@Shital Thakkar - If I understand you correctly, the big box self storage companies you're referring to are the publicly traded REITs like Extra Space Storage, Public Storage, CubeSmart, and Uncle Bob's/Sovran/Life Storage. These companies do not franchise. Their model is typically to either own or manage the properties.
I've never heard of franchising in self storage, and probably the reason why is because branding is considered very ineffective for self storage. In other words, nobody drives 20 miles to rent at Extra Space Storage - they go to the local storage facility a half mile down the road.
It sounds like you're looking to be a hands-off owner of a storage facility in order to benefit from the returns without spending 20 years learning the business - is that an accurate assessment?
@Shital Thakkar - If I understand you correctly, the big box self storage companies you're referring to are the publicly traded REITs like Extra Space Storage, Public Storage, CubeSmart, and Uncle Bob's/Sovran/Life Storage. These companies do not franchise. Their model is typically to either own or manage the properties.
I've never heard of franchising in self storage, and probably the reason why is because branding is considered very ineffective for self storage. In other words, nobody drives 20 miles to rent at Extra Space Storage - they go to the local storage facility a half mile down the road.
It sounds like you're looking to be a hands-off owner of a storage facility in order to benefit from the returns without spending 20 years learning the business - is that an accurate assessment?
Be verrrry careful if you're investing in the DFW metroplex. It's been called a no-fly zone with all the self storage development coming online there. Sounds great but most investors in all areas seem to love buying at the height of the market. Also LOTS of sophisticated self storage investors in your space there.
Ditto to both comments above. THere is a company offering franchising, but at the end of the day, to pay a company a chunk of money upfront, and royalties on the back end works well for Subway, Cleaning companies, Paint stores.. etc. - for the buying power, branding, marketing, & Operations.
However, with Self-Storage, you are trying to dominate a 5 mile trade area - not a whole market.
Just my $.02, for the prices I have seen, I can't seem to find the ROI.
Educate yourself by visiting the ISS SHows, The SSA Shows, The Self Storage Academy, and hire good consultants in the industry to perform feasibility studies and build your team.
That said, if you want to be TOTALLY Hands off, a franchise like the Storage Authority may be a good option.
I believe the better way to succeed even In a business that semi runs itself, is to enjoy knowing and understanding as much detail about the business as possible. To say “I don’t want to know the details – I just want it to work" is not for me. It would eat me alive because I have to micro manage every aspect of my business such as my RE investment company.
Although, people do reach business success with both approaches. I invest in passion and motivation not in dollar signs and lack of a better word neglect. I couldn't get buy into a franchise that basically dictates how you run your money invested and business or in many cases the people you hire to run the business. Money is motivation but with all due respect the lazy sit back and hire people to run my hard earned money/business approach isn't one I would follow.