Cleaning franchises are popular but are they right for you?
Welcome to Cleaning Franchise Reviews! Buying a cleaning franchise has become a popular way to start a cleaning business, before you make a decision, check out our reviews.
In The News
Janitorial franchise?Coverall?is receiving a $3 million bill from a Massachusetts court this week in a?lawsuit other franchisors are watching closely. At the heart of the case is a controversy over whether some franchise owners aren?t franchisees at all, but rather employees who?ve had to pay fees for the right to have their job.?Read More
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Janitorial Industry Statistics
How Does Cleaning Franchising Work?
The concept of franchising has been around for hundreds of years, but the boom in franchising did not happen until after WW II. The basic concept of franchising involves an individual buying the rights to operate the franchise name, and use their systems in a designated area. The Franchisor is considered the owner & seller of the system, the Franchisee is considered the buyer & operator of the system.
The Franchisee is required to pay a fee for the rights to operate the franchise. This fee can range from a few thousand dollars to over 100k. The franchisee also must pay ongoing royalties to the franchisor based on a percentage of their sales. The Franchisee is required to follow all rules & guidelines outlined by the Franchisor. Failing to do so could result in the loss of the operating agreement.
Advantages of Buying a Franchise:
- Proven systems in place for the Franchisee to follow
- Support from the corporate office
- Possible discounts on supplies & materials
- Instant name recognition
Drawbacks of Buying a Franchise:
- The significant capital investment required
- Restrictions on areas you can operate
- Ongoing royalties
- No control over other franchise operators reputation
Cleaning franchises started to become popular sometime around the year 2000. It may seem like a great idea to buy a cleaning franchise. The turn-key nature of most operations can be very appealing to anyone who understands how difficult it is to start and grow a business from scratch. Depending on the franchise, it may be the perfect opportunity for the right person. However, for many, it turns into a nightmare.
It seems that the most popular commercial cleaning franchise model involves selling accounts to owner-operators and having them service the account directly. In this model, the Franchisor sells a territory to an individual who will then develop the area with the Franchisor support.
The Franchisee then signs up cleaning contracts in the area, using the owner-operator approach as a selling point. The potential customer is told that someone who has their own business will be cleaning the facility. This can be appealing due to the well known high turnover rate in the janitorial industry.
Once the client signs up for services, the Franchisee will sell the contract for cash to an independent franchisee contractor who will do the work. Unfortunately, the contractor is buying the work without seeing the facility first. The buyer has no way of knowing if the contract is priced correctly, in many cases, it’s underbid just to get the deal. The contractor also has to provide 30 days of service, send an invoice to the Franchisee, then wait another 30+ days to get paid.
Coverall is well known for this approach and was banned from the state of Massachusetts after paying a 1 million dollar fine for misclassifying workers. Many other cleaning franchises follow this model as well.
Not all franchises operate this way. ServiceMaster Clean seems to have a more traditional business model, helping the Franchisee locate contracts that will be cleaned by hourly employees. In our opinion, this is the best model to follow. We’ve heard too many bad stories about unsuspecting contractor buying underpriced cleaning contracts from a franchise.
If you are considering buying a cleaning franchise, we would ask you to do as much research as possible. There are cleaning franchise alternatives available in the marketplace as well.