According to IBISWorld, the U.S. Property Management market is worth $99.4 billion. Even before the uncertainty of COVID-19, the market was in good standing. Due to the health of the industry, it’s projected that the property management market will maintain its value through economic recovery. For those looking to diversify their portfolio with a property management investment, now is a great time. However, not all property management franchises are the same. We break down what to look for when researching the right investment for your portfolio.
THE RIGHT CLIENTELE
A property management franchise could have more than one type of client. Some opportunities my specialize in one area, while others may have multiple property types. There are pros and cons to both. Having a strong focus in one area makes you an expert within that niche market but could potentially limit your earning ability. However, managing many types of commercial and residential properties may cause you to burn out. It’s imperative to do extensive research prior to getting too far in the franchise discovery process so you know what you’re most comfortable with.
A COMPREHENSIVE BUSINESS MODEL
As a prospective owner, you’ll want to make sure you understand the franchisor’s business model. Does the business seem simple and easy to run? Is it scalable? These are questions the franchisor should be able to answer quite readily. If it seems like the model is convoluted, it might not be the best opportunity.
For example, MY SALON Suite’s business model is simple and effective. Our franchisees own a commercial space and renovate it to have multiple rooms. These spaces are then rented to budding entrepreneurs in the beauty industry. MY SALON Suite franchisees don’t have to stress about hiring or payroll. They act as the landlord and collect rent from the tenants of the spaces. Many franchisees own more than one location – with a manager handling the day-to-day activities – since the business is easily scalable and only requires owners to work about five to 10 hours weekly!
FINANCING OPTIONS
Some franchisors may have in-house financing, but many don’t. Instead, franchises that do not have in-house financing have partnerships with banks and lenders to help prospective franchisees fund their new investment.
MY SALON Suite does not have in-house financing. However, we do have a team of professionals who are prepared to help you get your financial planning organized.
TRAINING & SUPPORT
Every franchisor will tell you they have a comprehensive training and support program. It’s important to ask questions about what that entails and exactly how the franchisor will be supporting you as a franchise partner. Will there be in-field support? Who can you call should you run into a problem? Are there refresher training courses after the initial training before opening? These are all important questions to ask during the franchise discovery process.
You’ll also be able to refer to the Franchise Disclosure Document (FDD) for further understanding of what the franchisor is responsible for within the contract.
SATISFIED FRANCHISEES
A very important part of your research will be talking to existing franchisees about the franchise you’re interested in. The franchisor should be able to give you contact information of franchisees you can meet with. You’ll want to ask these business owners about their experience with the franchisor from opening until present day. You can also ask them questions about the financials (i.e., When did you break even? What does a slow week of sales look like? Etc.) Learn why they chose this franchise over competitors and what a typical day looks like.
AN ALTERNATIVE TO A PROPERTY MANAGEMENT FRANCHISE
Starting a salon suite business is a great alternative investment to property management. With over 200 locations across the country, MY SALON Suite is a leader in the salon suites franchise business.
We look for franchisees who have a net worth of $1 million with $200,000 in liquid assets. Best part? No previous salon business experience is required! At MY SALON Suite, we teach you everything you need to know about owning a salon suite business. We’ll help you find the perfect site for your salon and teach you what to look for when recruiting members.
We have franchisees of all different backgrounds who have found the MY SALON Suite opportunity prosperous and rewarding. Many don’t spend more than 10 hours a week on their business and have been able to enjoy retirement, work on other ventures, or even keep their full-time job in conjunction with their salon.
To learn more about our franchise opportunity, request more information today.