This Entrepreneur’s Franchise 500 list features 10 commercial cleaning franchises that have regularly claimed a spot in the top 200.
As a niche ripe for franchising, the industry has experienced indicators that seem to promise a positive uptick of growth:
- a revenue of $51 billion in 2015, despite falling 5.1% during 2009-2010
- commercial cleaning services contributing to nearly 31% of industry revenue
- An increase in demand for residential housecleaning, especially in urban and suburban households with two incomes
Many commercial, residential and specialty cleaning services regularly make the Fastest Growing Franchises list, year after year, making the point that they’re not a flash in the pan.
But the cleaning franchising community in US and North America has been rocked with several lawsuits since the beginning of the 2010s and, in particular, the 2012 scandal at Coverall has divided its franchisees and employees right down the middle.
While many attest to the entrepreneurial spirit, flexible work environment and the chance to be their own boss under the structure of a franchise as perks of working for a cleaning service, there are others who have become prey to a whole host of franchise issues, including:
- the miscalculation of “employees” as “franchisees”,
- non-responsive field and operations managers,
- a lack of transparency in the franchising contracts and
- micromanagement and a lack of benefits
How it Works Today
Why Cleaning Services is So Lucrative
For potential franchisees, cleaning services are a great way to set up a business that has a tried-and-true model, a recognizable brand and ongoing client accounts.
Commercial and residential cleaning services are especially attractive because they require a low cost of entry. But, besides this, franchisees feel the business is more accessible because it doesn’t require them to have a professional designation, degree or background.
Commercial and residential cleaning companies are well-known within the community and often have ongoing accounts and clients that use them on a regular basis, those who are looking to hire seasonally (during the winter months to compensate for salt, slush and snow or during the spring for a massive spring cleaning), or those who are looking to focus their efforts on just one aspect of cleanliness (ex. steaming & shampooing carpets twice a year).
Yet – you knew there would be a caveat, didn’t you? -- these very pros are its Achilles’ heel.
A low cost of entry certainly motivates more individuals to consider making the upfront investment. But a money barrier does more than simply cut people out: it acts as a self-sorter, a litmus test that seems to implicitly say, “Serious Candidates Only Need Apply”.
Right away, this mitigates a whole set of franchise issues that might come up with non-compliant franchisees.
And what does “serious candidates” look like? Potential franchisees may have the money to set up but that doesn’t guarantee they have the mindset and business acumen to sustain. The truth is that commercial cleaning and maid-service companies take a lot of time to establish their presence and quality of service in the market.
"It's not the hard costs that shock people," Petranick says. "It's the fact that it could take two to three months to find their first client. They need to learn how to be a salesperson. It takes a while. The first three to six months you're introducing yourself to the market, and you have to prove that you can provide quality care. Then the market responds, and business picks up."
While they don’t need a professional degree, having a sense of what it takes to run a business is integral to running a cleaning services franchise. It’s not simply because the work is physically-demanding and will require a 110%. It’s also because that’s simply how the business cycle runs: slow to start and an uptick (see our Sigmoid Curve here!) over time, with hard work and consistency.
The expectations of franchisees (especially those not used to the ups and downs of running a business) are simply not aligned with this reality of the market: that the cash is simply not going to get flowing from the get-go.
Many franchisees will end up pinning these realities on the following reasons:
- Franchisees not receiving accounts as promised
- Receiving underbid or unprofitable accounts
- Having accounts taken from them (seemingly without any reason) and given to other franchisees
Now, it’s important to note that these are not excuses -- rather, they are perspectives. They’re not untrue and, yet, they don’t entirely showcase what’s really going on. Nor do they offer any solutions for how it can be fixed.
Looking at the these franchise issues, however, it’s easy to see how each one of these three instances could be responded to. Commercial franchisors have reasoned:
- They don’t want to overwhelm new franchisees with multiple accounts right away. Instead, the prefer a slower process of escalation as franchisees get comfortable with the work, roles and expectations.
- It’s a tight and crowded market and it takes time to establish customer experience. This may mean working for a smaller amount at first, while -- but this is not new, it’s simply a reality of business and applies to any model, from franchises, to freelancers, to startups.
- The reason is either a lack of compliance, consistent underperforming or a loss in revenue overtime. It’s up to the franchisor to communicate these specific reasons -- but, rest assured, it’s not without reason.
A Variety in Franchisee Experience
Let’s take a look at the experiences and commentaries of the franchisees of two cleaning franchises: Vanguard and Molly Maids.
Source: Indeed.com & Glassdoor.ca
A POSITIVE VANGUARD EXPERIENCE
"Good people to work with, flexibility and trust being qualities most evident. Family run business translates into a family like environment. Legitmately very much within what is promised to franchisees with every legal angle smartly covered. Progressive and In depth training, mentoring and certification program available for those who are serious about growing their business"
CONS FOR WORKING WITH VANGUARD
- - Micromanagement
- - No set policies
- - One person handling everything
Noteworthy: while the “pros” have everything to do with a positive business environment and room for growth, the “negatives” are based on a lack of communication. Having these sorts of “issues” are a good thing because they’re so easily solved with tools that enhance communication across networks.
A POSITIVE MOLLY MAIDS REVIEW
Noteworthy: “The most enjoyable part of the job was being able to take pride in what I was doing by helping my customers and seeing the excitement on their faces when the came home to a sparkling clean home”.
In the end, it’s on the franchisee to take ownership of their jobs. It’s on the franchisor to provide support, training and empowerment that encourages that level of personal investment and pride.
A DISGRUNTLED MOLLY MAIDS EMPLOYEE
Noteworthy: the employee was a route assistant rather than a franchisee. Furthermore, the employees had no further stake or personal investment. While this may differ from a franchisee’s sense of personal investment, there should still be a sense of “What’s In It For Me?” for employees. It’s also interesting to note that the issues outline once again don’t have to do with the business model but, rather, are pain points felt across the board by otherwise disengaged employees.
Think about it: could you supplant this employee’s concerns -- namely, that “management is terrible” and that “they do not listen to concerns of their employees” -- in another mismanaged workplace?
The answer is a resounding, “yes!” And it’s only further underscored by another Team Leader’s experience below:
Noteworthy: the variance in worker experience has a lot to do with interpersonal interactions and relationships, one-on-one, between the franchisees and employees. A good and tactful franchisee who is well-trained to interact and support his or her employees can create a truly positive experience. And this leads back to the franchisor’s willingness to train and support as well as create a chain of command that is accountable, transparent and role-based.
A Variety in Customer Experience
It’s not surprising that a variance in employee and franchisee experience would spell a consistent inconsistency in the way customers experience the service.
In the negative review, the issue is a clear lack of process on part of the franchisee. It doesn’t align with the customer’s expectations of similar companies.
Here, the franchise owner risks losing an account not only because of her lack of intake process -- quotes, for the most part, should be automated and easily obtained -- but also because she has extended the communication process, without providing any actual information or transparency.
What the customer experiences is poor communication, oblique reasoning and inconsistent customer service leaves with an overall bad feeling.
Blurring the Lines
The 2012 Coverall scandal required the company to pay back all franchisee fees -- a 100 franchisees, overall, and mostly new immigrants -- because the court ruled that the company had “misclassified” its employees as franchisees.
During the Awuah v Coverall North America Inc. trial, the defence of franchisors was as follows:
"Coverall still believes its Franchised Owners are independent business owners and not employees; as such, they operate their commercial cleaning service businesses, maintaining accounts and hiring independently."
It’s certainly a thin line but is it illegal? In this particular case, perhaps. But the precedent set by the cleaning services industry in general is neither surprising nor new to franchisors in general. One commenter said:
How it Can Work Better
Introducing a Method of Monitoring
For product-based businesses, there is a transaction that involves a purchase. That purchase usually gets logged into a POS or point-of-sale system.
From here, it’s easy to monitor revenue, drop-offs and even marketing efforts in conjunction with revenue earned. Franchisees can quickly and easily pull out the most important numbers and franchisors can identify under-performing or top-performing franchisees quickly.
It’s not only about tracking these numbers but using them to create an incentive for franchisees to perform well and push their business to be the best it can be. Franchisors can share top-performing franchisees with others as inspiration or a benchmark and lay out some tips for arriving at that point.
Franchisors and executive support managers can use these numbers to further define where there needs to be ongoing training or better onboarding processes.
Vetting the Right Candidates
We’ll leave it to an experienced franchisee to explain two things: why cleaning services is so lucrative and, additionally, why, at the end of the day, it doesn’t really matter if it’s fast food format or cleaning services -- business principles remain the same across industries:
Many of the points that he states are integral to the success of the franchisee. They need to have the self awareness to understand if they do or do not have these aspects and this attitude already.
However, barring any kind of self-evaluation, it’s up to the franchisors to have a thorough vetting process -- one that is not only made up of up-front investment as a bar to entry but, rather, a process that will evaluate the business acumen and readiness of a candidate for the long-term.
The more aggressive and conservative franchisors can be in this respect, the better candidates they can attract -- and retain!
Leveling Up Ownership
Another great idea within the commercial and residential cleaning services industry comes from the way you might train a child to ride a bike: with training wheels, a little bit at a time.
Confused? Stay with us here.
The idea with “leveling up” or escalating ownership one level at a time is to fully train franchisees but don’t throw them in the deep end just yet.
Several successful cleaning franchisees with a low turnover choose, instead, to have franchisees engage in one or two “low performing” accounts so they can get the hang of operations and then take on greater responsibilities, or better accounts, as they graduate from level to level.
Depending on what specific cleaning service they provide, franchisors may also choose to segment the training based on function: once a franchisee has mastered one aspect, for example, they can move on to another which calls for both their initial training and the new experience.
Creating Purpose with Process
Molly Maids has been marked as one of the best maid services to work for -- by both franchisees who own a stake and employees who work for the franchise brand.
Many workers attribute the ease of working at Molly Maids to the process for cleaning that their training leaves them with. To their credit, the franchise brand has developed a process for every scenario of cleaning that lives within their Operations Manuals.
These can be a collection of videos, written instructions and training cards that employees can refer back to but, regardless, having a set process helps to make their work progress more efficiently.
In a very specific sense, this means that employees can complete more houses in one day as their work is thorough, not shoddy, but having a process they can rely on means they’re moving quickly through their work.
In a more general sense, having a process for a commercial or residential cleaning service means that franchisors have taken the time to know the business. They understand what franchisees and employees will most likely encounter through the day.
It also means that they’re able to distinguish themselves in an otherwise crowded market. Every little bit helps and having a “process” is not just an idea that contributes to efficiency, it’s also about expressing that as a uniquely competitive edge to customers.
Compliance is a Two-Way Street
“The Ops. guy [plays] a role between peacemaker and villain...never a protagonist”
So says a Glassdoor reviewer who has been working with Vanguard for five years and has gone from employee to field manager.
This sort of divide between franchisors and franchisees is, unfortunately, all too common and yet, fortunately, is easily addressed.
It all begins with an understanding and ethic that compliance is a two-way street. What this report really reveals is not the state of an industry right now, but the opportunity for improved franchise communications to affect the bottom line of every franchise brand.
So -- carpe diem! Seize the opportunity to introduce change!
With statistics from Cleaning Industry Analysis 2017 - Cost & Trends
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