Industry Insight

2020 Franchise Industry Snapshot: Commercial Technology and Security Franchises

Too Long; Didn’t Read

  • Average initial investment: $103,605 - $190,200
  • Average Franchise fee: $49,862
  • Average Royalty: 5.75%
The Oakscale franchise development team put together a summary of the top security franchises for 2020.

When it comes to essential businesses, look no further than Technology and Security franchises. We all got a stiff reminder of the importance of technology when the 2020 pandemic hit. For most of us that simply means video conference and collaboration tools, but for companies protecting their assets, both digital and physical at the office, tech and security go hand in hand. 

The franchises that specialize in IT services and security are few, but we wanted to highlight the 4 brands that made their way into Entrepreneur’s Franchise 500 list. And, as one of the few franchises that were not shut down for any period of time throughout 2020, they’re likely to be attractive investments for those looking for more secure franchises moving forward. 

2020 Top Commercial Technology and Security Franchises : Initial Investment


The investment ranges for these franchises are all in roughly the same ballpark. The two franchises focused more on security, Signal88 and Security 101, both have a high end investment of more than $200,000 while the more tech focused franchises, CMIT and TeamLogic IT require an investment in the low to mid $100,000’s. 

To better understand investment levels, you’ll want to read our Franchise Basics Guide to franchise costs

Average Investment Range

$103,605 - $190,200

Highest Investment Range

$119,750 - $223,500

Lowest Investment Range

$61,950 - $218,650

2020 Top Commercial Technology and Security Franchises: Franchise Fee


Franchise Fees for Tech and Security franchises range between $45,000 and $150,000. The high end fee is inflated by Signal 88, which has a franchise fee ranging from $55,000 to $150,000. Typically when franchises have a range of fees, it is because they offer different types of models (i.e. a food truck or a restaurant for the same brand likely have different fees) or they offer different sized territories. A small town franchise would be on the low end while a major metropolitan area would require a much larger franchise fee. Another standout statistic here is that Signal 88’s franchise fee makes up 68 to 88% of the total investment, which is a fairly high ratio in comparison to most other franchises. 

To better understand these fees, you’ll want to read our Franchise Basics article that covers franchise fees, but in short, you’ll want to make sure you’re getting value out of your franchise fee. Just because a fee is significantly less expensive than another does not necessarily make it a better investment. 

Average Franchise Fee

$49,862

Median Franchise Fee

$49,725

Highest Franchise Fee

$150,000

Lowest Franchise Fee 

$45,000

The average and median franchise fees are based on the low end of the franchise fee range for each franchise. 

2020 Top Commercial Technology and Security Franchises: Royalties


Average Royalty (%)

5.75%

Highest Royalty (%)

7%

Lowest Royalty (%)

4%

The royalty range for Tech and Security franchises spans anywhere from 4% to 7%. It may seem like the difference between 4% and 7% is not much, but if you have a million dollar business, that’s a difference of $30,000 which is real money. If all things were equal for two different franchises in terms of potential earning power, you’d obviously choose the lower royalty. But once you conduct due diligence, you’re likely to find yourself more excited about the earning potential and likelihood of success of one or the other, and if that just happens to be the brand with the higher royalty rate, it’s probably best to go that direction. After all, you can pay a lower rate for a sushi roll at the gas station than at Nobu. They’re both sushi, but are they? 

Read up on royalties in our Franchise Basics article.

2020 Top Commercial Technology and Security Franchises: Franchise Units


Average # of U.S. Franchises

218

Median # of U.S. Franchises

204

Largest U.S. Franchise System*

420 Franchises

Smallest U.S. Franchise System**

45 Franchises

Whoa! The franchise with the highest franchise fee, which makes up the majority of your initial investment, is also the largest franchise system with more than 400 franchises… Signal 88. As we’ve been trying to communicate in these franchise snapshots, sometimes the opportunities with the highest fees, which may seem outrageous, are actually the best opportunities. Now, just because more than 400 people have invested in a franchise, does not automatically mean it’s a great opportunity, but it can definitely be a very good indicator. Signal 88 is also the youngest system having launched franchising just recently in 2008. Security 101 has just 45 franchises and started 1 year earlier in 2007. 

The size of a system can be a confidence booster for prospective franchisees because they know that many others have already bought in. But don’t sleep on a franchise just because it hasn’t boomed. There are some serious advantages to getting in early to a franchise that hasn’t experienced massive growth just yet. We detail those advantages here and here

2020 Top Commercial Technology and Security Franchises: Training Hours


Average Training Hours Provided

143 hours

Median Training Hours Provided

99 hours

Most Training Hours Provided*

320 hours

Least Training Hours Provided**

52 hours

Training hours can be quantified but not qualified. After all, I think we’d all rather have one day of intense, valuable training than a full week of mediocre training. Since we haven’t been to each of (or any of) these franchises’ trainings for new franchisees, the only analysis we can really provide is that Security 101 offers significantly more training time than the other franchises. Signal 88, even with the highest fees and largest franchise system, offers significantly less training than the other franchises in this category.

So, that’s a quick snapshot of the Tech and Security franchise category. As always, you’ll want to better understand why the franchise fees and royalties are what they are. Lower fees and royalties do not necessarily equal better opportunities. 

To fully understand each franchise opportunity, you’ll want to follow our guidelines for researching franchises. Good luck!

The 4 Franchises Included in this Analysis: Signal 88, Secruity 101, TeamLogic IT, CMIT

*Disclaimer: The data published was aggregated from each brand’s page as seen on the Entrepreneur 500 Franchise list. The accuracy of this data is reliant on the accuracy of the Entrepreneur.com information collected. If you are interested in buying one of the brand’s mentioned in this post, you should verify all fees and data provided above directly with the franchisor during the course of your due diligence.