Overview of Cleaning services franchise Industry

Cleaning services franchise Industry Overview The cleaning industry is one of the most diverse and fragmented industries in all of business. Franchise companies within the industry make sure the buildings or, in some cases, the factories, that they service are clean, sanitary and in good condition. A number of franchises in this industry may also perform restoration after disasters, or minor repairs. Industry specializations are listed below. Franchises tend to offer services in one or more of these areas: Janitorial Maid service / housekeeping Carpet / upholstery cleaning Dry cleaning / fabric care Disaster restoration Junk removal In addition to the diversity of service areas, cleaning franchises operate across multiple sectors of commerce, including: Commercial: office buildings, business facilities, stages, event centers Educational: schools, colleges, universities Government: government agencies and offices Hospitality: hotels, restaurants Industrial: factories, warehouses Medical: hospitals, medical centers Retail: retail stores, shopping malls Residential: houses, apartments, condos According to a Jan-Pro report, commercial cleaning generates total sales of an estimated $ 155 billion globally each year. Often maids and housekeepers are most often associated with the cleaning industry though, according to Statista, janitors and cleaners in the commercial sector actually make up the largest percentage of employees in the industry. Janitors and cleaners are responsible for the upkeep of corporate buildings and dwellings, as well as elementary and secondary schools. The US Department of Labor expects employment in this segment to grow 12% from 2012 to 2022. Most of the new jobs in this area are expected to come from health care related facilities. The market for other segments of the industry also looks promising with maids and housekeepers stable and growing (13% until 2022). Same for laundry and dry cleaners (10%). Findings of a Statista report found that providing exceptional customer service is the primary focus of cleaning service owners looking to grow their businesses. Unsurprising considering the fixed number of cleaning options available to people and businesses. The following graphic reveals eight global cleaning franchises and their estimated number of units worldwide as of early 2015. Fragmentation within the industry is apparent considering the fact that fast food franchise leaders have well over 30,000 units. Competition thus not only includes other franchises but also other non-franchised businesses and independent cleaners. Eco-Friendly Processes Continue to be A Force As we said in our 2010 Cleaning Franchise Industry Report, green cleaning is no longer a trend, but a way of doing business. Using greener cleaning methods, “helps reduce pollution to our waterways and the air and it minimizes your impact on ozone depletion and global climate change with fewer smog-producing chemicals,” says fresh living expert Sara Snow. As repeatedly demonstrated, the benefits of green cleaning don't just extend themselves to the environment. The average American spends 90% of their time indoors. Thus, having safely cleaned surfaces and upholstery is essential to maintaining health, especially when you realize 1 in 5 Americans suffer from allergies and over 1 billion colds are reported annually in the United States. In addition, some cleaning sprays have been linked to an increased risk of asthma, the most common chronic illness and the leading cause of school absences due to chronic illness in the country. In response, cleaning franchises have been careful to accommodate the desires of customers when it comes to green cleaning. For example, Chem-Dry's Hot Carbonating Extraction (HCE) cleaning process recently underwent testing to gauge its effectiveness. Researchers found the HCE cleaning method removed an average of 98.1% of common household allergens from carpets and upholstery. When the HCE process was combined with their sanitizer, it was also found to remove an average of 89% of the airborne bacteria in the test home. The primary cleaning solution Chem-Dry uses is green-certified and does not contain any detergents or harsh chemicals. Emerging Cleaning Franchise Segment: Light Environmental Services “The light environmental service market is highly fragmented, but experiencing tremendous growth,” says Kevin Drudge, Vice President of AdvantaClean. While light environmental services franchises perform similar tasks to restoration franchises, it is important to indicate that they are two different areas. Restoration franchises perform the more intensive restoration, remodeling or fire damage work, while franchises in this industry perform services such as mold removal, duct cleaning, and moderate water damage services. "One of the biggest differences between us and your typical restoration company is that most of the competition is used to process claims for insurance companies, not identify issues created by non-covered building failures and catastrophes, and solve them accordingly," according to Drudge . “The restoration competitors are really more like general contractors. We actually get work from the restoration companies who will sub-contract our franchisees to handle smaller jobs. ” The industrial boom is a major growth generator that has led to a number of buildings and properties now requiring maintenance for structural and health reasons. “Properties are one of the largest investments people make and they pay to protect those investments,” says Drudge. The push for greater energy efficiency is also a reason for segment growth. Investing in a Cleaning Franchise Below is an overview of a limited number of topics to consider when buying a cleaning franchise, including a summary of costs. Please note: the commissions and fees illustrated in this report are some of the most common and not a complete listing. All figures come from the Franchise Disclosure Document (FDD) of each franchise dated 2014. Please review the FDD of a franchise for all of the commissions and fees related to investing in that particular franchise. Advantages of a Franchise vs. Independent Operation Independent operators make up a large portion of the cleaning population, especially when it comes to house cleaners. Although there are low entry barriers, there are several advantages cleaning industry franchisees have over their independent counterparts. Below is a partial list of the top benefits cleaning franchises can offer: Brand awareness Training Marketing assistance Experienced support Some cleaning franchises even go a step further and offer options such as: Customer scheduling assistance Business insurance Bookkeeping assistance Negotiated price terms with suppliers Who's In Charge?Although franchisees must supervise their franchise operation directly, many cleaning franchises do explicitly allow franchisees to share responsibility with a manager or a management team due to work occurring at different remote locations. In this case, selected manager (s) would be subject to the approval of the franchisor by completing the same training as the franchisee, as well as signing the same non-disclosure and confidentiality agreements. In some cases, like Jani-King, the franchisor may want the additional supervisor (s) to have business equity in the franchise so there is a stake in the success of the business, thus encouraging high performance. Special Regulations Laws and regulations vary widely depending on where the individual franchisee will do business. In addition to common business laws, sanitation laws and OSHA (Occupational Safety and Health Act) regulations, a couple of rules cleaning franchisees must make sure they abide by. A large component of these laws concerns chemicals and waste disposal. Franchisees are strongly advised to consult a local advisor to determine all laws and regulations that are applicable to their situation. Initial Investment The opening costs for a cleaning franchisee can depend on many factors, including but not limited to: the business system and execution requirements, the size of the territory the franchisee desires, whether the franchise is a qualifying military veteran, and more. Cleaning franchises often involve reduced costs for investors compared to many other franchise industries because of the mobile nature of the business, permitting franchisees to run the business out of their home instead of a dedicated business space. The initial investment for cleaning franchises can vary between franchise concepts and within a franchise system itself. The following graphic demonstrates, by comparison, initial costs associated with opening one of the 15 sample franchises presented. * Maximum estimate can increase by $ 489 per 1,000 over maximum population, plus any real estate costs incurred Initial costs associated with opening a franchise include the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening advertising and marketing costs, and more. Here are some common expenses included in the initial cleaning franchise investment: Equipment Supplies Marketing materials Administrative materials Training manuals Vehicle costs (if applicable) Real estate costs (if applicable) Most beginning expenses are similar to an independent cleaning business except for one — the franchise fee. This fee typically covers permissions for the franchisee to use the franchisor's patents and trademarks. It can also cover a portion of the costs for initial support functions such as training. Ongoing Fees Throughout the length of the agreement there are costs for being a part of the franchisor's business system.