Financial Data
Updated 19 Feb 2018


Start a service franchise: Cash in on these 3 successful models

If you thought all the money was in fast food, think again. Consider switching your focus to a service franchising as a profitable business investment.


Diana Albertyn, Entrepreneur, 10 February 2018  Share  0 comments  Print


Related stories


All the answers to your unique business lifestage questions

There are important considerations to make when choosing to buy into your first franchise. Sure, everyone’s going for the restaurants, grocery stores, and other product-based concepts, but is that really where the money is?

“The franchising services sector has shown healthy growth despite challenging economic times,” says Sybrand Bezuidenhout, business development manager franchise: services, Barclays Africa Group.

“All indications are that it will continue to grow and positively contribute to the economy – especially if franchisees focus on providing quality products and top-class customer service.”

Take advantage of ‘the lipstick effect’ – where consumers are more likely to spend on little luxuries such as lipstick (or renovating instead of buying new homes, or keeping their cars for 10 years instead of five) as opposed to making big purchases in dire economic times – by investing in the following service franchises, to experience good returns, even when product franchises aren’t:

1. Harness the power of pampering

When money’s tight, consumers tend to cut down on so-called ‘luxuries’, but they don’t deny themselves the odd indulgence. People still strive to spoil and pamper themselves, the difference is the price tag.

“The change is seen in what their hard-earned money is spent on,” says Bezuidenhout. “For instance, rather than going to a spa, a woman will choose to get her nails done. That way, she still feels she is treating herself, but at a fraction of the cost.”

Sorbet, a branded chain of health and beauty salons, nail bars and dry bars, is on almost every corner for a reason – people are using its services, even when disposable income is low. It not the cheapest treat, but also not the costliest.

Related: 3 Steps to ensure your franchisees flourish your support system

2. Build a future-proof franchise

A recession isn’t the ideal time to start renovating or building your dream homes, but a wise franchisee knows that it’s not when you start a construction services business, but where. ‘Location, location, location’, so goes the real estate adage.

Have you noticed a suburb where newly built complexes and houses are springing up lately? This could be your new premises. “Building franchises specifically, perform much better in these because home owners are more likely to undertake work on their homes,” says Bezuidenhout.

Silverline Group provides construction services including architectural support, detailed shop drawing design, structural engineering, quantity surveying, distribution, and construction.

3. Older cars, more servicing

As the fleet of cars on South Africa’s roads get older, auto services franchise groups are soaring in popularity. You can join them if you effectively market your competitively priced services as a viable alternative to dealerships.

Related: Factors to consider before signing up as a franchisee

“Even if the economy shows unexpected recovery and growth, the auto services franchise industry will still thrive as higher disposable income will see a new wave of entry level consumers who will replace those customers who upgrade their vehicles to new ones under maintenance plan,” explains Bezuidenhout.

Car Service City, specialists in affordable service and repairs, is fast becoming one of South Africa’s leading car servicing groups, according to FASA. Its rapid growth is owed to exploiting a gap in the market and running with it.

Entrepreneur Mag Logo

Copyright is owned by Entrepreneur Media SA and/or Entrepreneur Media Inc.
All rights reserved. Click here to read our editorial disclaimer.

Rate It12345rating

About the author


Diana Albertyn, Entrepreneur


Introducing the opportunities for franchising in Africa

The African market continues to grow and develop, offering business owners opportunities to expand their franchising brands into the continent. Philip Myburgh, Head of Franchising, Rest of Africa for Standard Bank discusses these franchising opportunities and how the bank is uniquely positioned to assist you and your business with your franchise expansion into Africa.

Login to comment