Professional Service Franchises: Pros and Cons

Professional Service franchises may seem a stretch of the imagination to some, but in reality they exist and prosper all over the country. Some examples of professional service franchises (i.e., owned and/or staffed by licensed professionals) include real estate companies, hair salons, accounting firms, and education centers. Doctors are even getting in on the action!

The franchising model, where a business operates under a common brand with consistent operating methods and standards, applies well in the service industry, including the medical field. It’s not a new phenomenon in franchising, although the trend of integrating the services of medical professionals into certain types of businesses has drawn attention and brought it to the forefront.

Professional Franchise Examples

Medical Services. While senior and home care franchise businesses generate a large amount of revenue, many other types of franchises also provide health care and ancillary health care services. Examples include services provided by chiropractic, optometric, and other medical doctors, registered nurses and doctors providing care in rapid-service clinics, and doctors and nurses supplying medical treatment services within senior care facilities.

Real Estate Firms. Most states have licensing and continuing education requirements for real estate agents. More extensive requirements apply when a agent or broker owns or manages an office of agents. Nearly 50% of real estate agents are affiliated with franchised companies.

Skilled Trades. In most states, franchises in fields such as building trades, remodeling, plumbing, and restoration services require contractor licenses. Examples in this category of franchises include handyman services and home inspection companies.

Accounting Firms. Accountants and bookkeepers in most markets are required to meet education and licensing requirements in order to practice. Affiliating with a franchised accounting firm may appeal to small firms or independent accountants who lack the time or expertise to gain new clients and increase business on their own.

Teaching. Most jurisdictions specify minimum education requirements and require a teaching certificate for those providing educational services to children. Tutoring and education centers are becoming more common in the franchising world.

Salon Services. In most states, a professional license is required to provide cosmetology services such as hair and nail services. Hair styling franchises have been popular for quite some time.

Advantages of Operating a Professional Service Franchise

The biggest advantage of a franchise with professionally licensed staff is that competition may be lacking compared to other fields. Because licensed staff may be more difficult to recruit/hire, there is a barrier for potential competitors to enter the field. This happens especially when the process of obtaining the required license is arduous, such as in the medical field.

Another advantage is that repeat business is quite common in professional service franchises. After the initial customer base is built during the start-up phase, business is often not hard to come by.

Disadvantages of Operating a Professional Services Franchise

As mentioned above, a significant challenge for the owner of a professional service franchise is staffing the business. Due to the particular field’s licensing requirements, there is likely a smaller pool of qualified employees as compared to other (non-licensed) businesses. Retaining employees may also be a challenge if there is more demand than supply in the field. Thus, labor costs tend to be higher than average in these businesses.

It may also be challenging to “retrain” licensed professionals to conduct the business according to the franchisor’s particular, standardized method of doing business. Licensed professionals are likely to have their own opinion about how things should be done in their field. This potential resistance can wreak havoc for a franchise brand, which requires consistent operating standards and methods.

Bottom line: is it a good move to get into a business with professional license requirements? It all depends on what you want to accomplish through business ownership. Make sure you do a self-assessment at the beginning of your process, to identify and define your goals and preferences. A professional service franchise may be just what you’re suited for.