficial for new business owners who may not have the experience or resources to develop their own marketing campaigns.
Buying Power: Franchise companies often have buying power and can offer better prices on products and services, which can help franchisees save money on inventory and other expenses.
Access to proprietary technology, software, and tools that can help the franchisee manage the business more efficiently.
Established relationships with suppliers, vendors and other industry players that can help the franchisee save time and money.
In addition to the general benefits of opening a home improvement franchise, there are also several niche-specific benefits that can be gained depending on the type of home improvement franchise. Here are a few examples:
Roofing and Siding: Franchisees that specialize in roofing and siding may benefit from the ability to offer customers a wide range of products and services, such as roof repair, replacement, and maintenance, as well as siding installation, repair, and replacement. They may also benefit from the ability to offer customers energy-efficient products that can help them save money on their energy bills.
Painting: Franchisees that specialize in painting may benefit from the ability to offer customers a wide range of services, such as interior and exterior painting, as well as specialized services such as staining and finishing. They may also benefit from the ability to offer customers eco-friendly and low-VOC paint options. A very good example of a franchise opportunity specialized in painting is WOW 1 Day Painting.
Flooring: Franchisees that specialize in flooring may benefit from the ability to offer customers a wide range of products and services, such as hardwood, tile, carpet, and laminate flooring installation, repair, and maintenance. They may also benefit from the ability to offer customers eco-friendly and sustainable flooring options.
Landscaping: Franchisees that specialize in landscaping may benefit from the ability to offer customers a wide range of services, such as lawn care, tree trimming, planting, and maintenance. They may also benefit from the ability to offer customers sustainable and eco-friendly landscaping options.
Handyman/General Contracting: Franchisees that specialize in handyman or general contracting services may benefit from the ability to offer customers a wide range of services, such as home repairs, remodeling, and maintenance. They may also benefit from the ability to offer customers flexible service packages that can be tailored to meet their specific needs.
What Points To Pay Attention To When Opening An Home Improvement Franchise
When opening a home improvement franchise, there are several key points to pay attention to:
Marketing and Advertising
The points above are the general points, now more category specific ones:
Services offered: It's important to have a clear understanding of the services offered by the franchise, and to ensure that they align with your skills, interests, and experience. It's also important to understand the demand for those services in your local market, and to consider how you will differentiate your business from competitors.
Product offering: Many home improvement franchises offer a wide range of products, such as roofing materials, flooring, paint, and hardware. It's important to have a clear understanding of the products offered by the franchise, and to ensure that they align with your local market. Also, it's important to understand the cost of the products offered and the pricing strategy of the franchise.
Staffing: It's important to have a clear understanding of the staffing requirements of the franchise, and to ensure that you have the necessary personnel in place to run the business. This includes understanding the number of employees required, their roles and responsibilities, and their qualifications.
Insurance and liability: As a home improvement business, you'll be responsible for ensuring that your employees and customers are safe while working on the property. It's important to have a clear understanding of the insurance and liability requirements of the franchise, and to ensure that you have the necessary coverage in place.
Project management: Many home improvement franchises involve working on multiple projects at once. It's important to have a clear understanding of the project management systems used by the franchise, and to ensure that you have the necessary tools and processes in place to manage projects effectively.
Industry Standards: Home improvement industry is regulated by a set of standards and guidelines, including building codes and safety regulations. It's important to have a clear understanding of the industry standards and to ensure that you comply with them.
Partnerships: Many home improvement franchises have partnerships with suppliers, vendors, and other industry players that can help the franchisee save time and money. It's important to have a clear understanding of these partnerships and to ensure that they align with your business strategy.
It's always recommended to conduct thorough research and consult with the franchise company, a lawyer, and an accountant before making decisions.
Floor Coverings International
WoW 1 Day Painting
Javier is an experienced franchise industry professional with a focus on development, operations, and performance. With almost a decade of experience in the industry, he has witnessed both the successes and failures of franchise owners. Javier strongly believes that buying a franchise is not just an investment, but a life-changing event that presents a unique opportunity for personal and professional growth. He enjoys helping aspiring franchise owners navigate the decision-making process and increase their chances of success.