Episode 200 – What You Need to Know About Setting up a Janitorial…
What You Need to Know About Setting up a Janitorial Franchise
Episode 200 Cynthia Mejia Janco Janitorial
If you are one of the forward thinking cleaning business owners that want to know how to set up a janitorial franchise you are not alone. Cynthia’s company cleans over 4 million sqft of commercial property. With her experience and subsequent success she has received requests for franchise opportunities.
In today’s episode, Mike shares his wisdom on franchising a business with Cleaning Nation and give Cynthia the tools she needs to decide if she should move forward. First things first there are a couple of ways to franchise your business. You must decide which model best suits your needs/desire first.
Standard Franchise Model
A Franchisee would give you $30-$40k (or whatever fee you desire) up front for your janitorial franchise. In exchange you give them operations manuals, training, use of your trademark and support. These things would ideally give them the tools to be a successful cleaning business.
Once they were set up, they would give between 5-10% of their revenue per month in perpetuity. Some of that money would go to you as the Franchisor and some would go towards a marketing budget. You would then pool that marketing budget to benefit all of your franchisees.
RESOURCE ALERT: Check out our episode with David Luke, owner of Two Maids and a Mop
Cleaning Industry Variation Model
In this model, you would take a much smaller upfront amount. Closer to $5000 for some training and you would “give” your franchisees small accounts. You would be responsible for marketing, billing and finding new accounts to give to your franchisees. Your franchisees would handle the cleaning and scheduling. You as the franchisor would keep 20% and they would keep 80%.
RESOURCE ALERT: To learn more about this model check out this episode with Stephen Coade
Cynthia was interested in trying out a standard janitorial franchise with just one franchisee and seeing how it went. Unfortunately, it’s not that simple.
Franchising has a fairly well regulated legal structure. It’s not as simple as “Give me money and I will lend you my name and handbook”.
The process of setting up a janitorial franchise is actually pretty involved and may not be financially worth while for only 1 franchisee. You want to start with an agency that all they do is set up franchises. They will help you walk through the legal paperwork to become qualified as a franchisor. It’s safe to assume that paperwork may cost you upwards of $30-$50,000.
KEY POINT: Calculate the start up cost before moving forward
Next, there’s the systems part. You are going to be taking a lot of money from someone up front. You want to be able to look them in the eye and say ” I have done this, I have repeated it and as long as you do what I am going to tell you to do, you will be successful.”
In order to be able to do that, first open 2-3 company owned stores. Put them in different areas and go through the process of getting them up and running successfully. Document what you do and the systems you use thoroughly. You could even have your first “franchisee” manage one of your satellite locations.
RESOURCE ALERT: Click HERE to learn more about creating systems
But, if you have a ton of money and are totally in to starting a legitimate franchise there are some other considerations to make. Just like when you move from cleaning to running a business, you learn it’s a totally different set of skills. Owning a cleaning business is very different than selling a janitorial franchise.
A franchisor’s job is to attract clients, create systems and always be on top of giving the tools to the franchisees. It’s your responsibility to make sure you do everything you can to help your franchisees have success. If you aren’t confident you can deliver, then you have no business taking anyone’s money for a janitorial franchise!
FUN FACT: 100 is the magic number
Feedback from the many franchises Mike has dealt with, they have all said 100 is the magic number. It’s hard to make money with only 5 or 10 franchisees. If you only have 1 franchisee you’re doing all the work and giving all the support for very little return.
For example, if your janitorial franchise makes $200k the first year (which would be incredible), you only get 5% that’s only 10k for all your work! But when you have 100 franchisees, you’re doing all the same work, with a slight increase in amount, for $500,000.
Long story short it would be a losing proposition to only have a few franchisees or grow your janitorial franchise slowly.
Finally Cynthia shares her incredible wisdom with Cleaning Nation in the…
Best advice you’ve received either personally or professionally?
What’s the biggest mistake you’ve made in the cleaning business we can all learn from?
What one thing Cleaning Nation can do today to improve their lives or their business?
Never underestimate the power of relationships.