7 franchises: Riding the housing boom
Many franchises have arisen that cater to the soaring home market.
NEW YORK (CNNMoney.com) - Anyone looking to start a business must pay strict attention to cultural, demographic and technical trends. You don't want to go into a dying business -- you want to stay on top of the wave.
One of the strongest and broadest of trends, of course, is home ownership and remodeling. The Joint Center for Housing Studies at Harvard reports that homeowners spent $149 billion in 2005 on renovations.
"People are investing in their houses," says Steve Hockett of FranChoice, a business referral consultant. "And higher house prices have enabled them to do it."
To meet the growing demand for all things home-related, numerous enterprises have sprung up. Many are franchised. (See gallery of 7 such franchises.)
But who has time to do all the work required to maintain America's growing homes? Americans are working longer hours, spending more time commuting and are more likely to have both spouses employed -- not to mention taking the kids to soccer practice, cheerleading rehearsal and play dates.
And when they look for help, it's natural that they should turn increasingly to franchise businesses. "Customers are more comfortable with a name they know," says Hockett. The clout of multiple locations and ample advertising and promotional money heightens brand awareness for franchise owners.
Industry sources cite several other factors that have added to the boom in franchise businesses targeting homeowners.
"After 9/11, the home improvement industry soared," says Tom Wood, president of Floor Coverings International, a franchise operation. "People started to focus inward more and as home prices climbed, they poured money from home improvement loans into remodeling."
It's also natural that high home prices would prod homeowners into plowing some of their equity back into home repair or improvement as a way of protecting or enhancing their investments.
And don't discount all the media attention that all aspects of home design and improvement have been drawing. TV shows, such as "Extreme Makeover: Home Edition" and "Trading Spaces" has helped focus the nation's attention on the home and created an atmosphere of lust for lush lifestyles.
"Home shows have been a great boon to housing remodelers," says Jason Baldner, president of Kitchen Solvers, a franchise kitchen and bath remodeling company.