The Self-Storage industry has been the fastest-growing sector of the United States commercial real estate industry over the last 30 years, and it continues to grow at a steady pace. The total market capitalization value of the entire U.S. self-storage industry is well in excess of $220 billion. And Nearly one in 10 U.S. households are actively renting one or more self-storage units. Combine that with the fact that the industry is virtually recession proof and utterly inflation proof makes it a very attractive investment opportunity for many entrepreneurs and small business owners. One would naturally assume, then, that opening a self storage franchise is a logical way to break into the industry. However, there is just one problem. Virtually no self storage companies offer franchise opportunities.
A quick look at the industry reveals why. Several years ago, two self storage companies offered the ability for investors to invest in franchising their concept. However, very few investors saw the value and realized that unlike the restaurant, retail, and other franchise-heavy industries, the benefits that come from franchising do not really apply to Self Storage. To understand why, consider the benefits of a franchise: The owner of a business concept grants the franchisee the right to own and operate a business based on the franchiser’s business concept, using its trademark. The franchisee pays a franchise fee and in return expects, among many things, to receive a significant benefit from the branding and marketing that the franchisor supplies.
However, this does not happen with Self Storage because the self storage industry is so highly fragmented. There is arguably no nationally dominant company or brand name. Even the industry’s largest company, Public Storage, currently represents only 4.5 percent of the entire industry. And the five largest operators in the industry only comprise approximately 11% of the total industry.
And if you look at the Nuts and Bolts of running a Self Storage facility, it doesn’t involve any trade secrets, super secret formulas, or anything that is difficult to replicate. Customers rarely show signs of brand loyalty because to them, storage is really a commodity. The purchase decision is usually based upon proximity to the customer, convenience, and price. Very Few Benefits can be derived from choosing one Storage provider over another.
Furthermore, The self storage business is fairly straight forward. Hiring and training the right managers, along with providing a clean, safe, and secure facility with proper curb appeal is half the battle. Combine that with a strong knowledge of the market and your competition and a killer marketing plan will all but ensure your success. Most Savvy Business owners and investors can find resources to assist in each of these areas, paying only once for this information, without ongoing payments to a franchisor.
To be fair, an investor could benefit from a pre-packaged Business System Based on the expertise and guidance of an experienced team of storage professionals with previous experience in areas such as:
Avoiding Mistakes in these areas may be worth the price and or perceived risk of going it alone if you feel as if you are lacking the skills necessary to launch. It is important that a potential investor clearly understands how to evaluate a market area, how to find and purchase and/or develop a facility from the ground up and how to forecast accurate operational results.
Fortunately, we at www.selfstorageinvesting.com cater to the needs of all investors, entrepreneurs, and current professionals in the Self Storage Industry – no matter what stage of the investment circle you find yourself in. From Development, to Acquisitions, conversions, Marketing, and everything in between. Quite Simply, we are the nation’s leading authority when it comes to the Self Storage Industry. There’s nowhere else on the planet you can find more information and assistance to succeed in the Self Storage Business – Bar None!
The concept of franchising never took hold in the Self Storage industry. The large, self storage companies cannot offer much in the way of franchise benefits and what they can offer is easily replicated by much more affordable alternatives such as the resources found within the site.