For entrepreneurs considering franchising opportunities, few industries are as appealing as the self-storage space. In recent years, this field has enjoyed intense and consistent growth across North America: By 2025, experts project the global self-storage market will reach over $115 billion.
Better yet, self-storage facilities require significantly less upkeep and ongoing investment than other kinds of franchise businesses. While startup costs can be significant, a storage location typically generates fewer operating expenses than other franchise ventures involving real estate, such as restaurants.
For potential franchise business owners, this mix of strong demand and limited overhead makes the self-storage industry highly attractive. But with so many storage companies offering franchising opportunities, choosing the best storage franchise to buy can be a complex business decision.
In this article, we'll describe the nature of storage franchising opportunities in more detail, comparing companies' specific storage offerings and franchising business models. We'll also provide actionable recommendations for choosing a storage franchise, outlining key criteria to consider.
Types of Storage Franchise Opportunities
While storage services have long been popular with the American public, demand for extra space has surged in recent years.
Several factors account for this trend, including rising home prices. When every square foot costs a fortune, many buyers can't afford homes with adequate storage for all their stuff. Given Americans' propensity for clutter, self-storage properties provide a handy solution: Customers don't need to part with precious items, and monthly fees seem relatively reasonable.
Within the storage industry, however, there are significant variations in the services companies provide. As a potential franchise owner, it's important to consider the following variations on storage franchise models and determine which would appeal most to customers near your intended location.
Self-Storage Facility Franchises
For customers in search of long-term storage options, large self-storage facilities are often the best solution. These locations are often quite large, offering dozens or hundreds of storage units of various sizes. Typically, customers are able to access their units during specified business hours, though some facilities do allow 24/7 access.
Self-storage facilities are hardly homogeneous, however. Some "outdoor" self-storage properties feature rows of units with garage-like doors, allowing customers to drive up to their units directly.
Others occupy massive warehouses, complete with climate control and elevator access to upper levels. Some companies franchise both kinds of facilities: A Storage Authority franchise, for example, can be either type.
The best structure for your self-storage franchise will likely depend on your location: While multi-level warehouses are more typical in urban or suburban areas, outdoor storage facilities flourish in rural areas.
Weather conditions may also inform your choice: An outdoor facility in Florida, for example, may be more appealing to customers than one in a state that gets a lot of snow. In this regard, startup costs are important to consider, as buying or constructing a large building can be prohibitively expensive for some would-be franchisees.
Portable or Mobile Storage Franchises
Storage needs often result from a move or renovation: Customers may be downsizing or need a place to stash their stuff while completing work on a new home. Accordingly, many companies combine moving and storage services, offering portable storage solutions to facilitate these transitions.
For example, PODS, a major player in portable storage, provides an array of related moving and storage services. Customers can rent PODS storage containers to keep in their own driveways or to store their stuff at one of the company's storage centers.
Once customers are ready to move, they'll even transport the storage container to its new destination. Zippy Shell and UNITS Moving are other popular companies offering a similar set of services.
For franchisees, the prospect of running a mobile storage business presents both opportunity and complexity. Moving businesses require additional staffing, insurance, and logistical support compared to a storage-only facility.
In fact, many customers of brands like Zippy Shell strictly purchase moving services, with no associated storage agreement. Though that can be a great source of one-time revenue, you can't count on monthly payments from these customers.
"Full-Service" Storage Franchises
Because storage and moving can be stressful, some companies aim to provide a "full-service" experience: They'll come to pick up items, store them, and transport them as needed. Customers don't need to worry about getting a truck, picking a unit, or hauling heavy items themselves. Some of these companies even offer home services, such as packing on customers' behalf.
Potential franchisees should note that these full-service storage companies are highly appealing to commercial clients. If a software company is renovating its office, for example, it can't expect its professional staff to spend their days packing up the workplace.
Of course, added offerings create added complexity: To deliver a truly "full-service" experience, you'll need hiring and logistics capabilities beyond what a storage business would require.
What to Consider When Choosing a Storage Franchise
Once you determine which type of storage business to franchise, you'll likely have many potential companies with which to possibly partner. While evaluating franchisors may seem daunting, you can reach a sound decision by considering several key points of comparison.
Franchise Fees and Startup Expenses
Virtually all storage companies require franchisees to pay an ongoing royalty fee, which is calculated as a percentage of top line revenues. Additionally, many storage franchisors require an initial "franchise fee" to launch a new business, which can amount to tens of thousands of dollars. On top of these costs, franchisees are sometimes obligated to pay an "advertising royalty fee," a contribution to the brand's advertising efforts.
These costs usually exclude initial startup expenses, such as the investment required to build the facility or purchase real estate. While storage companies can support franchise development in many ways (such as helping with access to financing), new franchise owners can expect to make a sizable initial investment.
Thankfully, you don't need to have a massive net worth to get started. Many franchisees use business loans to build their storage businesses, and being a franchisee of a larger corporation can help instill confidence in prospective lenders.
Technical and Logistical Support
To run a self-storage business successfully, you'll need sophisticated software tools to track occupancy rates, rental agreements, and other essential variables. When comparing storage companies, ask for a detailed demonstration of the platforms they provide to franchise owners. If possible, try to take these tools for a spin yourself.
Moreover, inquire about any improvements or additional features the company plans to introduce in the coming months. Doing so will allow you to gauge whether a company is proactive in updating its core tech, or likely to fall behind the times.
Access to Guidance
Being a franchisee can alleviate the isolation that many small business owners experience: By providing training and mentorship opportunities, storage companies can support their franchise owner's success. While many storage companies promise this kind of guidance, some go the extra mile to see franchisees succeed. Before choosing a particular company, get a clear sense of the commitment they're making to you.
Franchise Compliance and Operational Flexibility
While some franchisors take a hands-off approach, most have firm standards and regulations with which their franchisees must comply. Accordingly, do your research to understand which kind of operational leeway you'll enjoy as a partner.
For example, will your arrangement permit you to hire a third-party management company? Can you get creative with your own local marketing efforts? These answers will shape your experience as a franchise owner.
Choose Skynova to Support Your Self-Storage Venture
For potential franchisees, the self-storage industry offers appealing opportunities for profit with modest operational expenses. But as with any business, rigorous accounting and billing is a critical aspect of making your storage venture successful and solvent. Without the right tools, managing payments, expenses, and assets could become a perpetual headache — for you, your franchisor, and your customers.
At Skynova, we build intuitive and powerful software to help entrepreneurs easily manage these aspects of their business. Our solutions, including accounting and invoicing software, are perfect for storage facilities owners.
From creating quotes for potential customers to managing recurring invoices, our platforms simplify the nuts and bolts of running a storage business. When you're confident that these aspects are being handled correctly, you can focus on attracting and retaining customers — and watch a steady stream of income roll in.
Notice to the Reader
The content of this article is intended as informational and may not apply directly to your own circumstances as a potential franchise investor. This article should not be construed as an endorsement of any particular business plan. Before pursuing any business opportunity, always consult appropriate professionals, including a certified accountant, who can ensure your compliance with local, state, and national accounting standards.