Investing in a Self Storage Franchise

Self storage represents a fantastic investment opportunity, and 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.

A few years ago, two self storage companies offered the ability for investors to invest in franchises. However, very few investors acted upon these opportunities. The investors realized that unlike the restaurant industry, the benefits that come from franchising do not apply very well 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 franchiser offers.

However, this does not happen with self storage because the self storage industry is highly fragmented. There is arguably no nationally dominant company or brand name. The closest company that can qualify is the industry’s largest operator, Public Storage, who currently represents only five percent of the entire industry. The five largest operators in the industry combined only represent approximately 10% of the total industry.

When you think about the self storage concept, it does not involve any trade secrets, special ingredients, or anything that is difficult to reproduce. Customers rarely show signs of brand loyalty because to them storage is really just use of private space.

The self storage business is straight forward. Once the facility opens for business, simply having the right people working with the customers and having the spaces priced effectively will maximize the facility’s performance. This simply does not require the assistance of others to accomplish.

To be fair, an investor could benefit from the presence of a franchiser in the areas of market and site selection, facility design, and feasibility or financial forecasting. Mistakes made in these areas may not be reversible. It is important that a potential investor clearly understands how to evaluate a market area, how to find and purchase a site, how to design a facility, and how to forecast accurate financial results.

Fortunately, an alternative exists to guide the investor through these areas. A new product called QuickStart Self Storage now exists to help those that want to get started in self storage. QuickStart Self Storage offers a wealth of information about self storage so that the new investor can clearly understand the business before they commit; making sure that self storage is a good fit for them. Additionally, it includes a feasibility calculator similar to those used by the industry’s largest companies.

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 QuickStart Self Storage. If you are looking to open a self storage franchise, you should instead consider developing your own independent facility.