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davids3511

  • Posts: 2506
Re: For those who franchise...
« Reply #20 on: December 08, 2012, 05:20:17 pm »
Quote
do you get 20 per cent on all his work .. ie work he picks up after he goes out on his own ? intereating concept
He wouldn't be in a position to get that work if it wasn't for me and my company. It's my name and number on his van and invoices. The counties are signing up with my co not the individual cleaner.

Interesting.. tho what would happen if a customer like next door or over the road comes out and asks him for a quote? which happens sometimes? he may so il come over and do them for 20 quid.. no one would no. do you try and quote all the jobs? then pass on to the franchisee
He adds it to the list. I am happy for him to quote jobs. He might get away with a few on a small scale but any more and eventually I would catch him. I work the same area and know every job he has. I would eventually see him or one of the other windies I know would mention it to me.


Window Washers

  • Posts: 9036
Re: For those who franchise...
« Reply #21 on: December 08, 2012, 05:21:23 pm »
how about pay him 80% of all money into your account and you keep 20% and all the names and numbers of customers you keep in actual fact i guess you manage it but this way he hasnt got any details could it be done that way around ?

what would be a nightmare to run and also make him an employeee would'nt it ?
If your not willing to learn, No one can help you, If you are determined to learn, No one can stop you ;)

davids3511

  • Posts: 2506
Re: For those who franchise...
« Reply #22 on: December 08, 2012, 05:22:03 pm »
what happens if they let the business slide??
He needs to complete at least 80% of the work in any given month. Any more than 5 cancellations and he is in breach.

dave0123

  • Posts: 3553
Re: For those who franchise...
« Reply #23 on: December 08, 2012, 05:22:21 pm »
Quote
how about pay him 80% of all money into your account and you keep 20% and all the names and numbers of customers you keep in actual fact i guess you manage it but this way he hasn't got any details could it be done that way around ?

He would still have the address of each customer though and the price per clean.. still can't stop him knocking and saying ive mis laid your number can i have it.

If he paid 80% of the money to you it wouldn't work i presume because there would be debts on the round at the end of the day week or month... at the 20% i imagine will be based on turnover
Dave.

davids3511

  • Posts: 2506
Re: For those who franchise...
« Reply #24 on: December 08, 2012, 05:22:50 pm »
how about pay him 80% of all money into your account and you keep 20% and all the names and numbers of customers you keep in actual fact i guess you manage it but this way he hasnt got any details could it be done that way around ?

He's just a subby then and you are going to be looking at vat registration.

dave0123

  • Posts: 3553
Re: For those who franchise...
« Reply #25 on: December 08, 2012, 05:24:37 pm »
have you taught him to price jobs then? as i know for a new starter this is the most important thing to lean so easy to under price jobs.
Dave.

dave0123

  • Posts: 3553
Re: For those who franchise...
« Reply #26 on: December 08, 2012, 05:26:38 pm »
I know you could collect certain amounts of money on his behalf though through customers paying on-line through the main business bank. bit like direct debit.


this must be legal as there is another company not window cleaning related but collected direct debits on behalf of there franchise's
Dave.

davids3511

  • Posts: 2506
Re: For those who franchise...
« Reply #27 on: December 08, 2012, 05:27:11 pm »
have you taught him to price jobs then? as i know for a new starter this is the most important thing to lean so easy to under price jobs.
Yes, he picked it up quickly.

Window Washers

  • Posts: 9036
Re: For those who franchise...
« Reply #28 on: December 08, 2012, 06:29:19 pm »
how about pay him 80% of all money into your account and you keep 20% and all the names and numbers of customers you keep in actual fact i guess you manage it but this way he hasnt got any details could it be done that way around ?

He's just a subby then and you are going to be looking at vat registration.
what happens when you are vat registered and hes not or vice versa, im not knocking you interested thats all
If your not willing to learn, No one can help you, If you are determined to learn, No one can stop you ;)

dave0123

  • Posts: 3553
Re: For those who franchise...
« Reply #29 on: December 08, 2012, 07:17:56 pm »
[quoteQuote from: Crystal-clear on Today at 05:16:22 pm
how about pay him 80% of all money into your account and you keep 20% and all the names and numbers of customers you keep in actual fact i guess you manage it but this way he hasnt got any details could it be done that way around ?

He's just a subby then and you are going to be looking at vat registration.
what happens when you are vat registered and hes not or vice versa, im not knocking you interested thats all][/quote]


Its two separate business's so it would not apply if David hit the vat threshold to his franchise's.. but he would have to add vat his royalties i dont no
Dave.

Crystal-clear

  • Posts: 3029
Re: For those who franchise...
« Reply #30 on: December 08, 2012, 07:42:50 pm »
He would have to charge vat anyway as his income will grow but I see the point , I was just thinking I know he has the prices but rather then make it easy it's just a thought all funds get sent to you he then Invoices you And you pay him out Accordingly,only other thing 5 cancelations :) is that in total per clean ? It's just new cleans cancel and people change there mind as you know it might not be his fault if they cancel

dave0123

  • Posts: 3553
Re: For those who franchise...
« Reply #31 on: December 08, 2012, 08:01:39 pm »
yeah i get where ur coming from,


i imagine though if people pay by online baking it would still get sent to the main company bank account as it would be set up as a payee on customers bank, you would probably just take the royalties fee from the amount that comes through.

Cheques would still be sent to company business anyway i presume. that's how id do it anway
Dave.

Ian Lancaster

  • Posts: 2811
Re: For those who franchise...
« Reply #32 on: December 08, 2012, 10:46:35 pm »
does it cost much to set it up.. on the legal side .... not on equip/van
Cheapest way is Ian Lancasters package at 1500. You get the legal stuff plus ongoing advise.

Thanks David ;)

Further info: click the links below

Ian Lancaster

  • Posts: 2811
Re: For those who franchise...
« Reply #33 on: December 11, 2012, 11:05:35 am »
I've had a careful read through all the posts and added some comments.  These are my own opinion but I believe them to be accurate in respect of franchising.  My Franchise Agreement (Contract) was drawn up by a specialist Franchise Solicitor so any statements regarding the terms and conditions of the contract are factual.

 Dave0123:

if you only trained the fella up for one week how did he learn the jobs or round when you passed the work on to him? i mean where to drive to and so on if he had never been to the house before?

Each new franchisee I took on was given a list of all the customers I was passing on to him (between £200 and £400 per week) with a letter explaining to the customer that he was going to be cleaning their windows in the future.  He then went out and delivered all the letters, learning the location of the jobs as he went.

WinproClean:

Is there anything in the contract to prevent the franchisee from running a separate business, totally separate to his franchise?

No.  Except that it must not:
      (a) Be of a business type that in any way competes with my business, or:
      (b) Adversely affects the franchisee’s performance in the running of his franchise.


Davids3511(answering the above):

No, not once it is nothing to do with the franchise. I see this as a weakness. What if he decided to setup a domestic cleaning business based on the customer base for his wife to run. Don't think I could stop that but I wouldn't be too impressed and probably wouldn't renew his contract one it expired.

The contract prevents this.  The customer base is provided to the franchisee exclusively for use in the running of his franchise.  Doing the above would be a clear breach of contract and grounds for termination.


Cowboy

what happens if they let the business slide??

At the commencement of the franchise a target is agreed.  The franchisor must provide enough work (within an unspecified time scale) to allow the franchisee to achieve the target; the franchisee must complete the work provided (less allowance for ‘not this times’, bad weather etc – all at franchisor’s discretion)  Consistently losing jobs without acceptable explanation is breach of contract leading to termination.

Crystal Clear

how about pay him 80% of all money into your account and you keep 20% and all the names and numbers of customers you keep in actual fact i guess you manage it but this way he hasnt got any details could it be done that way around ?

You  can’t pay him, that would make him an employee.  Franchisees are independent business owners operating under a legally binding contract.  They must schedule their  own work, collect all the money etc. and then pay royalties to the franchisor.  For this reason they must have all the information on each and every customer on their round.

Dave0123

at the 20% i imagine will be based on turnover

In my system, yes.  Some franchises work on value of work available, so the franchisee has to pay whether he manages to do the work or not, some operate on a fixed fee – so much per week/month regardless of how much work has been done.


Dave0123

I know you could collect certain amounts of money on his behalf though through customers paying on-line through the main business bank. bit like direct debit.  This must be legal as there is another company not window cleaning related but collected direct debits on behalf of there franchise's

Quite true, but then the franchisor would be acting as a trustee on behalf of the franchisee.  All money collected would still be the property of the franchisee and must be kept in a separate account and submitted (not “paid”) to the franchisee without any deductions etc.  The franchisor then invoices the franchisee for his royalties.


Ian Wicks

what happens when you are vat registered and hes not or vice versa, im not knocking you interested thats all

The same as with two completely unrelated businesses.  The Vat registered one has to issue vat invoices and add vat to the invoice total.  The non-registered one doesn’t, but can’t claim back the vat he has to pay.

Crystal Clear

all funds get sent to you he then Invoices you And you pay him out Accordingly

As for Dave0123 above.  This should be avoided as much as possible as it increases the franchisor’s turnover unnecessarily and causes a lot of extra administration and accounting work and can also fog the issue of whether a franchisee is genuine or a disguised employee.

Dave0123

i imagine though if people pay by online baking it would still get sent to the main company bank account as it would be set up as a payee on customers bank, you would probably just take the royalties fee from the amount that comes through.  Cheques would still be sent to company business anyway i presume. that's how id do it anway
   
Answer as above: All payments should go direct to the franchisee, doing it your way could give HMRC grounds to declare your franchisees are really employees unless you are extremely careful in how you account for and transfer the money.