A SMORGASBOARD OF HOME SERVICES TO CHOOSE FROM

Home Services in New Zealand and Australia have grown tremendously in the last 20 years and home services franchise systems are numerous in number and choice.

Not only did the 2021 Survey of Franchising in New Zealand prove that New Zealand is still the most franchised country in the world per capita but it also confirmed the number of franchised brands by sector.

The choice of franchises in the home services area includes administrative and support services, home services, scientific and technical services, and hiring and real estate services.

The choice of home services brands includes At Your Request; Central Landscape and Garden Supplies; Cleancorp; Clean Planet; Cleanrite; Cleantastic Commercial Cleaning; Cookright Kitchen Services; CrestClean; Crest Property Care; Crewcut; DrainPro; Exceed Franchising; Fix It Building Services; Green Acres; Meticulous Home Services; Mr Green; MYGuy; Poolwerx; V.I.P.Home Services; Wet-seal and Window Treatments and that list is not exhaustive.

It is important for prospective franchisees to find out a lot of information from any home services franchisor and such information should include the following:

∙ Company's financial health and history

∙ How long it has been franchising

∙ Long term viability of service

∙ Type and level of head office support

∙ Full details of the training provided

∙ Whether training is an extra cost

∙ Total cost of taking up the franchise

∙ Realistic working capital needed

∙ Permission for bank references and other referees

∙ Territorial practices and exclusivity terms

∙ Types and amounts of advertising support

∙ Any need to buy products from the franchisor

∙ Target obligations

∙ Realistic profit and loss figures

∙ Management services or royalty payments

∙ Operating restrictions

∙ Launch assistance

Some home services franchises offer guaranteed income.  Personally I do not like it as when I have acted for a number of franchisees in the past there has been a difficulty in getting some franchisors to make a payment of the shortfall in relation to guaranteed income.  For example, let us say that a home services franchisor guarantees income of at least $800 per week.  Normally that would be averaged out over a three month period.  If at the end of three months income was below $9,600 (being $800 x 12 weeks) then the franchisee would activate the guaranteed income clause and claim for the shortfall of whatever the figure is.  A number of franchisors buck at paying out anything to franchisees and that will cause mistrust in a franchise system.  It is safer not to have any guaranteed income in my opinion.

Be Wary

A prospective franchisee should be wary if the franchisor does any of the following:

∙ Promises huge profits with thin investments

∙ Says "act now to get in on ground floor"

∙ Fails to give statistics on sales/profits

∙ Promises 'easy sales'

∙ Fails to identify directors or principals

∙ Tries to 'trade you up' to a higher fee

∙ Says "act now, it'll cost more later"

∙ Promises profits by sub-franchising

∙ Has a name similar to a well-known business

∙ Promises large income from 'work at home'

∙ Demands a large upfront franchise fee

∙ Has very short term contract

∙ Provides no data on track record or financial strength

∙ Cannot give plans for future development

∙ Has vague territories

∙ Is ignorant of competition

∙ Has incomprehensible contract

∙ Is vague about support and training

∙ Has weak advertising

∙ Is vague about financial obligations for the franchisee

∙ Has poor head office premises

∙ Tries to meet in a hotel

∙ Is evasive about access to existing franchisees

I predict that the number of home services franchises will continue to grow in both Australia and New Zealand.  People are working harder in their employment so they value their leisure time.  What better than having a home services franchisee mow your lawns, wash your windows, clean the pool and do the ironing!

I just love home services and may they continue to grow and multiply in both countries.