of our Cleanzine subscribers know, I come down pretty hard on commercial cleaning
franchises. Not all franchises are bad. But when it comes to commercial
cleaning, franchise operations seem downright evil, or at the very
least, just plain greedy.
These franchises want up to $30,000 (in upfront fees and percentages) for a business that earns on average $50,000 - $75,000 per year. Not nice. Certainly, if you were to grow your janitorial service into a million dollar cleaning empire, that investment would have been well worth it. But that rarely happens.
Why do so few cleaning services break the $50,000 earnings per year mark? The reason often has to do with the limitations the cleaning franchise itself imposes on the franchisee. You are far less likely to grow it to any real size as a franchise.
Debt - the burden upfront
You may be considering buying a franchise in order to lighten your load as you startup. Not a good idea! You’ll be strapped with a heavy debt right from the start.
In the beginning, your drive and motivation is at its peak. Capitalize on your own burning desire to start your business off on the right foot financially -- not by shouldering a large debt.
The franchise misses this critical point: it is possible to start a cleaning service business without much, if any, debt at all.
In fact, this is one of best reasons to start a cleaning business, and why it is one of the top rated startups for first time entrepreneurs. Setting up a janitorial cleaning service can be done for less than $500!
Some of the limitations of a commercial cleaning franchise
Franchises restrict your territory -- and worse!
Before we had the benefit of immediate social media feedback loops, such as Facebook and Twitter, many franchises sold the same territory multiple times. This greedy act by franchises has been documented by government agencies in many large cities.
Speaking of immediate feedback loops like Facebook and Twitter, these social networking technologies go a long way toward giving you all the necessary tools and access which, in times past, were only available through the franchise.
In other words, franchises once served an important need. Now, there is no need to depend on them for the attributes which social media and new technologies freely provide.
In a nutshell:
Franchises are slow to adapt to new technologies
We started offering free business websites to our clients in 2007. Many franchises still do not include website services with their franchising fee.
A business website should be included or added into your agreement, not layered on top of your franchise agreement. It is not a frivolous business extra. Your website plays essential role in maintaining your business.
The whole point of going with a franchise (according to the franchises) is that they keep you up-to-date with the industry trends. Generally, that means they send some articles informing you about what the industry is doing as a whole. This is useless trade data which does not help any cleaning business with annual earnings that are less than $1,000,000.
Why not just create for you an excellent website for your cleaning business?
Limited legal options
Once a franchise, always a franchise. There are strict limitations placed on what you can do with your business if you want out, or want to add or modify services.
Had you built your cleaning business up to $100,000 a year and had been working for ten years, then decided you wanted out, you could sell it for $100,000. That’s enough money to start something else or to sock it away in your IRA.
Even if the franchise promises they will give you the right to sell your business, we advise that you do not take their word for it. Legally, they maintain the right to change the agreement, and you signed away all your rights.
Issues with selling a franchise
Paying attention? That last point is key!
Why would anybody buy your franchise if another one (being supported by your franchise) would be competing with your new buyer. The franchise single-handedly locks you into your business while creating another one. And, they have as their excuse, your desire to get out.
They now get two income streams from the same territory and force you two to compete against each other.
Franchise - the bottom line
A commercial cleaning franchise exists to make the parent franchise rich. It accomplishes this by leveraging hundreds of cleaning services.
The parent franchise company also exerts a substantial effort to gain complete legal control over your business, so it will benefit from those riches for decades. They sell you on this concept by convincing you that without them, you will not succeed. Their tactic is classic big business bullying. The basic story goes like this: you will be competing with them and you will lose.
Brings to mind the tactics of the mob!
What they do not want you to know is precisely what we teach. And that is, most people do not even want to hire someone from a cleaning franchise. So, in over half of all professional cleaning service situations, you would not even be competing with the franchises anyway.