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Carpet Cleaning Issues - Carpet construction, upholstery cleaning, stain removal, equipment, events, etc.

Re: Increased Fees - Reducing Profits

Posted by Derek (Derek Bolton), 14 December 2003

My dealings with Insurance Company's over the years have always resulted in a long wait for payment.

If you are taking a reduced revenue I hope that you are being paid quickly otherwise you are losing out at both ends.

Posted by Ivar_Haglund (Ivar_Haglund), 14 December 2003
Well bring that up with the CEO of the Fanchise you belong too.

You should have a voice in the matter

You pay your dues or blood money you do all the work and they take a piece of your pie

they might justifiy this by saying you will get more insurance work

Posted by Ian_G. (Ian_G.), 14 December 2003
Although not involved in Franchising over the past twelve years I have had several Sales Agencies.

Round about this time of year the terms of your agreement are usually changed. in the master companies favour.

It would be possible to go to Court and sue under EU law, and although potential compensation is quite high, the risk of going to court is high.

Therefore you put up with it or let someone else come in the revolving door.
Posted by lenpg (lenpg), 14 December 2003
Hi Aberview

ISS needs to recoup what they paid for the license of Rainbow; look at your franchisee agreement is your percentage payable static or variable? By the way forget any advisory committee they are probably in the pocket of the franchisor. (Cynical I may be but Iíve been there) regarding rebates it will always be there with Insurance companies.

There is only one winner the franchisor


Posted by woodman (woodman), 15 December 2003
Hi Amber

the problems that Rainbow frachisees such as yourself are encountering are quite well known through out the industry indeed I was talking only last week to guy looking to buy a franchise who said to me he wouldn't touch Rainbow with a barge pole at the moment.

I wouldn't completley rule out how your in house organisation can help you but it would need the will of the whole network and not just a few to make it work.

You need to get them to call an EGM of all franchisees excluding management at a location central for all.
You then need to set an agenda for the meeting, on arrival only, so it doesn't leak out.
What you all need to agree to do en- mass is a refusal to carry out all restoration work until your problems are resolved or at least an agreement to resolve.
The impact of this on your network would be major of course, loss of earnings, maybe the loss of contracts (which is happening any way).Your franchisor will threaten you with termination but then they would have to terminate the whole network making future sales of licenses worthless and I have no doubt the BFA would want to take a look.

Of course none of this would work if some of you carried on working as normal (and some of you will) but what would happen is the Franchisor would be made to sit up and take notice and at least listen to what you have to say.
Remember the whole strategy of franchisors in your current situation is to  Divide And Rule  if you join together it will panic them into action. Wink

Good Luck
Posted by SK1971 (SK1971), 15 December 2003

Do you pay a flat fee per month to Rainbow or is it a percentage of your earnings?


Posted by lenpg (lenpg), 15 December 2003

I agree with woodman but extreme care must be taken.  I know of a case where large commercial cleaning franchises were more or less doing the same as rainbow but were also withholding money from the franchises this sent quite a few into liquidation (quite a number lost every thing home etc) which in turn benefited the franchisor as they resold the license and accounts.

A few franchisees started to talk about their problems with each other. Each had name and phone number of another franchisee (this is never encourage by the franchisor) then the ball started rolling, the two nation papers and some local papers were involved in this, this in turn brought the Yanks into it, a committee for franchisees were formed this worked well until the franchises found out most of the committee became employees of the franchisor or preferred franchisees (read into it what you will).

Forget the BFA they appear to be a wet fish (who pays their wages definitely not you) even the office of fair-trading, DTI & the Police were contacted and involved.

I could write a book on how to be set up by a franchisor but no one would listen.

My recommendations if any one is considering buying into any type franchise.

Buyers beware. (One winner not you)
Ask a lot of question.
If you donít know what to ask e-mail me. (Iíve been there)

Best of luck and I mean that


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