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Franchising Concept Consideration Post-COVID-19

As the coronavirus continues its grip on the global economy, nations are working hard to discover new pathways toward re-opening businesses safely, getting people back to work, and jump-starting their local markets. The months without work and steady income have caused individual stress, harmed families, and cast a large shadow of doubt on what the financial future holds. People are looking for other ways to not only survive financially but thrive.

If you were among the millions of people laid off or furloughed, you might be considering a change in profession or thinking about going into business for yourself. Though the latter seems like an impossible dream right now, you may be surprised by the options available in franchising. In a robust and healthy economy, there are thousands of different concepts to consider. From pizza places to home care to travel services to ninja gyms – there is no shortage of ideas or innovation under franchising’s enormous umbrella. Amidst a global pandemic, there are still substantial franchising opportunities to consider. These franchises are not only surviving today but projected to grow tomorrow.

This pandemic has shined a light on which industries we need, deemed as essential, and those that are more of a luxury. Both are necessary for a healthy economy, but when global events take place, essential services are typically the last to be affected. Many of the “essential services” concepts don’t grab headlines or make people stand up and take notice. Commercial cleaning is one such area. Cleaning offices and workspaces is not sexy, but you can take it to the bank, especially during times like these. The people who dutifully clean desks, conference tables, break rooms, hotel lobbies, and houses of worship certainly aren’t on magazine covers, but they are among our new class of working heroes, and they are not going anywhere anytime soon.

In 2007-08, we learned that commercial cleaning is recession-resistant. Today, we are learning that commercial cleaning is growing by demand, and all public spaces, whether a private business, school, religious center, or restaurant, are nearly required to put sanitation and disinfection at the very top of their operational plan and budget. That relative assurance of demand is attractive to those entering or already in franchising.  But the real key that keeps our industry an ongoing safe bet is the master franchise system.

The benefits of franchising overall are well known, but the master franchise system seems to be the perfect version of franchising for several industries, including commercial cleaning. Master franchising allows companies additional levels of support, expertise, and structure. More specifically, master franchising has three key elements that strengthen a franchise:

  1. Quick Growth.

Master franchising, of course, has three levels.  The corporate franchisor sits above the master franchisees, who typically occupy a city, territory, or region, as well as the unit franchisees, who run their businesses supported by their local master franchisee. Master Franchise Owners operate their business while receiving support, guidance, and training from the corporate office.

Each master’s success depends on sustainable growth, as well as recruiting new unit franchisees and helping them grow their independent businesses. Due to the top level of support from the corporate office, masters can focus on helping the unit franchisees’ businesses growth and executing the day-to-day aspects. When you replicate that over three, or twenty, or fifty masters, the overall brand can grow faster than the typical franchise.

  1. Revenue Streams

One of the best kept secrets about franchising is that although there are hundreds of variations within dozens of industries, they all utilize the franchise model because of the financial rewards that franchising affords. In a regular franchise, the franchisee joins the brand, opens one or multiple locations, and hopefully enjoys success running their business in that particular industry.

The three-tiered model allows those buying in at the master level to participate in the franchising aspect – and thus the additional revenue streams – of the business. A master franchisee becomes part of a pseudo-secret society in which he or she runs their business, of course, but also becomes a franchisor themselves, thus growing their business through the sale of unit franchises too, which adds to their revenue streams.

  1. Division of Talent

The structure of master franchising might appear to add a level of complexity, and in some ways, it does. But what it also allows for is each level – unit franchisee, master franchisee, and the corporate franchisor – to focus on different aspects of the business.

Many people wanting to go into business for themselves are attracted to the unit franchise level. For a commercial cleaning franchise fee of under $50K, the unit franchisee can simply focus on managing their cleaning business, staffing their company, learning how to use the different tools, chemicals, and equipment, and keeping their clients happy. The master focuses on the sales and marketing of new clients to unit owners, billing, and collections of the unit’s customers and any daytime customer service issues that may arise.

These two levels focus on cleaning and clients. The corporate office focuses on the overall business, understanding the industry trends, investing in technological improvements, negotiating national vendor discount programs, and finding national and regional clients that a local cleaning company would not usually be able to land. In general, the home office supports the system and provides strategies, methods, and best practices for the entire business to succeed.

The additional layer of franchising, in the commercial cleaning business, allows the unit and master franchisees to – literally and figuratively – get their hands dirty and focus on the customer level. The corporate franchise offers support and is the overarching business strategy partner for the other two levels.

Adam Povlitz, CFE, is CEO & President of Anago Cleaning Systems, one of the world’s leading franchised commercial cleaning companies and a leader in technological advances relating to business operations and janitorial services. A previous IBM executive, Adam holds several business degrees and certifications, including an MBA in Marketing and Finance from the University of Miami. He is a Lean Six Sigma Green Belt, an IFA Certified Franchise Executive, and an ISSA Cleaning Industry Management Standards Expert. For more information about Anago Cleaning Systems, click here.