General Cleaning Issues - Floorcare, car valeting, buying and selling businesses, pricing, staffing, market research, etc.
Buying Commercial Cleaning Franchise
Posted by Ray_Young (Ray_Young), 7 February 2004My young son came across this web a week ago, not into computers myself but will now the info is very good. I own a small cleaning company, most of the work I do myself but would like to expand more into the high street/retail outlets and are finding hard, I’m considering buying into a Cleaning Franchise! I note that some are talking about Global; they don’t seem to advertise at all nor are they in the franchise magazine, but some are! Example Minster, Jani King ECT all their client base portfolio’s look good. Has any one joined a cleaning franchisee? I could go on with a list of question but it will fill the page.
Any feedback will be greatly appreciated.
Posted by Happyeater (Happyeater), 7 February 2004Ray,
You have a private message.
Posted by heritagecleaning (heritagecleaning), 7 February 2004And another from me
Posted by squeaky (squeaky), 8 February 2004Thats a bit cloak and dagger !!!
Come on lads share it with us all.
I know that you have to be a bit cautious sometimes but give us some 'between the lines' info
Posted by timeform (timeform), 8 February 2004
hi ray whatever you do do not GO WITH GLOBAL as they just take your cash what a cow boy outfit just ask a few of the global contractors i and a
few others have lost a good deal of money so please take heed
Posted by catrodney (catrodney), 8 February 2004Hi Ray,
Simple answer here,send me the money you are thinking of passing to another company for a finders fee?? and i can let you have details of all work which is up for Tender or you could access the information which is FREE by yourself
Hope this makes sense to you,other words DONT PART WITH YOUR MONEY to any company offering to find you work.
Posted by heritagecleaning (heritagecleaning), 8 February 2004Sorry for the cloak and dagger.....I am legally bound not to disclose any details of what went on between me and my former franchisor, in any more detail than that the resulting termination was 'satisfactory to both parties'. Or I could get sued for a lot of money.
Posted by Happyeater (Happyeater), 8 February 2004I was working with a contract cleaning Franchisor.
Don't do it.
Posted by DP (DP), 8 February 2004Ok so without mentioning their name and in the true spirit of fiction, what have you heard from others about their problems, which of course we understand has nothing to do with your circumstances or the company you were involved with?
Posted by RAINBOW69 (CATMAN), 8 February 2004Ray,
If you visit the site whichfranchise, and have alook at resales, you will see that there are contract cleaning franchises on there.
Don't believe what you see in the magazines for franchising, you need to speak to the EX-FRANCHISEES of contract cleaning, for everyone who says he making a packet, there will be a dozen who aren't.
There's one by me who is advertising how to start a carpet cleaning business, carn't make that one out and another who's gone bust.
The question that I aked myself when looking at them is, if these are that good, then why are there so many up for sale, why do they advertise them so much and why do they promsie megga bucks?. Tread carefully
Posted by Happyeater (Happyeater), 8 February 2004Go have a look.
Just didn't want to repeat myself.
Posted by Ray_Young (Ray_Young), 8 February 2004
Hi and thanks for the information
That web page is good; lot of info, someone else is sending me the newspapers reports on this. Unable to find this co on which franchise web page. It lists the others.
My son only 11 hit on the nail for me, what you would be paying why not employ, some to do your sales!
I think will pass on franchising
Posted by Happyeater (Happyeater), 8 February 2004Phew!
Posted by kcs (Marbles), 8 February 2004Ray
Wish I had passed on it!
Posted by Musicman (Musicman), 8 February 2004Just to throw a bit of light on sales (not wishing to rain on anyone's parade) but the going rate for a decent, experienced cleaning salesperson is £25-£35k basic, around 6% of the contracts first year's gross profit as a commission, a quality car, benefits including health and pension schemes - plus the on costs.
You gotta be looking at around £50k a year. You still want to employ someone?
Furthermore, if you took on someone full time could your business support the contracts they should bring in? Is your catchment area big enough for someone full time?
So you think the option is to take someone on part-time? No experienced cleaning salesperson is going to work part-time (or at least very unlikely).
When I post a reply to a topic I always try to be constructive and avoid being negative if I can so here's an idea to throw around.
Most people seem to hate franchises (although there are some good ones - they just haven't been mentioned in this thread) so, now that this forum has many contributors from all over the UK why not set up some kind of Trade Association?
This is the way that Interflora works (and very successfully).
Between us we agree various principles that are worked to, and divide the UK into say 80-100 regions - all offering high quality services (worked to a standard along the same lines as a franchise).
This way, wherever a client is, they can also get a local service provider that understands the issues specific to that area (again similar to a franchise).
Leads can be passed around between the members and additional marketing/sales could be afforded for serious business growth.
Sure, there would be a cost (as Interflora members pay), but nothing like the figures demanded by the franchise companies.
If you want to develop your business at a reasonable and affordable cost and upset the 'big boys' this is the way to do it.
PS Mike/Woodman if you want to tart this up and start a new topic with it feel free.
PPS Of course we all use Express as our supplier.
Posted by Happyeater (Happyeater), 9 February 2004This I posted on a US board as they too are attempting to set up a similar scheme.
I tried to set up something similar about 4-5 years ago over here and unfortunately it never got going. I will outline the issues we had to allow you to prepare/ discuss them prior to your get together in August.
The CleanNet Group was to be the name of the members involved (you're welcome to the name, a present to my US cousins, if you want )
I'll break it down into issues and then how I was going to resolve the problems.
1. Who does the work and makes the contact (must be professional) and what to use, letters, phone calls. Who then does the presentation and how to bid.
2. Where the money comes from to meet business cards, letterheads etc?
3. How does the successful member get rewarded for a National /local shared account?
4. Logo design ideas.
5. Who gets the account if several members are close to the site?
6. How will it be invoiced, who will collect and apportion the money etc?
At this stage I was about to give it all up as a bad job but, we persevered.
So, a committee was elected by the membership. The people wishing to be a part of it would pay say $100 a year. This would go towards stationary and meeting costs.
The committee met to discuss an agenda set by the members, minutes were taken and then sent/e-mailed out.
A printer/designer was asked to prepare logo ideas and prices for printing, this was done free, ideas for names and logo's were shown and voted on at the meeting.
The reward for signing a national account or for sharing a local account would be 20% of the first months invoice, the bigger of the account, the more work therefore a bigger invoice which meant a bigger commission.
Work would be offered to the nearest geographic member. If rejected, then the next nearest would be offered it. The committee discuss what to bid and how.
The Group sets itself up as a business (costs paid for by the membership) Rules set by the committee. This business invoices the National account, collects payment then pays the member carrying out the work. A % is agreed to cover costs, taken at source by the business. The annual accounts are circulated to all members and profits (if any) shared.
1. They loved the idea to supply a group at largely discounted prices.
2. The committee negotiates the prices and the members deal direct. This benefits everyone.
1. Done locally using the group name or nationally. Costs were high, business cards and flyers were better and more cost effective. A database of possible targets could be shared at the meeting, with contact names etc where known.
I do hope this gives you some ideas on issues you will face. It never got going here probably due to the fact I didnt have the internet or forums like this to assist me. Time was not allowing me to chase a 'pipe dream' maybe now I could....when I get time!
Posted by DP (DP), 9 February 2004Many moons ago the company that I worked for, negotiated the position of becoming a national operations and call centre for the Prudential with respect to fire and flood claims (long before the Rainbow’s and Chem Dry's).
The problem was that we were not national, so we came up with the idea that as much of the work was carpet related we would employ a network of carpet cleaners.
They would have to pay us £300 for joining and additional training and if they didn’t receive at least that amount of work back in the first year, we would give them their money back, and so a network was borne in excess of 120 carpet cleaners if I remember correctly.
Like all best laid plans the Pru pulled out at the last minute leaving us with a big problem. The company decided that it could still make use of the network as we still received an element of works and embarked on a national sales campaign, which ultimately resulted in failure.
The network started to crumble, until one prominent member who had acted as their spokesman until now, decided to go one step further ultimately taking this network and its responsibility off our companies hands, which resulted in one of today’s largest franchise companies in the UK.
So what’s the connection you may ask. Well I don’t think much has changed, the onslaught of moans, gripes false accusations and general discontent took us completely by surprise (even though they were offered their money back) long before we had any real problem with the Pru.
I think as long as you take a low key or part time interest with small joining fee's thereby little funding and no real commitment to fulfilling group wise targets, you will be asking for trouble.
The big turnaround of the above story was proper full time marketing paid for by serious investment by its members and a management team that was answerable to its members.
There is nothing new here at all, as this has been attempted with various success over a great number of years under different guises (same box different wrapping).
My recommendation is either: Don’t promise anything and try for another accreditation body with some benefits to its members thereby low fee's (however do we need another?).
Or: Do it properly with serious investment and a full time management and marketing team as a business with all members benefiting.
But either way please don’t romance about all the moral values (that has been so done to death) and have some very good answers for your members when they start to ask those awkward questions like “who is really getting the benefit out of this”.
After all doesn’t the word "Ethical" have a number of meanings these days dependant on your point of view.
Dp (well somebody had to disagree )
Posted by Musicman (Musicman), 10 February 2004So having read and re-read (several times) all of that DP are you saying that if it’s done properly with real investment rather than some half-cocked amateurish attempt it should work?
I wasn’t actually suggesting that I organise it myself, rather throw it in as a discussion point to see if there was much of a response.
Believe me, if I do get involved in anything it will be done with the utmost professionalism and as someone with a sales and marketing background in commercial contract cleaning I can see that it would need proper investment and management.
To my knowledge nothing like this has ever been done within the office cleaning industry before – but feel free to correct me if I’m wrong.
There would be several benefits to members of such a network, primarily greater purchasing power, increased market awareness, enhanced business opportunities such as the ability to go for National Accounts, and shared knowledge - along the lines of these types of forum.
These are the supposed benefits of belonging to a franchise – but the franchise companies get very greedy, constantly moving the goal-posts, increasing fees, applying onerous terms and conditions of the agreement – and in return offering very little. All contributions on this forum from those individuals who either are, or were, franchisees seem to reflect high levels of disenchantment with the franchiser.
There are many owners of small cleaning companies who use this forum who would love to increase their turnover but are simply not large enough to employ sales people – and find most of their time is taken up with the operational side of their business.
So can there be a middle ground between operating as a stand-alone company and being part of a franchise?
Personally I think that with the right infrastructure that it is possible. If a decent salesman is going to bring in say £750k a year for £50k outlay why not have that person work across 5 territories bringing in £150k a year for the outlay of £10k each?
At a 20-25% margin that would yield around £34k profit for a £10k outlay so you tell me – who is getting the real benefit?
Wouldn’t this solve the problem that Ray (who originated this topic) faces?
Having said all that, 48 hours on, and in spite of a further 75 reads since I raised the idea, not one person has come back and said that they would be interested, so maybe it’s a crap idea after all!
Posted by DP (DP), 10 February 2004Musicman, if you can get a group of people together on here that are all prepared to give you or anyone else £10k to find them £34k's worth of profit then hey who am I to argue it sounds great.
You say the concept would be for about a 100 regions, well you can put me down for one of those (about number 99 I hate being the last to do something) and that’s a solid commitment!
The concept has always been good in which ever guise (I did say same box different packaging) and I really don’t know why these things fall over but they do.
I suspect it may have something to do with value (real not perceived) or our human quality to compete or simple lack of trust in our fellow salesman especially when it involves paying them money.
Although not a franchise, maybe it just needs half a dozen models to generate the tried and tested element before others jump in, which seems to work for them.
One thing for sure is that without early investment in the structure it will have little chance, and then of course comes return and profit which will have to be paid back somewhere, there’s that value thing again.
There may well be more interest, now you have posted the numbers on here, with a little more info (or even a prospectus) who knows you may have started something, I think you only need half a dozen at the most to start and once there is some tangible evidence of benefit others will follow.
Posted by kcs (Marbles), 11 February 2004Hi Musicman
Seems like a good idea? Or are you just setting the foundations for yet another rip of Franchise House? (I am not for one minute suggesting this is your intention of course). I am at the moment reluctantly involved with a national. Musicman, how would you stop all the problems you posted i.e. greedy franchisors, moving the goal post etc? The larger the “Trade Association” gets the more pressure on them to perform. This to my mind would mean doing all the things franchises dislike about their franchisors. The more established member would be put aside to appease the newer members.
Greater buying power – I can purchase my materials locally much cheaper that my “National” can supply. I agree it should work out better but again the pressure to perform – easy to add a few extra percent onto consumables.
Your Figures mean that a salesman would need to bring in around 60 £1000 contracts every month in such a small area – that’s just under 3 per day on a 21-day working month. I do however see them as only speculative figures.
Who would manage this organization? Would they be paid members? If so who would decide their salaries? Who would have sole ownership of the contract?
All of these questions and many more would need answering before I would commit 10k and I think it is a good idea in principle. Personally I think it would need to be run along the lines of a non profit making entity although not quite sure how that would or could for that matter be achieved.
Hopefully this thread can keep up the momentum and more ideas flood in cause I think we would need them.
Posted by Happyeater (Happyeater), 11 February 2004As my post explains, you just need committed people who will give time and effort to make it work. No need for salesmen. If I was offered 4 Woolworths in my area for the price of attending a few meetings, do the quote and do a presentation, I'd gladly do it.
Times that by 20 people also committed, working together with guidelines. Bi-monthly meets to discuss bidding etc. Im sure it would work, I'm a salesman really, presented and signed loads in my time.
Just think that 100 regions or a 50k salesman is OTT. Just need 20 like minded people.
Posted by DP (DP), 11 February 2004Yup I tend to agree with the low numbers, however lets not get too carried away with this 50K salesman thing and I think it was + 6% commission as an example.
Although I have come across them, I don’t know many small to medium companies who would singularly pay that kind of money for an employed salesman and especially not an additional 6% commission on all sales.
Maybe after the first £3-500k but not a wage and commission as well from ground zero, but maybe my interpretation of this is wrong and I will concede if it is.
But on an expenditure of £50k plus at 20% gpm you would be looking at approx £250- £300k increase in turnover P/A just to break even, so there would be little benefit unless you are aiming for increases way above that which would be compounded if commissions were to be paid below these numbers.
However there are far more economical and common salesmen type packages out there and variants like telesales, and before we get into the "Good sales personnel" argument, there seems to be a great number of companies out there managing just fine on considerably less outlay than £50k plus for any one sales individual.
Divided amongst a number of companies, maybe!
So I really don’t think the figure is a real demonstration or comparison for anything at this level, unless of course the example was aimed at the higher turnover businesses?
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