If you think of franchising, you probably conjure up household names in the food sector or recall popular fitness brands. What you may not consider is flooring.
Yet the opportunities that exist in this under-appreciated market are substantial.
A just-released report from IBISWorld reveals this is a $3.6 billion industry, with profit margins forecast to reach 2.1 per cent this year.
Other reports citing different growth statistics do all agree that the market is set to grow at least 5 per cent by 2027.
Keen individuals buying into this sector can follow this exciting growth trajectory and tap into the myriad benefits of an established retail brand.
If you are looking for a retail opportunity, the possibilities stretch from food to eyewear, from convenience stores to flooring. So what is it about the carpet and window furnishings business that wins the attention of committed and ambitious franchise owners?
Food vs flooring
Why would you choose to invest in a flooring franchise rather than a food franchise?
Lifestyle benefits
First of all there are obvious lifestyle benefits.
While the dynamic and lively environment of a food franchise has an obvious appeal, it is not the best choice for everyone. The hospitality business is time and labour intensive.
In contrast, flooring franchisees observe a standard retail working week without the extended hours so often demanded of a food franchisee.
At Solomons Flooring franchisees work six days with reduced weekend hours, opening for a limited period on Saturdays.
They can also operate with a smaller team of employees, which brings cost and time efficiencies, and avoids the challenges of managing young casual staff. In the early days of the business a two-person team can confidently staff the store.
David and Roslyn Feurer own Solomons Flooring in Toowoomba.
“We have been with the Solomons family since 2017 and love it. It was a great decision to buy our store, we only wish we had done it sooner! The marketing and support has been fantastic and it has given us a great work/life balance,” the couple says.
Jack McClane heads up franchising at the 130-year-old Solomons Flooring, and after spending the majority of his career in the food industry he sees how franchisees flourish in the business.
“There are so many benefits to being a Solomons franchisee, it delivers a great lifestyle,” he says.
Financial benefits
He points out it is a robust business model which delivers a steady revenue stream without the costs and challenges associated with fast food.
The financial benefits start early. New business owners can open a Solomons store with a minimal investment of $125,000 (excluding working capital and leasing costs). This frees up franchisees’ capital for other business essentials such as working capital, signage, and local promotions.
A Solomons franchisee avoids the seasonal fluctuations, and the cost and management of consumables, linked to a food business.
There is the ability to add extra revenue streams with additions such as window furnishings boosting sales in-store.
Franchisees’ money is not tied up in stock because flooring is cut to order and despatched from a central warehouse. And in many cases Solomons franchisees are paid in full by the customer before the invoice terms are due, making these businesses cashflow positive.
While the hospitality sector operates with low profit margins, the flooring industry profit margins can be significant, rising as high as 40 per cent.
It is also a considerably less competitive arena than food, with a much higher average transaction value. Fewer competitors and higher prices make this an appealing investment option.
Steady demand at Solomons Flooring
Jack points out that flooring is an essential purchase, for both domestic and commercial premises, so the demand remains steady.
“Two years ago our business rocketed, with households investing in home renovations,” he says.
“Since then we have had interest rate rises and building uncertainty but most of our franchisees’ clients are mums and dads, and they are not susceptible to the issues in the building industry.”
In the last three years the chain’s footprint has increased – even during the pandemic Solomons opened an impressive 13 outlets.
This heritage business has thrived through challenging times and is ready now to ramp up its expansion plans. Solomons has ambitious plans to reach 100 stores in the next few years.
“Our goal is to partner with every day Aussies looking to open their own business and we will add up to 10 new stores every year,” says Jack.
Getting the right people onboard as franchisees is crucial to the success of the brand.
The business appeals not just to the savvy franchise buyers who can see the growth potential but to individuals and families seeking a robust investment which delivers a better lifestyle option.
Solomons franchisees also share a passion for finding solutions so customers can fulfil their dreams.
“A customer has a plan in their head, and you help them transform it into reality. This is a big investment for them, and it’s a joy,” says Jack.
“Franchisees get a tremendous sense of satisfaction bringing these dreams to life.”