Feb 1st, 2024

Would an ADU Franchise Thrive in Your Territory? Here’s How You Can Tell

Accessory dwelling units (ADUs) are an innovative solution that provides affordable housing to residential property owners of all kinds, regardless of their goals or reasons for expanding their existing space. With the growing demand for more solutions in the real estate industry, Anchored Tiny Homes has grown from just one territory in our home state of California to over a dozen franchises across eight states – and counting! – thanks to our first-to-market model that’s fighting to help solve the housing crisis.

As a new Franchise Owner, that must mean that you can open your own ADU franchise location anywhere and see massive success, right? Not quite. Let’s take a look at some of the things a good Franchisee candidate should consider and why before deciding where to open their Anchored Tiny Homes.

Two successful franchise owners at Anchored Tiny Homes look over plans for an ADU project.

The Top Factors to Consider When Choosing Your Anchored Tiny Homes Franchise

As the first and only ADU-focused franchise in the U.S., Anchored Tiny Homes is a fantastic franchise for any Franchisee candidate wanting to break into a profitable, emerging industry that’s seen minimal competition deliver the same quality product and service. While we began in California, we’ve welcomed Franchise Owners from across the country. As more states and cities recognize the housing solution that ADUs provide, even more prime territories have popped up nationwide.

It’s our belief in our business model that leads us to confidently say that any community can comfortably sustain a Franchise Owner and benefit from an Anchored Tiny Homes business. However, not all territories will provide a Franchisee with the same opportunity for growth or success. Before you choose the community you want to claim as your ADU franchise territory, consider the following factors to ensure your area is the right fit for your new tiny house business.

Codes & Regulations

The ADU industry is still a new, emerging service, and while our corporate-owned locations have seen major success in just a few short years in California, that’s because our home state has passed legislation allowing ADUs and is increasingly in favor of the solution they present to the American housing crisis. The same cannot be said for every city or county across the country – yet. There are residential housing markets across the U.S. that have recently passed laws allowing ADUs, some showing widespread acceptance of any type of ADU, while others only allow them to be built in specific circumstances.

Before you sign on for your Anchored Tiny Homes territory, you’ll be encouraged to do research of your own to ensure that you’ll be able to conduct business in the counties that make up your territory. At the same time, our team will support you in verifying the legalities around ADUs in your area. Even if your territory may not openly welcome ADUs right now, that doesn’t mean things aren’t already poised to change! Connect with officials in your area to see if there are any discussions on the docket around the topic of ADUs and how you can positively influence their position on the subject so you can launch your new tiny house business successfully!

Your Ideal Client

When you begin your franchise journey with Anchored Tiny Homes and start learning about the business model you’d adopt, it becomes apparent that ADUs can transform any community for the better. However, some property owners will be more receptive to the idea of building a tiny house in their backyard than others. With this in mind, the most savvy Franchise Owners will work to target only certain segments of the population within their territory, and they know who to target by putting together an ideal client profile.

For example, if you want to focus on increasing the inventory of affordable housing through ADUs, then your ideal clients may be property managers or real estate investors from high- or middle-income backgrounds. However, if you’d prefer to help families bring their aging parents or young professionals closer to home, then you may want to consider middle-class families living in single-family homes instead. Either way, it’s important to create a clear picture of who you want to target before you start looking at available territories near you.

Where You Can Find Your Ideal Client

Once you know who your ideal client is, the next step is to take a close look at the territories you’re considering to see if that type of client makes up a healthy portion of your community. With Anchored Tiny Homes, our business model is best suited for suburban and urban areas, but even some rural communities that are seeing steady population growth can benefit from our stick-built ADUs

Regardless of what type of property owner or investor you plan to target once you’ve launched your tiny house business, the most important thing to consider is what ratio of your territory’s population is made up of your ideal client type. If the percentage is too low, you may not see as much business as you’d like to maintain revenue goals or grow, whereas the alternative may result in consistent growth and an easy time scaling your tiny house business.

A Anchored Tiny Homes franchise owner shaking hands with their ideal client.
The Demographics of Your Territory

If you’re considering becoming an entrepreneur and intend to pursue the franchise route to do so, one of the first things you need to consider is the demographics of the area you’re looking at serving. If your prospective territory is the community you already live in, it’s likely that you’re already familiar with the types of people, homes, and businesses around you. However, if you’re looking somewhere new, you’ll need to consider the income levels, economic growth, age groups, housing types, and more to ensure your new business will see the right conditions for success and future scalability.

Population

As obvious as it may sound, not all communities may have the population density necessary to support an ADU franchise. In this industry, urban and suburban communities have the ideal population and are experiencing the effects of the housing crisis firsthand, making them a perfect fit for Anchored Tiny Homes. On the other hand, rural areas with more open land than people could be less likely to see the need or value of an ADU. Regardless of where you choose to open your Anchored Tiny Homes, you will receive a protected territory of 300K in population, meaning another Franchise Owner won’t be able to impede on your local tiny house market or steal any of your clientele.

The Contractor & Hiring Markets

As an Anchored Tiny Homes Franchise Owner, you’ll be able to launch your tiny house business on your own and never need to worry about putting in any labor yourself since you’ll be able to rely on subcontractors local to your area. While these professionals don’t need to be located directly in your territory, you’ll still want to find a team that’s within your region and understands the unique regulations and regional factors that may affect your business and clients. This way, you can service a mostly white-collar territory and still tap into the blue-collar contractor pool nearby.

In addition to subcontractors, as you grow your tiny house business, you’ll also need to hire W2 employees to handle things like sales and operations or project management. While people in these professions can be found virtually anywhere, it’s important to keep this in mind when choosing your ADU franchise territory so you can ensure you’re looking at areas with a healthy ratio of blue-collar to white-collar workers.

Future Growth & Changes

You’ve probably heard the question, “Where do you see yourself in five years?” many times before, but as a Franchise Owner, you need to ask yourself, “Where do I see this territory growing in the next five years?” If you’re starting to see massive, high-density developments popping up across your community, then your area may be trending toward a housing increase that could be beneficial to your business. However, that could mean that you’ll want to consider an adjacent territory since a wholly metropolitan area made up of only high-density high-rises won’t provide the environment for ADUs, while a slightly more suburban neighborhood nearby will.

Whether you’re familiar with the ADU industry and you’re eager to introduce it to your community, or you’ve learned about legislation recently passed in your territory and want to cash in on the business opportunity before someone else, you could have a prime Anchored Tiny Homes territory on your hands. Now that you know how to look for the perfect area to launch your own ADU franchise, your next step is to look a little closer to home and see if you are the right type of Franchisee candidate to become the newest Owner to join our franchise family. Head over to our blog on how to tell if you’re the ideal Anchored Tiny Homes Franchisee next!

If you’re ready to take a leap of faith and start your own business in our emerging industry, Anchored Tiny Homes is growing and excited to offer franchise investment opportunities to people like you. To see if you qualify for your own franchise territory and to learn more about how you can take control of your financial freedom, take our 1-minute qualification quiz to get started.

A succesful ADU build from the experts at Anchored Tiny Homes.