The Evolution of Private Equity in Franchising: A Journey with Neighborly

As the Chief Development Officer at Neighborly, I've witnessed firsthand the profound impact of private equity on the franchising landscape. Over the past 19 months, or rather 20 years, Neighborly’s perspective on PE has evolved significantly, reframing it not merely as an exit strategy, but as a catalyst for unprecedented growth and innovation. As a result of our PE “buy-in” and hard work across numerous areas in the company, we’re proud to have surpassed $4 billion in systemwide sales in 2023. Here’s what we’ve learned, and what we hope you will learn, about our private equity journey:  

Embracing PE at Neighborly 

At Neighborly, we understand the importance of aligning with PE partners who share our vision, values, and commitment to excellence. The decision for us to embrace PE was driven by a strategic assessment of its potential benefits for our company, franchise owners, and customers. One of the key drivers behind our embrace of PE is the dynamic nature of the home services sector. With increasing demand and evolving consumer preferences, PE presents an opportunity to propel our brands forward, enabling us to expand our reach and enhance our service offerings.

Central to our approach is the recognition that successful partnerships hinge on cultural alignment and a shared sense of purpose. We remain discerning in our selection of PE firms, prioritizing those with a deep understanding of franchising dynamics and a track record of fostering growth. Our partners have demonstrated a proactive commitment to driving organic growth, and investing in key areas such as operational capacity, leadership hires, and market expansion.

The Trajectory of PE in Franchising 

Looking ahead, we see PE playing an increasingly pivotal role in shaping the future of franchising. Platform-centric models and synergistic collaborations will redefine how companies do business, creating seamless experiences for customers and franchise owners alike.

What we’ve learned that sets PE apart is its multifaceted approach to success. From filling whitespace to boosting market expansion efforts, PE partners are committed to identifying and capitalizing on opportunities for growth. Crucially, they recognize that long-term success hinges on empowering franchise owners and prioritizing customer satisfaction. 

Most importantly, PE offers more than just financial resources; it provides access to invaluable thought partnership and strategic guidance. By fostering a collaborative ecosystem, PE enables us to tap into a wealth of expertise and leverage diverse perspectives to fuel our growth trajectory.

Transparency Drives Transformation 

At Neighborly, transparency is paramount. We leverage feedback mechanisms like Franchise Business Review (FBR) to gain insights from our franchise owners and drive continuous improvement. By fostering a culture of openness and accountability within our organization and with our PE partners, we supercharge our transformation and empower our franchise owners to reach new heights of success.

Our journey with PE underscores the transformative potential of strategic partnerships in franchising. By embracing change and prioritizing long-term sustainability, we are poised to unlock new opportunities and realize our collective vision of building a service community that is so remarkable, we become a beloved household name. At Neighborly, we are not just dreamers; we are architects of a brighter future for franchising. To learn more about franchising with Neighborly, visit https://franchise.neighborly.com/.

Written By Brad Stevenson, Chief Development Officer, Neighborly