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Pros and Cons of a Franchise vs. Company-owned Janitorial Business

When people find out OctoClean is a franchisor, they often have questions about why we chose to go the “franchising route” and what the benefits and drawbacks of hiring directly and franchising are. Before I answer this question, I should say that I have a total of 21 years in the janitorial industry and, during that time, have been a part of both company owned and franchising systems.

As one might guess, one major problem that plagues janitorial companies is high staff turnover. It isn’t uncommon for janitorial staff to leave after only 3 to 6 months on the job. This fact affects both franchising and company-run janitorial firms alike. After you factor all the time, money and effort that went into training that person, this can be a major on-going business expense and its negative effects also extend to the end users (i.e. the people or companies who are having their facilities cleaned.) With new people constantly in and out, it can be difficult to ensure a high-level of quality and consistency – one of the primary things most facility owners are looking for.

One of the main pros of a company owned operation in this situation is that it allows for more flexible staffing. Hiring and firing is easier because employment is at-will and no long-term contracts are involved. Signing or terminating a franchise, on the other hand, is complicated because they are signing a multiple-year agreement and very likely taking on a promissory note to the franchisor. This makes it essential for a franchising system to develop an effective process for vetting prospective franchisees.

However, for the same reason, one of the benefits of franchising is that there is a certain level of staffing consistency. Once signed, the franchisee will work with you for at least 3 to 5 years, if not longer. Since they often directly supervise their cleaning crews or, in many cases, do the cleaning themselves, they are generally able to achieve a higher level of consistency than managers for company owned firms that are coming and going at almost the same rate as their employees. This can be a major benefit to facility owners since this means that the people cleaning their building are more likely to know what they’re doing because the training programs can be more consistent and thorough. The longer a person stays, the more knowledge they gain, adding value to the deliverable.

Another major advantage of franchised companies is that the franchisee is able to buy into a whole network of key support services (e.g. sales, advertising, customer service, and accounting) that allow them to focus more on service-delivery and less on administration.

Becoming part of a franchise can be a bad idea, however, if you are signing with the wrong franchisor. Some franchisors are just trying to make a quick buck and they don’t have systems in place that allow them to attract and develop strong franchise candidates. Their criteria for selecting a franchisee is very low, the training they offer their franchisees is minimal and their profit margins are also very low. Joining a franchise can definitely be a bad idea.

That said, I believe poorly run company-run janitorial firms are worse than poorly run franchises. There is a phenomenon with people, who have “entrepreneurial seizures”; they wake up one day and say to themselves, “How hard can it be to run a (fill-in-the blank; janitorial in this case) business after all?” They have no idea how much work or skill it really takes. Even with the best intentions, they usually burn themselves out within a few months or years. In the end, this negatively impacts themselves and their customers who must work to find someone to replace them when the quality of their service goes down or they leave the business.

Ultimately, though there are advantages and disadvantages to both set ups, a company and its services are only as strong as its leadership and core values. A janitorial firm, whether company owned and operated or franchise owned and operated, that has strong core values and abides by those core values, will excel because it is the essential foundation to any successful business.

By Matthew Stowe http://info.octoclean.com

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