Pros/ cons of buying franchisees vs non-franchisee businesses

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August 28, 2022

by a searcher from University of Mumbai in Dallas, TX, USA

I'm pursuing a roll-up of remodeling/ home services businesses ~ $1-5M range and was focused on non-franchisee businesses: but some franchisees for sale out there are quite profitable, high growth and attractively valued: so thats making me take a second look

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Reply by a searcher
from University of Pennsylvania in Portland, OR, USA
I bought a 25+ year old residential service plumbing franchise and am very pleased 1 year later. Since you referenced your aspirations to roll-up businesses you need to be cautious about taking the franchise route. Many of the strongest home service franchise brands are owned by parent companies with broad portfolios of trade businesses. Research Neighborly as an example. Buying into one of the franchise brands requires signing an agreement not to own businesses that compete in the other categories of the parent company.
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Reply by a searcher
from Texas A&M University in San Antonio, TX, USA
I’m considering an existing franchise, but not in that space. I couldn’t do a franchise with a restricted service area. If customer A has a good experience and tells friend B to use you, but they live outside your territory, you can’t do it. Unless you rolled up the territory for an entire metro area.
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