Build Your Self Storage Franchise: Start Your Path to Success Today
Building a self-storage franchise is a dream for many people. But making it happen can be challenging. Like any budding entrepreneur, you will face numerous hurdles if you try it.
Fortunately, this post is here to help you plot a path to success. We explore whether it is the right choice for storage unit franchises, the top storage franchise options available, and the pros and cons of getting into this line of work.
The Benefits of Owning a Self-Storage Franchise
The benefits of owning a self-storage franchise are considerable. Many operators find them to be a lucrative venture without some of the downsides of the traditional property rental market.
With self-storage, you rent space for possessions, not people! Therefore, they are becoming more popular.
The main advantages of owning a self-storage franchise are as follows:
Brand Recognition
Instead of setting up storage facilities that nobody has heard of, franchising lets you piggyback on the brand image of an existing provider. You don’t have to spend months or years trying to convince clients that you offer a fantastic service.
Proven Business Model
Using a self-storage franchise also means joining an organization with a proven business model. You don’t have to reinvent the wheel, designing strategies from the ground up.
Instead, the franchisor gives you all the information, marketing materials, and instructions you need to thrive.
Reduced Startup Costs
You will have to pay something to start a self-storage franchise, but the costs are often significantly lower than building a business from scratch. Most companies provide you with facilities, marketing materials, and even staff.
Ongoing Support
You also get ongoing operational support. Franchises help with staff training and guidance to ensure you operate efficiently (and don’t wind up making basic mistakes that wreck your profitability).
Scalable Growth
Finally, self-storage franchises provide scalability, helping you make your enterprise more lucrative. Over time, you can enter new markets and take ownership of additional locations.
It is a relatively passive income. Staff do the work while owners enjoy the proceeds.
Is Starting a Franchise Right for You?
While Public Storage offers numerous benefits, you should still consider whether it is the right choice personally. Some entrepreneurs discover part-way through the franchise experience that it’s not for them.
First, you’ll want to consider whether you can afford the upfront financial investment (if there is one). Most franchisors ask for five- or six-figure sums to start operating.
Second, consider if you have the relevant skills to operate a self-storage facility. Having experience in real estate and property management can help when renting out units.
Lastly, think about the growth potential of the franchise opportunity. Can it meet your income and lifestyle requirements? While some owners are successful, competition and local market demand can get in the way of others.
How Much Does a Storage Unit Franchise Cost?
How much you pay for a storage unit franchise depends on the company you join. Depending on the franchisor, setup fees can range from $25,000 to $100,000. (Some brands want you to pay more than others because of their good reputation or advertised returns).
You will also need to pay additional costs of operating and running a franchise storage unit. Ongoing expenses usually include:
Property taxes
Insurance
Utilities
Staff wages
Mortgage payments
Royalty payments
While this might seem like a long list, the returns from opening self-storage businesses can be exceptional.
Generally, the rate of return falls roughly in line with the market rate, minus a small premium for more consistent returns. You could earn 10 percent for high-end facilities and over 7 percent for low-end ones.
The Cons of a Self-Storage Franchise
We already discussed some of the benefits of storage unit franchises. Therefore, in this section, we explore some of the cons.
Limited Control
One of the obstacles is the limited control owners have over storage unit franchises. While you enjoy management responsibility, you only have partial ownership and can’t take the business in any direction you want. Instead, you must follow the franchisor’s operating procedures, which can make you feel limited.
(With that said, you still have some control over operating your self-storage business. Many franchisors will let you set prices, wages, and staff hours.
However, you will still need to work under the company banner and use its marketing materials faithfully).
Fees And Royalties
As discussed above, you also pay various fees and royalties when operating a franchise. These are the overhead you pay for receiving a ready-made business with everything you need to start making money.
Unfortunately, these fees also eat into your returns. Franchisors might take a 2% cut, leaving you with the remaining 6% of revenues as profit.
However, you might decide that this overhead is worth it. After all, property management companies do something similar in the rental market.
Competition
Finally, you might not make as much money as you hope because of fierce local competition. Self-storage is becoming more popular, and various businesses are setting up depots wherever they think they can make money.
As such, you might face severe price competition or get outcompeted by a facility in a better location. As such, always do research first to find out how much competition you’ll face if you decide to set up operations.
Find out whether other companies in the area are making money (and preferably how much).
The Growing Market for Storage Facility Franchises
According to data, the global self-storage market was worth $58 billion in 2022 and will expand by an astonishing 7.5% annually until 2030.
As such, getting into the business now represents a fantastic opportunity for anyone willing to take the initiative.
Several demographic and economic factors are driving this growth. For example, urbanization and shrinking living spaces in some towns and cities are encouraging people to store infrequently used possessions off-site.
Apartment dwellers want to declutter and use their existing space more productively.
Changing lifestyles are also driving the boom. The desire for large recreational items, such as kayaks and mountain bikes is boosting demand.
The e-commerce industry is playing a role, too. Micro-enterprises are looking for flexible storage solutions they can use at any time for inventory and fulfillment.
Startups want to avoid investing in expensive warehouses and getting locked into contracts.
Why Invest in a Portable Storage Franchise?
Portable storage units are an emerging trend in the self-storage industry. Instead of getting customers to transport their possessions to units across town, storage companies are now experimenting with distributing units to front doors.