26,000 New Franchises Expected To Open Nationwide After Pandemic, Profit Margins Explode | Business


A longtime worker in the manufacturing industry, Sandy Embroli wanted to develop her own business and went to the Small Business Development Center at the University of Louisiana at Lafayette.

But what type of business? This, of course, was important. So director Heidi Melancon launched it with a basic idea.

“She asked me if I had ever thought about the franchise,” she said.

There was a handful that she passed on. A flowered tent. A cleaning company. A practice company. But something in that other’s name sounded catchy: College Hunks Hauling Junk and Moving. The company specializes in exactly what is in the title. And the “Hunks” is an acronym: Honest Uniformed Nice Knowledgeable Service.

The company has branches in the United States and Canada and markets itself as the only full-service residential and commercial service company that offers moving, garbage removal, donation, pick-up and maintenance services. hourly work. What started as two college buddies with a broken van is now a franchise business that tries to stand out from the crowd in the moving industry by being environmentally friendly – either by donating unwanted items to a company. local non-profit organization or by recycling them.

It also emphasizes building leaders, another aspect that caught Embroli’s attention.

“The name is catchy,” said Embroli, a Lafayette native who opened the business in June. “The core values ​​of the franchise are in direct alignment with my own core values. I also wanted to be a teacher when I was little, so I achieve this by mentoring young people. Another fundamental value is to create a fun and enthusiastic working environment. I like to have control over the culture of the company.

Franchised businesses have grown into big business in recent months as the effect of the coronavirus pandemic on the economy has resulted in a displacement of the workforce. There has been a greater demand for franchises, especially home services, said Bob Breaux, franchise consultant for Baton Rouge-based FranNet and a native of Lafayette.

The International Franchise Association has estimated that 26,000 new franchise locations will be added this year, up 3.5% from 2020.

Breaux said he is working with more than 250 different types of franchisors to try to recruit more franchisees. Typically, people looking for a franchise pay for a process in an area that has been screened for the right demographics.

“There has been tremendous growth in the area of ​​services, as homes, yards, windows, bathrooms and kitchens have exploded,” Breaux said. “People don’t want to mow their own lawns or clean their own homes. When people think of franchises, they always think of food. Everyone wants to do Chick-fil-A, but it’s very difficult and expensive to do. ‘to access. “

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The upfront expenses – franchise fees and other requirements – are what is required and can be what determines the business a franchisee undertakes. With Embroli’s company, franchise fees can range from $ 40,000 to $ 60,000, and operators must have sufficient working capital to cover expenses for the first six months. Since franchise fees are often funded, the business needs $ 75,000 in liquid capital and a net worth of $ 200,000.

When Amy and Walter Paine of Baton Rouge decided to retire, the plan was to start a business. But new business owners liked the idea of ​​having a track record, so they went with a franchise. The pair purchased Monster Tree Service just before the start of the COVID-19 pandemic.

Franchise costs for Monster Tree Service require a total investment of over $ 314,500 with $ 100,000 in liquid capital required and net worth of $ 350,000. The franchise fee itself is $ 49,500 and a 7.5% royalty on income. The company has generated more than $ 700,000 in annual revenue.

“We wanted something that we could do on our own,” Amy Paine said. “I like having structure and good practices. I’m a tree lover. I loved the idea of ​​being able to take care of people’s trees even if they have to be felled.”

The business has always been busy, but doesn’t rely on hurricane or storm-related work, but rather a regular customer base with trees. The plan is to potentially expand their service territory over the years to meet customer demand. One of the things the Paines learned is that franchising follows a pattern, but ultimately it’s up to the franchisee to be successful.

“When it comes to operations and running the business, you are really on your own,” she said.

In Lafayette, Julie Cummins and her husband, Allen, are opening three PJ’s Coffee franchises. The first opened at 1801 Camellia Blvd. in June 2020, and their location on Pinhook Road near the DoubleTree Hotel is slated to open early next year. Another will open later, she said, possibly in Youngsville.

The two paid $ 30,000 in franchise fees – they’ve since grown to $ 35,000 – and have a 5% royalty and 2% weekly advertising fee at the New Orleans-based company.

The fees were lower than at other franchises, she noted, and the advice offered by the company separates her from the rest.

“I pretty much run the business,” said Cummins, who quit her job as a nurse to run the business. “I have a lot of support from YP’s business for the way the business is going. They are there every step of the way – opening up right now. We have a consultant appointed to us with whom I am in contact almost daily.

Editor-in-chief Kristen Mosbrucker contributed to this report.


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