No rent, no stock, no explosive costs… Franchise concepts without premises are financially more accessible. But, on the other hand, they require a flawless sales strategy.
Increasingly numerous and increasingly popular! Premise-free franchises have been on the rise for several years now, and are experiencing a resurgence of interest in the wake of the economic crisis. “Take the example of the real estate sector, which has undergone a complete transformation: there are fewer and fewer street-level agencies. Networks are developing concepts with independent agents who no longer need to have a physical store,” notes Laurent Delafontaine of Axe Réseaux.
All activities without premises that can be carried out directly on the customer’s premises or at home are suitable for a franchise model. “Commercially, the rise of telecommuting is boosting the phenomenon, as people are more at home, and more willing to have technicians come to their homes to troubleshoot their broken computers or repair their blinds, for example,” continues Laurent Delafontaine.
Premise-free” works in many franchise businesses
Franchise networks offering premises-free concepts operate in a variety of sectors, including :
- personal services (O2 care services, Helping…)
- real estate ( Maxihome, Optimhome, Propriétés Privées, Safti…)
- brokerage (Activ Travaux, Immofinances.net, Idesia, etc.)
- coaching (Action coah, Evoludis…)
- home repair and maintenance (Repar’stores, La Compagnie des déboucheurs, etc.)
- car washing and maintenance (EcoWash, Ecolave, Autosmart, Cosmeticar, Hydroparts, etc.)
- installation of home kitchens (Oméga, Raison Home…)…
Opening a home-based franchise with limited capital
No premises necessarily means savings. No rent, no doorstep to pay, no fixtures or inventory to finance. Fixed costs (telephone/internet subscription, electricity, gas, etc.) are also limited. As for staff costs, there are none, as franchisees work solo.
Results: lower initial investments and accelerated profitability thanks to minimized overheads. “These advantages are not insignificant, as banks are currently less willing to finance start-up projects. Concepts without premises are easier to finance because they require less capital,” adds Laurent Delafontaine.
Profitability at stake
At Repar’Stores, which specializes in roller shutter repair and maintenance, franchisees use specially-equipped trucks to come straight to customers’ homes. The total investment does not exceed 45,000 euros.
“All franchisees are equipped with a service vehicle. It’s a mobile franchise concept, quick to launch, with limited fixed costs, and very quickly profitable. In year 1, sales reach 100,000 euros, in year 2, 145,000 euros, and in year 3, 160,000 euros. This means that from the very first year, franchisees can earn a net salary of 1,200 euros in year 1, then 2,500 euros in year 2 and 3,500 euros in year 3,” explains Guillaume Varobieff, co-founder and managing director of the company.
The same facilities are available at Cuisines Venidom, a kitchen, bathroom and dressing room concept, where franchisees visit customers in their own store truck. The investment is around 100,000 euros (17,500 euros personal contribution) for average sales of 200,000 euros at cruising speed.
A solid sales strategy
But be careful. While franchising without premises is financially advantageous, it is nonetheless subject to a number of constraints. Acting alone, with no physical outlet, the franchisee can’t rely on the advantages of his or her location to attract new customers. “This requires an advanced sales strategy,” says Laurent Delafontaine.
What is the catchment area, who are the potential customers in the area, how to attract them…. ? Prospecting is a decisive factor in the success of a franchise without premises: local advertising, word of mouth, a network of prescribers… All actions that help to make the business known are essential. It is therefore preferable to choose a mature brand capable of supporting franchisees in their sales and marketing strategy.
“For a credit brokerage business, it can be interesting to check the number of banking agreements signed by the network and the turnover rate. If the latter is too high, there’s probably a problem,” adds Laurent Delafontaine.
Finally, a detail that is nonetheless important: the franchisee’s ability to work alone from home, without collective emulation. This requires a high level of motivation and rigor to combat feelings of isolation. Those who will have to work from home must also ensure that they can do so in good conditions (separate room or office, hours adapted to family life…).
