Cleaning Franchise information for entrepreneurs.

Cleaning Franchises

(& why you don't need one!)

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Everybody would love to start their own company but almost nobody does. It's hard to make that big change in life, to learn new skills and take on new responsibilities. Becoming your own boss is like leaving home for the first time. It's not just hard, it's painful!

That's where cleaning franchises come in. From long experience they know all your doubts and for each one they have a well-rehearsed answer. They do their best to turn your dream of starting a business into a raging fever. The problem is that you pay way too much for what little a cleaning franchise can offer you.

How Much do They Want? Too Much!

Terms vary, but generally you make a large payment up front (from under a thousand dollars to over ten thousand dollars) to buy a cleaning franchise. Then you make ongoing payments based on a percentage of your gross sales. It's like buying a house. You make a big down payment, then smaller monthly payments until you've paid the bank off. The difference is that eventually you can stop making house payments.

You never stop paying for a franchise. It's common to pay 5% to 8% of gross sales, that means that if you have a 15% profit margin, you will have to give them one-third to over one-half of your profits, forever.

That's way too much of your hard-earned money going into the franchise owner's pocket!

You Can Be Cheated if You Buy a Franchise

According to a recent article in a major California newspaper "A Los Angeles Superior Court judge levied a $232,500 fine against Speedee Oil Change and Tune-Up of the West for misleading prospective franchisees about the cost of getting an oil-change business up and running. The fine against Speedee...was part of $700,000 in penalties levied against it....The Department of Corporations said the franchises were not accurately informed about such important considerations as start-up costs, sales projections and break-even costs."

An oil-changing franchise is a lot more expensive than all but the most costly cleaning franchise. So, you know that the people who bought into these franchises did everything right.

They probably hired a lawyer experienced in franchise law to look over the contract. Then paid a CPA to help them come up with a formal business plan. And since most of them had to borrow the money to buy the franchise; they took out a loan application which their bank OK'd.

Despite all the time, money, and just plain hassle they went through -- they still got burned.

What Do You Get When You buy a Franchise?

When you buy a franchise you get three things. You get a territory. You get to use the franchise name (including their trade name, trademark, and logo). And you get to use their Method of Doing Business.

Name

Name recognition is very important for some types of franchises. By the time he's five any kid in this country has seen more of Ronald McDonald than he has of Santa Claus, the Easter Bunny, and the President of the United States combined. So, it may well be worth the money to buy a McDonald's franchise.

It's different for the cleaning industry. There are dozens of cleaning franchises and more coming along all the time. Can you name three? More importantly, can your future customers name three? Probably not. That tells you a lot right there. Cleaning franchises spend their advertising dollars where they make their money; off of people like you who want to start their own business.

Territory

Purchasing a territory makes sense if the franchise has a unique service or a well-known brand name, but with janitorial or cleaning companies this is not the case. There are no real brand names among the cleaning franchises. And while there are different systems for cleaning carpets or acoustic tiles none is so unique that it's worth buying a franchise to get it.

On the other hand, territories are a great deal for the people who want to sell you a franchise. You pay up front, so they always make money, even if your business fails. On the other hand, if you succeed, they cannibalize you. They do this by selling a whole slew of new franchises on the outskirts of your territory. These new franchise owners then make most of their sales on the strength of your hard-earned reputation, often times becoming your toughest competition.

Method of Doing Business

Their Method of Doing Business is supposedly the secret that makes each cleaning franchise different from all the rest. The trouble is, there is no one-big secret to this business, just a lot of good basic business techniques and tricks of the trade that you need to know.

Instead of giving you specific, step-by-step instructions on how to succeed in the cleaning business, franchises give you "Mission Statements" and high sounding business philosophy. They pay good money to copywriters and graphic artists to dazzle you with their presentation so you won't notice how little practical information you really get.

In Over Your Head?

Franchises start you out as the owner, manager, and the entire sales force for a small company. Suddenly you find yourself running a business, in a competitive field, without the experience or confidence you would have if you had started from scratch. Their idea seems to be that if your monthly payments to them don't kill you, you might make a go of it. And if you don't, well they got your down payment so they're still ahead of the game.