Join GCA for free.  We're working in that direction.

 

 

Bob:

 

What is the GCA?

GCA = Global Cleaners Association

 

Franchises are not in the cleaning business.  They are in the Franchise selling business.  The more the little franchisees fail the better it is for the main franchiser because they can effectively 'resell' that business to other franchisees multiple times before the customer actually gets tired of the revolving franchisee change out door and quits.  Leaving a very dirty building and another customer with a poor, distorted view of us and our industry on the whole.

 

This is probably one of the very few issues where you would want some type of industry regulation.  It would put most of these job mills out of biz quickly.  Sorry but I have no respect for the franchise industry at all, I do feel very sorry for the poor franchisees that get sucked into these losing systems and lose usually their life savings.

 

 

Ok I agree and I disagree.   I feel less and less sorry for these people that buy into these franchises, because in this day and age their is too much information on the internet to get "sucked in".   To me it is sheer laziness, too lazy to investigate these franchises, and too lazy to do the leg work of actually starting a cleaning service, to get the let down's of all the no's.  And it is really sad that these people don't get to feel what we feel when someone says 'Yes."  They just want to take the so called easy route and just make the money.  Instead of putting all that money into buying a franchise, they should take it and put it into advertsing and equipment and do some of the crappy leg work that goes with this industry, do it themselves and make some honest money and make a company that they can take pride in their work, instead of doing half a** work and making us "the ones that do all the back work and take a personal interest in our clients, look bad.

The upside of all this is when we go in after a franchise has made a mess, everything we do looks great to the client. 

My new account whom has gone through the 2 big franchises coverall and janiking is going to see what it means to get his moneys worth now that I'm in there.  Yeah  I'm pumped.  I finally beat the big guy!!!!!   that makes me feel great all day long.

 

 

Melissa, that is because you are viewing this from a personal point of view.

Just like all of the people that post here, we are actually a minority when compared to the 120,000 registered cleaning companies and probably another 50,000 that are off the radar and illegal.

 

Franchises attract the timid and gun shy people that want to own a business but are reluctant,  introverted and just incapable of doing the hard part.  SELLING.

 

The franchise offers the meal deal in a box.  You get customers, you get to run a business in some, limited fashion but you get to avoid all that icky people to people stuff that many of us here thrive on.

 

If I could I would spend all my days selling and interacting with people.  It's my personal goal for 2009 now that my son has agreed to start babysitting the nighttime ops.  Not everyone can/wants to do this and franchises offer an out.

 

It's just a shame how badly they mess with those people once the signature is on the dotted line.

 

If CMM would ever resurrect their Great Debate series, I would love to go head to head with anyone from Coverall or JanPro.

 

 

Well you did open up the conversation matthew

 

I would ask what your franchisor charges for new accounts?

We know going rate is 300%

Where is Octoclean?

 

Also explain some of your Business Development programs

Not talking about cleaning

 

Marketing

Sales

Accounting

Basic quickbooks

Service delivery

Recruiting

Employee retention

Supervision

 

Basic Business systems small business owners need to grow, unfortunately franchising in the janitorial market has become little more then subcontracting

 

I have to say though my experience with janiking was positive overall, but i was alot younger with less expectations then today but positive. I learned alot from them

 

 

 

We can debate about the franchise companies all we want, but in the end  there are companies that will hire them based on cost or because they sell well.  Coverall is active in my area.  The regional franchisor does a good job of sells jobs based on price and, in some cases, charging a hefty fee for a first time comprehensive cleaning.  For the ongoing, regular work, I have seen cases where I doubt if the franchisee can make minimum wage after Coverall charges them for payroll processing, billing, collections, supplies and equipment.

 

While I think someone would have to be nuts to buy a job by becoming a Coverall franchisee based on what I know, I can't worry about that.  When I bid on a job, it is based on the price I need to provide high quality service using the right equipment and cleaning solutions and it includes the margin I need for profit and overhead.  My price is usually not the cheapest price so, if that is the only issue, my proposal becomes just an exercise in kicking tires.  On the other hand, if my proposal resulted from a referral from any of my several referral sources, I usually don't have to worry so much about pricing.  I probably have an exclusive on the job anyway but I still need to make a good impression on my prospective customer.  We do a heck of a lot of VCT jobs that we obtain through a great referral network.

 

The bottom line for me is to do well at what we do.  Be very professional on sales calls.  Educate the prospect about their cleaning needs and how we can fulfill them.  Don't lower my pricing on cleaning or VCT jobs to try to compete with the cutrate competition.  On the management side, hire well and pay well to minimize turnover and purchase professional equipment and supplies carefully to manage that expense.  

 

I can't run someone else's business so if I try to manage mine to build a good reputation, maybe I will outlast some of the competition who run their business differently.  Truthfully, I don't know a lot about my competition (some may consider that a fault) because my focus is on what I do.  When I have an opportunity to bid against a company who cuts rates, I try to get the prospect to try to relate the dollars to the amount of work to be done.  If they can't do that and they focus solely on price, they will probably be changing cleaning companies soon.

 

There is just too much profitable work out there (and there still is if you look for it) to worry about the franchise companies.  Their staying power is based on their ability to selll and resell franchises as someone else mentioned. So, I'll do what i do and they can do what they do.  As long as I have referral sources and there are other prospects to call on, I think I'll survive and do well and so will you.

Shane, thanks for the inquiry. OctoClean is a family-owned and operated company out of Riverside and Irvine California(about 45 minutes from LA).

You have done your homework on the "going rate" for accounts but with most it is more like 500%. Not like it matters with the other guys because the franchisee never gets to pay it off with the account revenue anyway (Can you say bankrupcy court). We do charge for additional accounts above and beyond the purchased package. When we were employee-run we had to go out and get our own accounts to grow and that costs money. If a franchisee does not want to learn or be coached through the sales process then they should incur costs for additional accounts. If they do fantastic work and gain referrals they will get the business and yes they are trained on how to gain referrals. Before we get too far ahead of ourselves, the main problem with "the other" franchise companies charging for accounts is what they are charging for. As you all have said above they are under bid. Why are they under bidding? They are under bidding because the people representing the franchise companies are generally "sales people" and not contractors with sales skills. I could tell you some laughable stories and I am sure you could too.

 

Training:

 

This organization was founded by entreprenuers not business people and investors. That means that I as well as our CEO and President cleaned toilets night in and night out for at least a decade. Our training is designed to assist franchise owners where they are in the path of business ownership. As a new franchisee comes in for training they are by in large employee/employer minded. That is our first and most important challenge. The first round of training gives the person the opportunity to get the whole "I am doing this feeling" to sink in. Guess what? That means that some people get wet feet and leave. We give them every dollar back, no judgments.  We do give tham a full  briefing on the franchise agreement they signed (Assumming that they did not want to  read a 100 page legaleaze agreement). If they want to go, see you later. They learn about basic accounting and all of the support systems we offer. They then go into a practical training course that lasts three weeks. They learn cleaning yes, but they also learn implementation of accounts (Jim Harris would be proud). There is too much to list to be frank. At  the point that they graduate from OC University they are prepared to attack a building with both professionalism and experience.

 

HR courses are offered through a local HR consultant so they understand the importnace of being great employers. All of their employees are trained by us and must clear back ground checks etc. Each of our support centers has a "Resource Room" that can be used for them to do interviews of employees,  check references, create building implementation documents etc. All of that and they have a full time trainer available to them at no additional cost.

 

With all of the training and support they are still people and that means they have their own minds. Training and support is always there but not everyone will take it. Being a franchisor is a balance between empathy and expectation. We cannot be taken advantage of but we do not take advantage either. We perform weekly sales course and assign a coach to each business owner to assist in the "oh my god" stages of sales. So why don't the others do this I ask myself? Culture is the first answer that comes to mind. Fear is the other. What happens if we train every franchisee to be a great business owner? My answer, we transform the janitorial industry. Their answer, competition. I know that this doesn't answer all of your questions but if you got this far in the reply I would be surprised anyway. I could go forever...

I posted this in another forum comment but thought I'd repost here considering it's similar considering I'm a Jani King frnachise owner.

 

You may have issues with Jani King about pricing but I don't (at least in my experience) see how Jani King is low balling the prices on accounts. This of course is possible depending on the Jani King corporate reps in what ever area you are in but normally I've heard more about over pricing than under.

 

I personally take a tremendous amount of pride in the service that I provide to my clients and with in my local region Jani King does as well. I and also Jani King does not bash the independents or even other franchises, it is bad business and can have a reverse effect.

 

There are good and bad in both situations, the quality of service rather it be a franchise or independent is soley reliant on the business owner. How one conducts their business is the key to success and has no bearing on how their competitors run theirs.

 

I've gained clients because of the Jani King name but I've also missed out on some, it works both ways. Business owners have different views, some prefer the corporate aspect because of insurance, a fall back in case the franchise owner doesn't perform and various other reasons while some  prefer an independent.

 

Jani King is certainly not perfect, I don't agree with some of their policies and or procedures but I was certainly aware of these before buying my franchise.

 

I have a tremendous investement in my business just as every one does. If it fails or succeeds will not be because of Jani King nor will it be because of my competitors; it will be due to my own performance or lack of.

 

There is enough business for both sides but it doesn't just come knocking, it takes a good marketing plan, hard work, great service to your clients, persistence and a desire to succeed.

 

I don't rely on Jani King to run my business;I perform as to what I beleive is best for my business and my clients. Jani King does assist me with new accounts but I also do my own marketing, knocking on doors etc. I have numerous accounts that I've gained on my own with out Jani Kings assistance and recently signed a $6800.00 per month account.

 

I started 3 years ago with one account at $235.00 per month, I now do over $35,000 and about half of this is due to my own hard work.

 

The point being as stated above is that it can be done but if you focus on what your competitors are doing rather than what you should be doing then you'll not get very far.

 

Sorry, didn't mean to ramble on..lol

 

ps. I've NEVER lost an account due to bad service.

Jerry,

 

You may be the exception to the rule.  However, friends and I have discussed this quite often, How these companies can low bid that low.  You have payroll and you ought to be paying minimum wage, I hope plus supplies, you just cannot make money for yourself.  Can you explain it?

How do you pay minimum wage after the low ball bidding, the franchise fees, insurance, supplies, equipment and still be able to take any money for yourself.

 

Sorry Jerry but I'm not buying it.

Richard, perhaps my profit margin maybe some what lower than an independent (per account) because of my franchise fees I pay but I'm still profitable and make a decent living.

 

As an independent you should have similar expenses as I do with the exception of royalty fees. You still have insurance, marketing, advertising, accounting, payroll etc. I do pay a very hefty fee when Jani King offers me an account, this of course is a major disadvantage but it's temporary of sorts. When I gain my own accounts rather it's from referalls or marketing I don't pay these fees except for royalty and insurance etc.

 

I don't have to accept any account Jani King offers, the ones I do I always look at the bid sheet, account analysis and all pertinent details and then make a decision.

 

I also do my own share of one time cleans, strip and wax etc, these are not subject to the finders fee Jani king would charge if they offered me such type of work. They do and as recently they called me for some one time Section H housing cleans, 5 apartments with various repairs and cleans came to a total of 2200.00. I paid Jani King 10% for a finders fee for this work, less my labor expenses, taxes etc I still made a very decent profit.

 

One great benefit that helps me as a Jani King franchise owner is customer billing, statements etc. I don't worry about it, don't send out statements, don't hassle with clients who are behind and have to fight for the monthly contract amount.

 

What this does for me is that it frees up my time, and I value my time. It's money, and the less I have to spend on issues such as billing the more it allows me to focus on my clients and generating new revenue.

 

Owning a franchise is not right for everyone, I do not regret my decision and certainly do not need anyone to feel sorry for me because I'm a franchise owner. (No disrespect intended)

 

 

Jerry,

 

I wasn't feeling sorry for , but just asking to get a better picture of why companies low ball and still make a profit.  I am just curious to know.

Personal Experience being a Franchise Owner. I won't say who but you know who you are. I cleaned a trucking company in So. CA as a franchise owner. I have to say for the first year all was OK. I had to do the majority of the cleaning and Day portering myself at first as I was not paid for anything the first 2.5 months. Not complaining I knew it up front and dealt with it. But that is the rub...this is how the "system" makes the main portion of money up front. I then had to "finaince" the rest of the payment.

 

I could clean well as I had done it for many years. This was not the problem. The work was good. To make a long story shorter the fees went up beyond what I thought was fair right before my 3rd year was to start. I complained...about alot of things. Next thing I'm told is I'm losing the account. Customer is not happy they tell me. I check with customer. Customer says nothing is wrong. I get the info on what said customer is paying. I tell customer I can do it for X amount less. Both I and the customers corporate office get a letter from Fanchisor attorney. Corp says don't sign with Franchisors "employee". So I lose franshise (even though they are happy), still owe them money, declared Bankruptcy, Franchisor loses account anyway. Living the dream my butt!

 

The question I asked to an attorney was...didn't I pay for this account? How can they just arbitrarly take it away? What did i really pay for? A job! I never paid workers comp to my employees, I paid cash (no payroll taxes). And as John Stossel says....give me a break. Did the Franchisor ever ask for my payroll runs, work comp cert, any info wanting to know i was running a "legal" business? NO WAY JOSE. All of you posting on here now know why franchisors can underbid. When no Work Comp or Payroll Taxes are paid how much less can it be done for....A lot I guess.

 

What really irked me was the supplies. I had to buy them from the franchisor. Private labeled stuff (I knew some Waxie reps) that I could simply buy from Waxie for 25% less. IT'S ALL A PROFESSIONAL SCAM. Don't listen to any marketing BS. Because that is all it is.

 

Accounts get "resold" to new franchisees at any opportunity. That is how they make money. I knew franchisees with the company, that I signed on with, who had different parts of the same building with different franchisees. I have finally figured it out....they sell "jobs", cash paying jobs, minus the set up and ongoing fees lining their pockets.

 

I now understand the "employee-run" statements. Franchising to aviod work comp premiums, payroll taxes, social security payments, etc saves the franchisors a LOT of money as they don't really have any employees to run. They are employees when it's time to fire them but franchisees when it comes to saving money. I bought an account and really had zero control over my future. It's sad that this is being done to hard working people.

 

I have an idea. Put your money where your mouth is and put all the franchisees that have lost their jobs names and phone numbers on here and hand that out to prospective new victims....you'll get zero new sign ups when the truth is told!