The cleaning and restoration industry continues to encompass a greater share of the market, but with fewer unique brands. At every turn, it seems like there’s a merger and acquisition (M&A) taking place, earning our industry the reputation for being consolidation friendly. But, when it comes to franchise ownership — individuals running their own business within an established brand — the number of companies within our industry is actually on the rise.
This may sound counter-intuitive, but fewer brands with a greater number of franchise businesses is actually stretching the boundaries of what our industry can accomplish. Here’s what I see happening in cleaning and restoration — and how emergency services businesses are empowering individuals to take processes and innovation to the next level.
The Thrill of the Ride
Entrepreneurs have long been interested in franchise business opportunities. Some come for the autonomy while others want the scheduling freedom, but everyone is energized by the dream of growing a company. While taking on the risk of starting a new entity can be daunting, the support of an established parent brand can make all the difference between restless worry and peaceful sleep. The thrill of business ownership is much less risky when you can start with best practices, a supportive network, and a track record of customer demand.
A quick look at respected industry stats proves my point. By year end, the total number of franchise businesses is predicted to increase by 3.5%, which nicely translates into a net gain of 26,000 new businesses and approximately 800,000 new jobs. That’s 26,000 new owners and operators who have room to compete and grow in the marketplace. What a wonderful reality it is to know that thousands of individuals will see their business ownership dreams come true. What’s even more impressive is the fact that with these new businesses, the total number of franchises around the U.S. will hit 780,188 — an astounding 6,585 more than we saw in 2019 before the pandemic.
Growth and Demand – Even During a Pandemic
Across the nation, the industries that are seeing growth for franchise ownership are real estate; retail food, products, and services; businesses services; and commercial and residential services.
After witnessing the devastating employment losses brought on by the COVID-19 pandemic, many entrepreneurs and business owners came to the conclusion that the best way to protect their paychecks was to be in charge of them. As a result, we’ve found that more people now than ever are interested in being their own boss.
Franchise ownership is key to this level of security.
Stellar Brands Example
The growth we’re seeing at Stellar Brands reflects this greater trend in business and residential services. Stellar Brands is the parent company of Restoration 1, bluefrog Plumbing + Drain, The Driveway Company, and Softroc. We formed this umbrella company to seamlessly integrate future acquisitions, but it’s more than that. By creating a platform to facilitate the steps to owning and operating a company, we can offer franchisees economies of scale so they can provide an enhanced customer experience with brand consistency and service. Our brands are all focused on cleaning, restoration, and repair, which means they complement one another. This strategic alignment enables our franchise owners to refer other businesses within our platform, which then creates opportunity and growth for the business owners, our umbrella company, and the industry as a whole. After all, there’s great power in numbers.
Today, our portfolio represents 375 franchises — and we plan to keep expanding within our existing brands as well as other brands that align with our portfolio of service offerings.
Stellar Brands acquired Restoration 1 and bluefrog Plumbing + Drain in April 2020, just as the pandemic started to escalate. Why expand during a pandemic? Because business and residential emergency services is a pandemic-resistant industry, and we saw the timely opportunity to grow these brands and offer more franchise opportunities.
It’s Good to Be the Boss
Because of the continued demand for business and residential services, our company has seen a striking increase in the number of people interested in franchise ownership over the last year-and-a-half. Even with a global pandemic, record-breaking storm season (at least 30 hurricanes across the U.S.), and unprecedented wildfires, emergency services for homes and businesses has proved essential. As a result, the demand for the services our brands provides has skyrocketed.
What we do in cleaning and restoration has staying power. Our industry isn’t promoting luxury services. Home and business owners need help with water damage, mold removal, plumbing, driveway repair, and residential surfacing today …. and they’ll still need these services tomorrow. Regardless of how much M&A activity happens in our industry, it is critical that franchises position themselves to meet the demand.
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