Disadvantages of buying a cleaning franchise
Not everyone has what it takes to start a business on their own. Even among those who take the first step, most will not have the determination to walk through the journey, to be patient to witness the tree bear fruits. It is the same for a cleaning business.
If you have come this far, you already have the mindset to start and manage a cleaning business of your own. I will assure you that the industry potential only keeps growing. As long as people love to be clean, there will be a need for cleaning. Industry expert Katie Pearse puts it right:
“Cleaning is not a trend, it’s a real necessity, there is such a huge market for cleaning because it’s as common as people getting their oil changed.”
Franchising can look attractive, particularly in this line of work. You would be thinking of it as easy access into an industry with a promise of quick leads. Well, yeah! It has its pluses. And as far as humanity is concerned, good is always accompanied by bad. Here are some reasons why it may not be the best idea to buy into a franchise.
High Initial Cost
The tickets can get hefty! Buying into a well-established brand can cost you good money. The minimum set-up fee for a cleaning business usually starts from $5000. From there onwards, the sky's the limit. If you are thinking in terms of minimum, think again. A business knows its value. If you are going to settle for less, you are better off starting your home-based cleaning service from scratch.
If you have the money for this, maybe then you can consider it. But if you are planning for a loan, do not forget the compounding factor of the interest you will have to pay, regardless of how well you perform.
Other expenses you may need to keep in mind:
-Fixed assets that most probably will not be your own choice
-Attorney fee for contract review
-Grand opening with bonus expenses in the name of promotions
-Payment for employee training
Use their name and keep paying for it. The royalty payment is the amount you will be paying no matter what. Generally, it is a percentage ranging from 5 to 10 percent. Not much?
Imagine you do well, and your business thrives. It means your revenue multiplied. So will your royalty payment. The bigger the growth, the bigger the profits you will have to share.
If not a percentage, some franchises may offer a fixed amount. That may seem like a better offer. But if you face a revenue drop, you will have to find other ways to cover up the expense. You would not want that to sit on top of an already few bad months now, would you?
If these extra expenses do not paint an understanding, franchises usually have a marketing fund that can either be a fixed contribution or a percentage ranges from 1 to 4 percent. What does the calculator say?
Lack of Control
How would you fancy cleaning while your hands are tied? When you sign the contract, you agree to abide by their rules. Failing to do so will acquire fines. As a bonus, your status quo will have to suffer too.
Your business depends on the leads they bring you. If they do an awful job, you will not have other options than wait for things to get better. And that is not a good start for a game with so much potential. Listen to Jim Rohn:
"Either run the day, or the day runs you."
Marketing or advertising will not be up to you. You may have better ideas to get your service across to your audience, but that will be of no use. As long as you operate under them, your creativity will have to sit this one down.
The agreement will also dictate how you operate. From telling you where you should buy the necessary cleaning products(despite you having a supplier with a competitive price) to the working hours, they decide everything. Like me, if you prefer to have the flexibility factor in your pocket, a franchise will give you the exact opposite.
You can provide the best service to your customers and keep them satisfied. But the brand you would have built will not be yours. All your hard work will accumulate goodwill to the franchisor. What about you? Having put your blood and sweat into cleaning your way to success, you will just be handing the fame to your parent company in bulk.
Let me also remind you that you may not be the only franchise. And you have no control over the events that unfold elsewhere. For example, with the current coronavirus outbreak, if anyone associated with your franchise tests positive, the perception of your business can affect too. It sucks. But that is how people think.
Apart from that, if an employee from an outlet complains of low payment, you will be caught in a screw up you had nothing to do with. Having your own business can eliminate such external factors. Points to take home, I would say!
A franchise that has a higher growth potential will be the best choice, of course. However, there is a drawback. Depending on the geographical location you operate and its potential for the brand, you have a chance of finding yourself one among several businesses operating under your brand. If you do not mind sharing leads and revenue potential, you can go ahead. But let me tell you, it can be pretty annoying to lose out like that.
Good luck selling
When you have done and had enough of working in your cleaning franchise, selling the business is the smartest way out. You may even have a potential buyer. But because the franchise is not under your name, you will not have the final say. The evaluation by the parent company will have the final say. Goodbyes are tough in franchising too.
Franchises will offer you an existing brand image but at the cost of the freedom that comes with running your race by yourself, to experiment and grow. I run my own cleaning company that generates a revenue of over $1.1 million a year. If I had to start from scratch, I know how to do it, and will do it better.
My experience and expertise will help you grow your cleaning business with guaranteed returns. Read what my previous clients have to say about my consultation. Get in touch with me for a free strategy session. Let me help you build your company.