Buy or Build a Franchise? Franchise Management Tips for Service Businesses

A recent article in the New York Times’ Money section entitled “How to Get Rich by Buying Franchise (Really)” analyzed the difference between franchise businesses and standalone brands, and the benefits of each. Is it better to buy into an existing model, or build a franchise of your own?

While the article provided a number of examples of franchisees who have thrived, even through a recession, it also cautions about the choice of industry. “Potential buyers should look carefully at federal disclosure forms that are required for franchises, paying particular attention to Item 19, which addresses the return on investment and the unit economics, said Jeff Johnson, founder and chief executive of the Franchise Research Institute.”

Franchisor or Franchisee?

When entrepreneurs have a winning idea of their own, becoming a franchisor and managing the concept while collecting fees from licensing and revenues might be a good business model. In the NYT article, Vonigo’s CEO John Carter highlights some of the key differences between buying into or starting a franchise. Here’s an excerpt:

“There’s a difference between a technician — someone with expertise in a certain field — and someone who has business expertise,” Mr. Carter said. “Just because someone is a great mover doesn’t mean they should be building a moving franchise.”

An entrepreneur needs to have some experience before starting a franchise. “It’s the business elements that count the most: sales, marketing, finance, technology, systems, human resources and who you have on your team,” he said.

Mr. Carter pointed to one of his clients, Velofix, which provides bicycle repair at people’s homes. “They’ve been able to scale their franchise operations with a centralized call center with just a handful of people,” he said. “They’re driving most of their people to book online.”

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The Plumber Who Bought a Franchise and Got Rich

The article begins with an anecdote about a plumber named Dan Gagne. He bought a Benjamin Franklin Plumbing franchise location, and he credits their systems and advice for his success. He hasn’t had to lift a wrench himself in years, and he has a staff of over 100.

“The income is more than I’d ever imagined,” Mr. Gagne, 54, said. “I own several homes. We’ve invested in eight acres in Costa Rica and are going to build a health spa. We live there about six months of the year.” He credited his wealth not to his skill as a plumber but to his being part of a national franchise, Benjamin Franklin Plumbing.

That kind of endorsement makes the idea of buying into a franchise very attractive indeed, especially a home services franchise.

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How Companies Like Velofix Build a Franchise

One the other hand, growing one’s own successful brand has even bigger upside potential. Velofix, who were founded in 2013, has been named the fastest-growing service franchise by Entrepreneur Magazine and has sold over 120 franchises in six years.

What helps attract franchisees to Velofix’s network isn’t simply the cool mobile bike shop vans. Though we admit, they are exceptional — it’s the systems they use. Velofix offers customers (and franchisees) a centralized booking environment. The customer books a bike tune-up online at Then the area franchisee gets assigned the job on the calendar during their available time.

“Vonigo has allowed us to activate multiple locations easily while maintaining the same look and feel on the front end,” says Velofix Co-founder Boris Martin. “A customer booking online in LA gets the same experience as someone booking in NY.”

Start and Build a Franchise

Interested in learning more about what it takes to build a franchise, or about how franchises operate? We’ve published a number of articles about franchises, including:

Learn More About Franchise Management Software

Want to learn more about the software that franchises like Velofix, Sir Grout, and Men In Kilts use to operate their franchises? Book a free, private demo of Vonigo.