General Cleaning Issues - Floorcare, car valeting, buying and selling businesses, pricing, staffing, market research, etc.
The pros and cons of Franchising
Posted by DP (DP), 4 October 2003When you have a constant source of work from one supplier, its very easy not to diversify and get caught up in just one direction because that direction demands 100% of your efforts all the time. So what happens when it all stops, yes when it hits there is a mess
After 5 years I and many others have found ourselves caught in this scenario and this has not been restricted to small companies, many were in the 3-10 mil turnover bracket although mine remained under 1mil. Now you might say well that was bad management, however the commercial industry we were involved in demanded that you were specialised and unrelated, and there were a lot of big guns involved
With a surplus of an office and admin staff, storage, vehicles and equipment etc I have decided now to look for an every day cleaning business which is what I had wanted to do some time ago, due to my current overheads I have to hit the ground running and therefore looked at franchises as a quick start.
However after trawling up and down the country for the last 10 weeks and even flying out to Belfast for the day to view one franchise, I found that many are designed around one man and a van. Other management franchise were often too expensive or too controlling or restrictive and I can tell you that some of the contracts I have looked at have been nothing less then ;Evil; many explain this as We are looking for the RIGHT person; and I would agree they are, their called suckers!
Sorry all franchisors but come on guys, this is almost abuse and every one is complaining that their franchisees arent making the most out of their areas, ever thought WHY. If those who have reached the comfort zone are killing you and many have said this is the case, then give them a reason to push through, remove the fangs for a while, its called Incentive. Yes they will want you to supply work to them, these on the whole are ordinary people not marketing experts, how long did it take you to become proficient? More then a few days in a classroom I bet.
Im still looking at franchises, however not prepared to get involved with any that restrict me from working within another associated industry (unless they can truly facilitate unrestricted growth) or any whereby the area is so small that you have to buy other areas almost from day one. I think that eliminates about 80% so I guess that I would not be the RIGHT person for many.
However when all said and done there is a wealth of knowledge out there and for many, franchises have clearly benefited people and allowed them to develop many personal skills and reap various rewards. After all there must be a reason for the boom.
So for now is there any Franchise company that can meet my needs, i.e. management type, fast start up, endless room for growth from the beginning, sensible turnover and pm,s (i.e no escalating penalties or blood transfusions for growth). I would not be interested in the one man and a van income or in multiple purchases of the same to make the package fit.
I would be more then happy to talk to anyone Franchisor or not who has a good service to market and shares the same passion to build as I do.
Idealistic! Maybe Fool with a cheque book! Afraid not
Alternatively I would ask a question of those with their feet on the ground, if you had to start again would you still do what you are doing or would you try something different ?
Sorry to all who have read through another epic post ( I really need to get out more).
Posted by martin_606 (martin_606), 5 October 2003Hi Dp!
Be careful with franchising.
I have had two ( from the same franchisor) and one wrong step and they will leave you out to dry. They gain from everything from insurance to products you need. plus they take a percentage, the more you earn the more they earn, or a set figure.
Yes, people make money every day franchising and some make a lot but the start up costs put you way behind from the start.
Don't mean to offend anyone with this post. Just speaking from a little bad experience, did i go to fast too soon
Lesson learned here though...
Start up costs for me so far about £150, with a franchise would of been £10,000+
Posted by DP (DP), 5 October 2003Hi Martin
Likewise Im not posting to offend anyone either, however, Iv been slightly worn down by the gripes of the franchisor both large corporate and individuals just starting to sell them.
I actually believe that there is a lot of benefit in becoming a franchisee for those who lack business confidence or who want to start in a new industry without the knowledge or simply just not doing it on your own (subject to the companies involved and their conditions).
Believe it or not, most people can build a business to a certain level, and we all (rightly so) pat ourselves on the back, and that may well be enough for many of us, however very few people can take it to the next level. That’s where we need both the clever and the experienced, trouble is for most of us, we don’t have the experience to know when that is.
Many of us see too much work as a good sign without realising the consequences, we often see catching up all the time as a pain, but ok. Those with more experience see this as a red flag; the old saying is “controlling the beast, not the other way around”. This is a common mistake and causes many businesses to eventually fail in the early days.
Franchisors with experienced staff can guide individuals away from these mistakes (the above is just one of many) and I would suggest that when things go wrong and they do, the franchise fee would seem very cheap if it would have stopped the problem from happening from the start.
My gripe is that many franchise plans are simply short sighted. Many have been launched based on the successful plans of others which has done nothing but compound the problems. A lot of the early franchise systems were never designed to be this successful, simply designed to develop and sell at a certain level. With the more experience candidates now applying, many franchisors cannot accommodate their success probabilities without either looping back to basic limitations or financial constraints, thereby reducing ease of real growth in the first place.
Big corporate companies who have now bought these early developments are finding that there is very few avenues to accommodate their ever increasing budgets without effecting the sharp end (the franchisee) no doubt causing an ever increase in numbers reaching that comfort zone.
My comments here are simply to provoke thought, nothing more.
So I guess that has just killed the last 20% of my franchise possibilities. Ah well anyone know of a good book about how to “Start a cleaning business on your OWN”.
Posted by woodman (woodman), 6 October 2003Hi DP
What area of the country are you in?
If you don't want to give too much away a post code will do
Posted by Derek (Derek Bolton), 7 October 2003Hi Guys,
You beat me to the question Woodman...
I have NEVER owned a franchise, perhaps if I was starting out and had some capital I too would consider it.
The benefits, as far as I see them, are that with a franchise you are 'up and running' almost straight away. You have the support and experienced backing of an organisation with work being fed through to you. This doesn't mean that you don't have to expand your own particular business because you do.
Some franchisees that I have spoken to over the years seem to have done extremely well. Others have told me that they feel that they are so locked into the system and can't get out.
If considering buying a franchise then read the agreement carefully.
There may be a clause that if you decide at some point to leave the franchise that you cannot run a similar business within a specified time (i.e. two years) I do know of one franchise who sued an ex-franchisee for doing this....he subsequently lost everything including his house... they simply made an example of him.
Look carefully at all the costs that you will have to pay on a monthly basis, possibly also a percentage on turnover.
Posted by DP (DP), 7 October 2003My arear is West London
ie codes would be UB - HA - SL and many of the W's
Posted by John_Lewis (John_Lewis), 7 October 2003Hello all, I run a patio cleaning and landscape gardening business and have been looking at various Franchises for some time now as I want to expand into more lucrative areas of the cleaning business. I have been talking to a company that advertises on freeads.co.uk under 'Franchises' and they were very helpful when I contacted them. The deal looks very good and it's the best I've seen up to now. This is the link to the ad site
I have read all the small-print and it seems excellent.
Posted by martin_606 (martin_606), 7 October 2003For those that want to franchise please be very careful.
This particular one is £14,000+VAT...£16450!
You can do so much with that money on your own.
You could take all the courses, carpet, upholstery and hard surface, buy the equipment yourself and still have a wedge of cash in the bank for advertising etc.
a lady and her husband lose everything and end up living in mother-in-laws garage.
the only thing she knows how to do is cleaning. She puts out 50 flyers and gets two jobs. she does such a good job she gets more jobs and takes on staff...
3 years later she is now a multi-millionaire with yatch, house and all the trappings...
She Franchised her cleaning business and is the creator of a cleaning services.
Be the franchisor not the franchisee
This post is not intended to offend, but it is true.
If you truly want to spend £16450 on a franchise I wish you the very best.
Posted by woodman (woodman), 7 October 2003Hi John
It is right and proper that you thoroughly check out any franchise purchase that you are considering.
Go to the British Franchise Association and see if this company is registered with them if not you might want to ask the company why.
Franchising is with out doubt a very good way to enter business but you must be aware of all that goes with it, as mentioned by DP some contracts can be very restrictive the fees might be to high,at what level do they expect you to market the business do all your materials have to be bought through them at risk of termination of contract if not,will they supply some of the work do they have national contracts(if the answer is yes,then this would suggest that a lot of ground work has gone in and nationals have been happy with what they have seen) etc etc.
You will also want to talk to existing franchisees ask them to supply you with a list and not just the successful ones.Ask them what percentage of failure do they have a responsible franchisor WILL answer these questions truthly, if they are evasive then you probably don't want to go any further.
If after you have examined it and you( and your bank manager )are happy with what you have been told then go for it.
As Martin points out the initial outlay may be high(I believe this company will let you lease purchase the equipment) but the rewards can far out strip this.
Posted by John_Lewis (John_Lewis), 7 October 2003Hello Woodman, many thanks for your advice. I will keep you posted on my progress.
Posted by DP (DP), 8 October 2003Just another point, if you decide to go looking as I am. It appears that franchisor's will often want you to sign a confidentiality agreement at the first meeting.
Don’t be put off by this "its normal" although do read it however inconvenient it may seem at the time, especially when you are in an interview environment.
I once made two directors wait 35 minutes tapping their fingers and huffing while I read every word of their 5 page agreement only to disagree with it.
We continued eventually by them allowing me to modify it, the problem is if you are already in the cleaning industry and looking for a new venture or an add on, there can be a slight crossover or conflict of practices if you don’t join them, which could appear to be replication.
I simply added the words just above the place to sign "With the exception of my current working practices" to date all companies have agreed to this without any problem.
I guess when it comes to contracts/agreements, the key is never rely on the “they can’t really mean that” or “they wouldn’t really do that” if you agree to it they do and they will. Millions of pounds exchange hands every day from people who made this mistake and there is an entire society who depend on it, their called “Litigation Lawyers”.
I agree with Martin that to become a franchisor would be the way to go and there are many organizations out there that can put the whole package together ready for sale, however at a cost. It seems that people can franchise almost anything these days but I drew the line when somebody at a show offered me a mobile animal washing service.
I listened with a smile to start, but as this lady explained the services offered and the equipment needed, the mental pictures and my imagination got the better of me. She finally gave in when she saw tears running down my cheeks and we both burst out laughing. I would have killed to have seen the contract on that one.
Perhaps the subject for another thread, The Most Unusual Franchises!
Posted by martin_606 (martin_606), 8 October 2003Dp is correct here. Read ANY contract and please don't be scared to say 'I don't agree with this this this and that etc etc.
Once you sign that contract you are then legally bound to adhere to it.
Posted by Derek (Derek Bolton), 8 October 2003Hi Guys
An interesting debate.... If there is a franchise for sale in your particular area wouldn't it be nice to talk to the previous owner to see why he/she is giving up?
Maybe you should...
Posted by martin_606 (martin_606), 8 October 2003derek
this should go for any franchise in any area.
I had to go to another area (Gillingham) a 100+mile journey to do my research for when I had my Franchise.
Glad to be finally on my way again to self-employment (there's nothing like it)
Posted by woodman (woodman), 9 October 2003Depending on franchise you are after,
If you go to discuss terms and conditions with a major franchisor they will not let you make any major changes to the contract mid-flow to suit your individual needs.If they did that they would have to change every contract through out the entire network possibly 3-400 businesses to suit individual needs making the system un-workable especially where contracts with manufacturers and Insurance companies are involved.
I am afraid every body has to sing from the same song sheet to obtain this kind of business.
Clauses such as, not being able to work in the same field if you leave for 12 months, are standard procedure
for most businesses not just franchises although this is being challenged in the court of human rights I believe, as is defined geographical areas.
You simply have to accept that if want in on a particular franchise with the 'big boys' then you have to be flexible to the business needs as a whole to make it work.If that is not acceptable then of course they will turn you down.
Posted by DP (DP), 9 October 2003My initial reference in respect of change was to the confidentiallity agreement at the point of the first meeting, which I have had no trouble with. I agree with Woodman, that it would be extreamly difficult to get a company to change the main contract, my point was to truly understand what it is your are signing before doing it.
However it would appear not impossible, as I have had one of the franshisors, strangly enough come back today to me agreeing to change one clause which he knew I didnt like, although I would add that this was a new company, still finding their feet, so I would reiterate the above. Odd that I never even asked.
Posted by Clean_Waterless (Clean_Waterless), 15 October 2003Franchise or not to franchise? that is the question!
You don't have to enter into a franchise agreement to have the benefit of an established business.
We offer an Affiliate arrangement which demands no up front fees but supply an exclusive range of product and a business identity that will give the affiliate a good push up the ladder when starting their business. There are plenty of opportunities like mine.
I originally thought of charging a franchise fee of £7,500 to bring you into my business but that limits the potential for my own expansion.
I think it is much better to offer a business opportunity but with the prospect of a long term relationship with the partner rather than suck them dry from the outset.
I am for building on the structure of the business for the affiliate, building their own wealth therefore building mine!
Posted by DP (DP), 7 November 2003Im impressed. This really is adaptive creativity and honesty at its best, as a student what more could you want. It seems you only need to add a large receptive client portfolio and a forum and your on your way.
I never actually thought of the non investment associate type of start up, perhaps I need to look into this further when I get time.
Posted by Fintan_Coll (Fintan_Coll), 7 November 2003DP, I cannot understand why somebody living in London would fly to such an obscure place as Belfast to look at a franchise.
Posted by DP (DP), 8 November 2003Um cos thats where the company was!
Belfast is only about 1.5 hours away including driving to the airport, and a lot easier to get to for me then some of the mainland places I have been to in the last month.
I drove just under 600 miles to one company and back plus a 4 hour meeting the other week total about 16-17 hours including motorway jams breaks.
If your serious as I am then you have to go to where these people are, I have not come across any franchises that are local so they are all a jornt one way or another.
Mind you with office space at £25 per foot here, which is cheap and nothing compared to what you could pay, I dont blame them for being somewhere else either.
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