| I am a business broker and I have facilitated the | | | | recoup your money. I do not have a problem with |
| sale of several commercial cleaning franchises and | | | | fees - this is a competitive business and it costs |
| spoken to the owners of many more. I also have | | | | money to get new business but at 4x this is a |
| a commercial cleaning business. Every franchisee I | | | | profit center for the franchisor not the franchisee. |
| have spoken to stated that if they could go back | | | | 3. Bidding Accounts With the franchisor bidding the |
| and go it again they would choose to not be a | | | | accounts they are setting the price. They then |
| franchisee. | | | | bring them to and in some cases you are required |
| Let me start by saying that I do not necessarily | | | | to take it. They have no incentive to try to get |
| have any problem with franchises. For budding | | | | the highest price, they just want to get the |
| business people franchises offer a structured and | | | | business. |
| simple way to get into an industry. Usually | | | | 4. Limitations With a franchise your growth is |
| franchises have an established brand identity and | | | | limited and you are confined to a geographic area. |
| a training program. Franchisors are very good at | | | | 5. Training I have not been through a franchisor |
| selling franchises and typically have exciting | | | | training, but I will say that cleaning is easy! That is |
| brochures that describe the riches that will flow in | | | | one of the beauties of this business - it is simple. |
| once you get started. For some, franchises are | | | | There are many excellent internet resources and |
| the right way to go. | | | | books that will teach you the tricks of commercial |
| The point of this article is to point out a few | | | | cleaning. Don't want to do that? You could hire an |
| items specific the commercial (business to | | | | experienced janitor and he or she could teach you |
| business, not homes) cleaning / janitorial industry. | | | | for far less that the cost of their training. You can |
| One only has to to a internet search for | | | | get all the forms and software you need online |
| commercial cleaning and the franchise | | | | for less than $200. |
| opportunities are endless. Jani King touts | | | | 6. You have to buy their equipment or supplies |
| themselves as the largest player here with, Jan | | | | Why not shop around, buy used or only buy as |
| Pro, ServiceMaster, Coverall and several others | | | | you need to. There are many accounts that do |
| also having a national presence. Even with the size | | | | not require the top of the line floor buffer. |
| of these franchises they only have 10% market | | | | 7. Do you really need the Brand? Customer |
| share in this industry. This article pertains to the | | | | loyalty is very low in this business. Most often |
| unit franchises who actually perform the cleaning, | | | | customers only care about the consistency and |
| not master franchises or area developers. | | | | quality of the work and the price rather than the |
| In a nutshell here is the concept. You purchase a | | | | name. |
| franchise from a franchisor. With the franchise | | | | 8. Are you just buying a job? Most people want |
| you get training, the equipment to perform the | | | | to own a business because they want to be |
| work (usually new) and some startup accounts. | | | | rewarded for performing. With a franchise your |
| You purchase your insurance and bond through | | | | rewards may be limited. |
| the franchisor. Once up an running the franchisor | | | | 9. Don't want to do Sales, Billing or deal with |
| handles the billing, customer relations. Often you | | | | Customer follow up? There are alternatives. |
| are required to purchase your supplies through | | | | There are Janitorial brokers who sell accounts for |
| the franchisor. | | | | those who don't like to sell. You can work as a |
| Let me stop here and say that a franchise is | | | | subcontractor and never have to deal with the |
| probably a good choice if you want to do the | | | | customer. You can outsource the billing if you |
| cleaning yourself and stay small. If you want to | | | | want. |
| grow and add accounts and employees then you | | | | 10. Beware of projections and financial promises |
| need new accounts. You can either get them | | | | No one can predict how well you will do in this |
| yourself or purchase them from the | | | | industry. This business is resilient to economic |
| franchisor....that brings me to my ten points. | | | | pressures and will always be in demand but no |
| 1. Cost: The cost of acquiring new accounts are | | | | one can predict the future. |
| expensive! Usually they are in the neighborhood of | | | | For some franchises, with the option of getting a |
| 4x the monthly gross. A $500 account would cost | | | | "business in a box" is irresistible. My advice is to |
| you $2,000 - Ouch! | | | | start small, buy what you need as you go and |
| 2. ROI: Using this example and a 40% profit | | | | avoid going into debt as much as possible as you |
| margin it would take you 10 months to just | | | | go. |