Top 3 Franchise Opportunities in Washington for January

 

  1. Commercial Cleaning

Outsourced cleaning services are primarily used in corporate offices and retail outlets. It is a growth industry riding on the post-recessionary increase in the number of new businesses and investments in non-residential real estate. Commercial cleaning services commonly provide nightly or weekly dusting, vacuuming and other cleaning services for workplaces. This attractive opportunity provides an easy-to-scale B2B model with recurring revenues.

According to the US Census and IBISWorld estimates, more than 90.0% of commercial cleaning/ janitorial establishments are sole proprietorships or non-employing businesses. This is primarily due to the low barriers to entry, including low capital intensity. However, being part of a recognized or larger franchise brand does give a significant advantage in getting larger and more specialized contracts. It also enables the owner to leverage key best practices to scale the business in a competitive landscape. Other success factors include,

  • Ability to understand and control the mix of labor, material and cleaning supplies costs depending on the needs of the clients
  • Ability of the business to move away from price sensitive clients and short-term contracts to more strategic arrangements with niche customers
  • Ability to keep the cost structure, employee turnover and accounts receivables low

The industry has very low-barriers to entry and a growing number of employers and non-employers competing. Keys to success are strong brand recognition and specialization or solution selling.  Eco-friendly services are growing in demand. An aging demographic is creating higher demand for cleaning services in healthcare facilities.

Advantage for Franchise Owners

Most corporations or multi-site clients prefer to sign strategic contracts with national franchises for uniformity of service across locations. Also, property managers tend to prefer franchises because they are more likely to provide integrated services like landscaping, window cleaning, deep carpet cleaning, stripping and waxing floors, building management and even, security services. Executive franchise models position the owner to work on the business, not providing cleaning services themselves.

2. Staffing 

The external drivers for this sector are unemployment rates (since temp workers are the first to be laid off) and business profits (which has shown a nice bounce back in Washington since the recession).

Contingent workers generally present less risk for a business than permanent employees, especially during times of economic uncertainty. Meanwhile, businesses with highly seasonal performance have been better able to manage their work by hiring temporary staff, thereby allowing them to quickly expand or shrink their workforce in line with seasonal demand for their product or service.

Affordable Care Act (ACA) had raised the healthcare costs for staffing agencies and, on the other hand, made it more attractive for employers to hire via temp agencies. Temporary nurses, insurance claims processors, and administrative staff demand are all forecasted for growth. The rise of the gig or freelance economy and a cautious economic recovery has led to temporary staff becoming a permanent fixture in corporate ecosystems.

Over time, demand has shifted away from more traditional office and clerical workers due to changes in office technology (including computerization and mobile communication). For example, some manufacturing companies have increased their demand for temporary workers due to their just-in-time (JIT) manufacturing processes to meet seasonal or other peak demands.

In addition, more people are joining the temporary workforce due to lifestyle choices, family or other commitments. Professionals, skilled workers and managers are growing segments of the industry in light of these changes.

A growing number of job seekers are using temporary staffing services as a stepping stone for a more permanent position. According to American Staffing Association’s 2014 survey (latest data available), 34.0% of respondents who had previously worked for a temp staffing agency were offered a permanent position by their client at the end of their tenure.

The success factors in this market are building a loyal client base for repeat business, rapid delivery and supply of flexible, reliable and appropriately skilled workers who are available at short notice for placement.

A client typically chooses a staffing firm due to its suitable supply of qualified, trained or experienced staff who are available at short notice. Offering high service levels and flexible solutions is key.

Advantage for Franchise Owners

Small industry players do not have access to major clients that generally use larger agencies with a pre-existing national or global networks.

Furthermore, many well established operators provide clients with a full range of employment services that go far beyond temporary staffing, to include permanent placement, executive search, outplacement services and leadership training. Clients that seek these value-added services are more likely to work with a larger firm that has the resources to provide the full range of employment services.

Furthermore, finding a suitable pool of candidates can be difficult for entrepreneurs (non-franchisee) looking to enter the industry. Most temporary workers tend to work with staffing agencies where they have had prior success.

3. Tutoring

With two-person income households suffering the lack of time in a robust economy, the demand for quality tutoring delivered in a flexible format has never been higher in the Puget Sound area.

Parent concerns about the quality of public school education has traditionally fueled the demand for after-school tutoring. Facility-based learning centers can offer multiple services including subject based tutoring, general academic coaching and test prep .

Advantage for Franchise Owners

Following the downturn, it can be risky to open an independent tutoring businesses. Consider managing that risk with one of the proven business models in the tutoring and test preparation franchise category.

National brand recognition, effective customer acquisition strategies, and smart use of technology are some reasons tutoring franchises have become increasingly popular over the past five years. Franchisors also offer efficiencies to owners purchasing materials, enabling franchisees to offer more competitive pricing to customers while realizing better margins than many independent business owners.  Some franchise models include proprietary assessments to determine the appropriate learning plan for each student.

 

 

Not So Distant Cousins – The Story of Uber and Supercuts

über and supercuts

A late adopter, I recently had my first Uber customer experience. I was actually tagging along with a friend who hailed a ride to the airport in about thirty seconds on his phone. He never took his wallet out. It was impressive. Uber’s current value of $60 Billion is even more impressive.

Trends involving how people work in Washington are evolving quickly. Katy Steinmetz’s Time magazine article describes the gig economy, the on-demand economy and certainly the sharing economy. Consumers who want certain things (products and services) are connected to other individuals who offer them for a price. Rather than an employer like Boeing hiring W-2 employees, technology platforms like Uber have created software that brings people together at a lower cost and greater convenience than through traditional taxi companies. Uber is one of the fasted growing start-ups ever. And, it’s not social relationships and the greater good. It’s about the efficiency that technology can create. So, the sharing economy might be better described, the Access Economy.  Uber isn’t really sharing much. It is providing access.

For those providing services in the Access Economy; flexibility and independence are top reasons to enter the space versus traditional employment. Most of these folks have more than one source of income. Some struggle to make as much money as they did as employees, others thrive with no limit on their income. A low barrier to entry creates lots of competition that further drives the price down.

So, what does all this mean to someone in Washington considering a career re-invention and investment in a proven franchise model like Supercuts? A white collar franchisee candidate wants the same things – financial independence and flexibility. If they can find a franchise investment opportunity where their strengths and experience can be leveraged in a way that creates reasonably predictable results and financial return that can be a very compelling career option! However, the barrier to entry is not only the up-front franchise fee. It’s having the competencies and temperament required to be awarded a franchise in the first place. As a specialist in franchise operations, my work resembles a good executive recruiter looking for the best matches possible. The right fit drives success.

The ongoing royalties in exchange for the rights to use a brand name like Supercuts and for access to proprietary systems and technology bear striking resemblance to the commissions drivers pay to Uber corporate. But the initial and on-going support and training from the franchisor to ensure the brand is protected through consistent consumer experiences is a big difference, among many. If you are considering a different career path, think about control over your own future – do you want it and how much you need to be happy.

I am facilitating a business ownership forum workshop on Tuesday, March 2nd in Mercer Island. To register for this event and learn more about no-cost local expert franchise advice in Washington from Charlie Magee and FranNet of Washington, visit: http://wafranchiseexpert.com/calendar/.

How Big Is Franchising Anyway?

The number of franchise establishments in the United States has grown to 781,794 – the highest it has ever been. Along with the steady growth, the International Franchising Association (#IFA) projects the industry to continuing its impressive expansion for a fifth consecutive year.