CLEANING FRANCHISE PROS AND CONS

[e9er]

What are the pros and cons of buying a franchies.

[Gnu]

to sum it all up in just a quick sentence...
"print your own money... never hassel with ads. designs or websites."
p.s. dont tell them you have your own stuff. they will walk right then and there, and you will be done in their eyes.


the cons are. you have to buy their overpriced equipment. but most of the equipment parts and pieces can be bought at interlink supply

[shane deubell]

Nothing but CONS mainly the 300% commsion they charge for new business when you can hire a salesperson for 50%

I "owned" and i use that word loosely, a cleaning franchise for 4 years, would rather forget.

[Steve Toburen]

Pros:
1. A turn-key business that includes (hopefully) all your systems and procedures that will cut yours off your "Building a Business Infrastructure Curve."
2. A recognized name that MAY bring you in some business.
3. A national sales organization that especially in insurance restoration Preferred Provider Programs MAY get you some work.
4. A "shoulder to cry on" support with a central organization plus other franchisees to work with. This can be a lonely business sometimes.
5. A "protected territory" that MAY give you some protection from other franchisees competing aganst you.
Plus for me the two biggies:
6. A good franchisor will "hold their franchisee's feet to the fire" and make them "accountable" to meet their sales goals. This lack of Personal Accountability is why I find so many cleaners today just drifting along for years without building their business OR their profits.
7. Exit strategy. A good franchise is MUCH easier to sell for usually a MUCH higher dollar amount.

Cons:
1. A turn-key business that includes (hopefully) all your systems and procedures that will cut yours off your "Building a Business Infrastructure Curve." The down side is you MUST follow all of their rules and i find most born-in-the-wool entrepreneurs (including me) don't "play well with others".
2. All other things being equal higher overhead with the royalties required.
3. Many times you have to buy their products which may be a) more expensive and b) not as effective.
4. Those "protected territories" cut both ways when you want to expand your operation and you legally can't.

So like most other things in business consider the up-side and the down-side and then you pays your money. Of course, what would be really neat if there was a seminar that would give you all the systems, procedures, support and even a limited degree of accountability (to the amount you want) of a franchise but would have no royalties, no restrictions, no buying requirements, etc. Hmmmm ...

Actually I had a Fresno carpet cleaner recently write me about a big franchise entering his area- read my reply here:

http://www.strategiesforsuccess.com/...hise-onslaught

Steve
www.StrategiesForSuccess.com

PS Let me stress here that our SFS seminar is NOT competing with our industry's franchise organizations. As I point out above there are more advantages than disadvantages to going with a franchise and IF at my age (57) I was starting a cleaning business today I would very likely go the franchise route solely based on the ease of a quick sale in five or ten years. Many of our SFS members are successful franchisees with varied franchises and are very happy with their situation. Others hated their franchise experience. The point is SFS concepts are universally applicable including the need to prepare your company for its eventual sale:

http://www.strategiesforsuccess.com/...-eventual-sale

[e9er]

Great points steve, Lets not forget you get paid once a month they do the billing.

[shane deubell]

Great points steve, Lets not forget you get paid once a month they do the billing.

and charge 4% "cashflow protection" fee as part of the royalty structure.I like carpet cleaning franchises but janitorial is robbery.

[e9er]

So i take it you can only find the cons with cleaning franchises. like i said before its not for everyone. You only get out of it, what you put in to it.

[shane deubell]

So i take it you can only find the cons with cleaning franchises. like i said before its not for everyone. You only get out of it, what you put in to it.

Yes only cons and nobody should take my word on it, you take those numbers to an objective accountant and have them explain it to you.
No cashflow

[e9er]

I know what fees i pay. I have made a nice living for the last 9 years from my franchise. Sorry it didn't work out for you.

[Dave Y]

I would recommend Professional Carpet Care Systems.

I know the trainer and the owner.

You don't have to re-invent the wheel. Complete systems in place, marketing, equipment and education.

With the continued training they make sure you do what you need to do and don't make the mistake of letting you do things when you get around to it.

This is where most cleaners fail.

Failure to implement.

They want to make you succeed to make sure the franchise also succeeds.

[dirtmonger]

As one of the newer franchisees for Professional Carpet Systems I thought I might throw in some of my decision points.

Trying to serve as managment/labor/sales/quality control/supply/new product development and marketing I felt that constructing marketing materials was my area where I needed the most help. PCS offers this in spades. Not only are the marketing materials already written, but they have been market tested and refined. To give you an idea how much material there is to choose from, a sample printout of all the different mailout materials fills a 6 inch ring binder. Want to do a seasonal promotion, back to school offer, schools out offer, its there. There is just a ton of materials ready to go. So this is the first advantage in my mind.

I also felt that with better marketing would come more chances to pitch. I felt like I would be less likely to price cut if I was confident that phone was going to ring again soon. I thought there was an advantage of being part of a larger organization. Further I felt I would appear more professional (This is just me). With a more refined marketing program I wouldn't be as likely to cut prices to make a deal happen. Don't know if this is right or wrong, just my own personal inclination. I felt like this alone would pay for the franchise costs.

I really liked the Professional Carpet Systems mascot Spotter. I think the new van wrap design featuring the dalmation puppy with a carpet wand sucking his spots off is a very strong marketing tool.

Approaching 50 years of age, I physically will not have a 30 year timeframe to make this thing work. So I am counting on better marketing to translate into getting to the Manager of Workers stage quicker.

In the event that the none of my kids want to clean carpets, I feel like being part of a national franchise with a defined/protected market I would have a better chance of developing a market value beyond the garage sale price of my accumulated equipment down the road.

PCS does come at a price

10K franchise fee with 85% interest free financing for 5 years at 0%.
A graduated monthly fee of 6% going to 2% based upon business volume.

But PCS offers

- No franchise fee on existing customer portfolio you come in with.
- No Non Compete agreement. ( you take all customers with you if you leave)
- Use your equipment, your cleaning agents, your suppliers.
- They have a system for printing of marketing materials that will provide savings nearly enough to pay for the franchise fees.
- PCS provides the materials for a monthly newsletter at no charge. Just select the articles you want to insert.
- I have a coach assigned to me specifically to be my go to resource.
- I also have Craig Jasper and Fritz Thompson to coach me.
- I get discounts on IICRC training classes via Sunbelt.
- As if I needed to say it again I get Spotter and an ocean of marketing programs and materials.
- PCS is not at a point to entertain charges for a national advertising campaign so no fees for that.
- They have a program that should a tech want to leave to start his own business he must stay on to train his replacement and then you will receive a percentage of his franchise fee for the first 5 years.

I see this industry as consolidating. This means the suppliers are getting fewer and the market is getting more evolved. We still have a huge % of people starting in this business and failing each year. 10 years ago tucking in your shirt was a competitive advantage. However I'm not sure that will be the case in 10 more years. The evolving competitive field will make entry more difficult I believe. Alot of us like being indepent of others and that is good. This is hard work and provides real value to our fellow human beings. I find this to be a noble business. I think it is really neat that I can go out and make more money sucking rugs than the bankers I used to work with.

The bottom line as I see it, starting out in this business requires getting the phone to ring, ring quickly and ring often. Better marketing, better presentation, better service delivery all ups my chances of building the momentum that will improve my odds for the future. That's why I joined Fritz and Craig.

Sorry for having run on so long. If you made it this far thank you.

Steve

[shane deubell]

I know what fees i pay. I have made a nice living for the last 9 years from my franchise. Sorry it didn't work out for you.

It did work out for me, i moved on because you cannot build a real business or sell for anything, just self employment
I have nothing bad to say about them, made alot more money then any job but still not a business just a job

Dave/Steve
Carpet cleaning franchises are good bets, janitorial not so much
we are having different conversations

[e9er]

It did work out for me, i moved on because you cannot build a real business or sell for anything, just self employment
I have nothing bad to say about them, made alot more money then any job but still not a business just a job

Dave/Steve
Carpet cleaning franchises are good bets, janitorial not so much
we are having different conversations

Tell that to the top franchise owner here that does 750,000 a year. that its self employment.
Its true some people just do it for extra income. so you can bulid a nice size business yes business.so we will agree to disagree.

[shane deubell]

at 10% profit margin that $75,000 year, sounds like a job

[e9er]

Where do u get 10%

[shane deubell]

60%- labor,supervision with payroll taxes ,comp ins
20% royalties
5%- materials/equipment
5% general office staff, payroll processing,scheduling,computers,rent, phones,cell phones,cars, etc
10%- owner draw
company cashflow- ?

you can push some numbers up/down but you will end up close
i didnt even include salespeople or marketing costs, finders fees.

[idreadnought]

I believe the most valuable thing about a franchise would b wdr work. Service master, serv pro, rainbow. They all have a vendor agreement with insurance companies. For just cleaning carpets I myself havn't seen much advantage to a franchise.

[e9er]

60%- labor,supervision with payroll taxes ,comp ins
20% royalties
5%- materials/equipment
5% general office staff, payroll processing,scheduling,computers,rent, phones,cell phones,cars, etc
10%- owner draw
company cashflow- ?

you can push some numbers up/down but you will end up close
i didnt even include salespeople or marketing costs, finders fees.

I agree on you fig but some of your fig are included in the royalties,no office staff. she does make 20% to 25% account. as i do.

Don't get me wrong some acc you only make 10% on, but you can make this up by doing cc, vct. you have to learn to keep your labor cost down. some times i don't like paying these fees. can i go out on my own yes. you make good points here.it gives someone who is thinking about getting into this biz that they have options.

[shane deubell]

That is my point and i am glad you see it that way, you like where you are. The whole conversation is more directed at a potential buyer, you or me are not going to change our minds, stuck in our ways for now. I get it

[e9er]

Now with all that said, i'll will be starting a residential cleaning and carpet cleaning business some time this year. no franchise on this venture.
look forward to here your advice on this shane. Thanks