The Top 5 Franchise Opportunities for NYC Entrepreneurs
If you’ve ever worked for yourself in New York, you already know the amount of time, the level of dedication, and degree of energy that’s required to get your business off the ground. Keeping that company running in the race is even more challenging. If you haven’t owned your own business, but have always dreamt of doing so, it’s important to understand that you’ll call upon a vast network of personal and professional resources. Whether you’re a serial entrepreneur or breaking out on your own for the first time, you might be pondering what business to go into and whether owning a franchise instead of starting something from scratch is the answer.
The Best Franchise Opportunities in New York
There are certainly benefits to owning the right franchise—brand recognition, training, a well-established operating model—and several companies make a compelling case for choosing what they have to offer. But not all franchises are created equal, nor do they always make the best use of your time and money. So let’s take a look at the top five franchise opportunities for entrepreneurial New Yorkers.
Liberty Tax Service
Nothing is certain except death or taxes, as they say. That’s what makes a tax preparation franchise like Liberty Tax Service so appealing at first blush. Started by John Hewitt in 1998 as an acquired conglomeration of five U.S. and Canadian offices, the company now has 4,000 franchise locations—with 200 located in New York—and looking to grow even more.
The company grants franchise licenses for $40,000 a pop but the overall startup costs will range between $60,000 to $70,000. For that amount, you’ll get some initial and ongoing training, operational and technology support, and the ability to leverage their national brand for five years. Liberty Tax will also help you select an appropriate office location to maximize visibility and customer accessibility. For marketing, however, you can expect to pay an additional 5% of your revenue toward their national advertising—in addition to 14% of your gross receipts for royalty fees.
But before you sign on the dotted line, you should be aware that the industry is changing rapidly. With more do-it-yourself tax software available, including those available through the IRS Free File program, doing your taxes doesn’t seem as daunting for the Average Joe. That’s why many tax preparation professionals are trying to expand their customer base by offering insurance or financial products in addition to tax services. You’ll need to ask yourself, just how many businesses do you want to run? It could get complicated in fairly short order.
PROS: Name brand recognition, relatively low operating costs, top franchise ratings from third parties.
CONS: High royalties and fees, seasonal customer base, limited territory.
Real Property Management
With all the tenant laws and procedures in New York, landlords often turn to a property management company to keep their rentals in line. Real Property Management has been offering franchise opportunities since 2004 and has grown significantly. They currently have 267 franchisees nationwide, with a handful located in New York.
To open your doors as a Real Property Management franchisee, you’ll currently need at least $90,000 in liquid capital, including the initial $45,000 franchise fee, but your start-up costs could go as high as around $114,000. Then, you’ll have an ongoing royalty fee of 7% and an ad fee of 2%. Remember, those amounts do not include your living expenses while you get the business off the ground, which could take some time. While you won’t have to wait to build out a retail space, the 8-week training period and significant learning curve for processes and procedures in this industry could spell a long time to profit.
And, despite what the company may tell you, the potential for profits in this industry may be on the downturn. Unlike back in 2008 to 2010 when everyone was holding onto their investment properties for dear life, many of today’s landlords are selling. When a landlord sells their property, the property management company loses a client. Expect this franchise opportunity to be a high-cost hustle to stay afloat.
PROS: Rental market strong, no retail space needed, intensive training program
CONS: High startup costs, expensive royalty and ad fees, slow profit growth in a stagnating industry
The Loan Consultants
Nearly everyone needs money at some point in time. The Loan Consultants, a consumer finance and loan brokerage company, has been filling this need for its customers for over 30 years. With over 1,200 franchise offices throughout North America and the United Kingdom, the company’s claim of being one of the oldest and largest loan broker programs may not be far from the truth.
Establishing your career as a finance consultant and real estate loan broker can start with a fairly modest investment of $14,000, though the company recommends you have a sum of $20,000 in liquid capital for best results. You won’t have to pay franchise fees or royalties, nor do you need prior experience in the financial services industry. You’ll get everything you need to be a financing specialist after three days of training, along with support Monday through Friday as other questions arise. You’ll also get a custom website, access to a network of over 100 lenders, and marketing materials to help you grow your business. Sounds too good to be true, right? Unfortunately, it probably is.
First, the low startup fees don’t take into account the overall costs needed to start and run a profitable business. You’ll still need to find a retail space and a qualified support staff to help you service your customers while continuing to pay the bills at home—an expensive proposition in New York. Secondly, you’ll need to find customers. Though everyone, everywhere needs money, consumers are very cautious when taking out a loan. They’re also armed with more options and tend to perform lots of research, so competition is fierce. Third, though the company says otherwise, the loan services industry is not a recession-proof business. Even a slight economic downturn will dry up your customer base, the number of lenders who are willing to give loans, and ultimately, your profits.
PROS: Low initial investment, no franchise or royalty fees, fast-track training and ongoing support
CONS: Brick-and-mortar operation, competitive industry, economically unstable
Here in the United States, we love our cars. At a steadily growing rate, we also love the garages where we park—or don’t park—them. Garage Experts, founded in 2009 in Seattle, provides garage flooring and storage options, as well as franchise opportunities, in most states, including New York. At 52, the number of franchises is small relative to many others; however, that number is expected to increase as the garage-makeover industry continues to grow.
A franchise with Garage Experts will run you between $48,000 and $86,000 to start, at a minimum. There is no franchise fee to join, but you will pay several hundred dollars a month to access their business tools. You’ll also need liquid capital of $30,000 and a net worth of $50,000 to be considered. At the end of your five-day training in Anaheim, California, you’ll know how to track leads and lead costs, use CAD software, and install garage floors and cabinets. You won’t necessarily have the leads, or the manpower, to help with installation when you get them, but you’ll be on your way.
Exactly where you’ll be going, however, remains to be seen. For all of your initial and ongoing costs, you’ll still need to purchase materials from the manufacturer and you must find a warehouse to store it. You’ll also need to hire installers and a salesforce, in addition to paying for advertising and lead sourcing. You may also need to subcontract any construction work you encounter.
Additionally, here in New York, renovating a garage is not as easy as pouring down epoxy and putting up cabinets. In many areas, historical overlay zones must be considered, as well as strict permitting procedures, both of which can vary by neighborhood. And even though the company gives a 10-month royalty “holiday” if you don’t see over $750K in gross sales in your first three years, that’s little compensation—or consolation—for a business gone bust.
PROS: Growing industry, no franchise fee to join, good ratings from third parties
CONS: Potentially high operating costs, additional skills required or helpful, limited customer base
Buying, renovating, and selling houses for profit is the new black. It seems like everybody’s doing it these days. But HomeVestors founder, Ken D’Angelo, began franchising in 1996. Since that time, HomeVestors has grown to include over 1,000 independently owned and operated franchises in 44 states plus the District of Columbia.
New real estate investors have two franchise options: the Full Franchise for the investor who wants to grow his portfolio into a full-time business and the Associate Franchise for the part-timer, priced at $55K and $27K respectively. Both options grant you territorial marketing rights, access to the nationally known “We Buy Ugly Houses®” brand, week-long comprehensive training, and leads on distressed homeowners willing to sell. You’ll also get your own Development Agent—an experienced real estate investor who is at the ready to mentor you through any and every phase of the deal.
And since HomeVestors real estate investors have the freedom to work where and when they choose within their defined territory, and with the support and tools they need to help them build a thriving investment business, hardworking entrepreneurs hold their success in their own hands. That’s a heck of a lot of “pros” in my book. So while many companies may offer franchise opportunities, HomeVestors helps its franchisees do it better than anyone else.
A Look at the HomeVestors Opportunity
In comparing the pros and cons of the franchise opportunities available to New Yorkers, the choice is clear: becoming an independently owned and operated HomeVestors® franchisee can be a great choice for many entrepreneurs.
Whether you’re an experienced real estate investor looking for a way to expand your portfolio or a budding entrepreneur looking for a way to leave the corporate life behind, HomeVestors can give you lots of bang for your buck. The real question, then, is are you ready to take the next step toward your new career? If so, contact HomeVestors today.
|Real Property Management||Liberty Tax||Garage Experts||The Loan Consultants||HomeVestors|
|Initial Training||8 Weeks||4-6 Weeks||5 Days||3 Days||1 Week|
|Office/ Retail Space Required||Yes||Yes||Yes||Yes||No|
|Add’l Licensing Required||Yes||Yes||Yes||Yes||No|
|Market Soundness||Trending downward||In flux||Slowly on the move||Unstable||Going strong|