Many managers believe these companies are in the cleaning business, just as McDonald’s is in the fast-food industry. But nothing could be further from the truth. They are actually in the numbers business. The more times they can sell a janitorial contract, the more money they make.
The following scenario should help explain this.
- Salespeople from the franchise are making cold calls and knocking on doors five days per week.
- When they submit a bid, the price for cleaning the facility is often surprisingly low.
- The only goal of the salesperson is to win the contract.
- Once that is accomplished, they sell the contract to someone who has invested in the franchise. This someone is called the franchisee. The usual fee is three times the monthly gross of the contract. So, if the contract pays $1,000 per month. The franchise pays $3,000.
- In most cases, to pay the franchise, the franchisee must clean the facility for three months for free.
- Once the account is paid for, the customer still pays the franchise cleaning service, which now takes about 20 percent of each check as a “management” fee.
- Very often, once the account is paid for and the management fee deducted, the franchisee finds they are making less than minimum wage.
- Making things worse, often the franchisee must pay for workers’ compensation, employment taxes if employees are hired, business taxes, supplies, and fuel for their cars.
In this scenario, which is all too common, the franchisee realizes they are just not making enough money to service the account. So, what do they do? To make ends meet, they often:
Water down cleaning solutions. This way, they last longer, saving the franchisee some money.
Cut corners. If an area is to be cleaned nightly, the franchisee scales that back to two or three times per week.
Eliminate extra services. Most cleaning contracts stipulate that, for instance, floors are to be burnished or high, and low cleaning is to be performed on a weekly, monthly, or quarterly schedule. These are eliminated.
Walks off the job. When the franchisee realizes there is no way to make money off an account, they may walk off the job. Lawsuits against franchise cleaning services are relatively common, but most of these franchises know how to protect themselves. The franchisee soon realizes they are the victim of an unfortunate business relationship.
But they are not the only victim. The customer is the victim as well. They were hoping to get a satisfactory service at a very enticing monthly service charge.
Instead, they are being short-changed. They are spending a great deal of their time calling the franchise to complain about the service.
But all the franchise will do is re-sell the account to another franchisee. Remember, they are in the numbers business. When this happens, a revolving door of franchisees cleaners is cleaning the facility, and the revolving door starts all over again.
The Secure Clean blog is designed to help building managers keep their facilities cleaner, healthier, and safer, in the most cost effective way possible. To learn more about us, please take a few minutes to explore our website at www.securecleanbsi.com, contact us here or at 888-609-1410.