Owning a franchise is a dream for some house cleaners and a reality to others. Some think owning a franchise is great because of name brand recognition, and national advertising.
We Ask a House Cleaner about franchise pros and cons and upfront costs. Angela Brown, The House Cleaning Guru says no business startup is easy. But owning a franchise gives you access to tutorials and existing training.
Franchise vs. start your own maid service? We’ve got tips.
Today’s sponsor is https://housecleaning360.com
#HouseCleaning360 is a reference database that includes both franchise and independent home service providers.
Listen: Owning a Franchise (House Cleaning)
Watch: Owning a Franchise (House Cleaning
Question: Would I Be Better Off Owning a Franchise or Starting My Own?
Owning a franchise. Have you ever thought about owning a franchise? We’re going to talk a little bit about the pros and cons of owning a house cleaning franchise.
Today’s question comes from a business owner who’s going to start a cleaning business. And he wants to know if he should go out on his own as an independent, or if he should just buy a franchise.
Answer: Owning a Franchise (House Cleaning)
Now, we don’t talk a lot about franchises here, but today we’re going to talk a little bit about the pros and cons of owning a cleaning franchise.
Pro: You Are Not Reinventing the Wheel
So you could start from scratch.
You could build a business and try to figure out all the ins and outs.
You could go through all the training and stuff you have to do to start a business.
Or, you could just step into an existing business. What this allows you to do, is to not reinvent the wheel.
The wheel already exists, and it’s connected to a wagon that is rolling.
You just jump on the wagon, and away you go.
Con: Owning a Franchise is Not Free
Now, there’s a price associated with owning a franchise. The benefit, or one of the pros, is that you jump on the wagon, and away you go.
One of the cons is that that is not free. You got to pay for that.
Instead of starting a startup business and paying as you go, there’s a big upfront down payment cost.
Then as the wagon starts going along, they’re going to collect a little bit of your money every job you do. They’re going to collect a percentage of what you earn, and that is the price for riding on the wagon.
Pro: Banks Will Finance You with a Franchise Backing You
There is a huge upfront cost. This is usually associated with buying a franchise. But there is good news, stay with me.
You’re hopping on an existing wagon, which is an existing brand. It is an existing name that has success in the cleaning industry. So, when you go to get financing from the bank, you are more likely to get approved. They see that you have a franchise backing you.
Con: Without The Franchise Backing You – You May Not Get a Loan
Whereas if you’re a small mom-and-pop company, you don’t need the loan. Because you don’t have the big down payment.
You are paying as you go for your cleaning supplies, vehicle, and transportation expenses. These would include things like gas, insurance, etc. Then you are also paying for your personal bonding and insurance. Also, other little costs that are part of running a business.
Pro: National Advertising
All right, now one of the pros of the franchise, is that they have national advertising. They have a known name.
You don’t have to go in and reinvent the wheel, and say, “Hey, I’m John Jones Company, and we do house cleaning.”
You don’t have to re-educate the market, you just slap a design on your car, or magnets, or whatever it is that the franchise company has, and away you go.
People are like, “Oh, yes. I recognize this brand. I’ve seen it any many different neighborhoods.”
You’re already jumping onto an existing platform of a brand name. The benefit is that you already have marketing in place.
Con: You Are Paying for National Advertising
The con is that you got to pay for it.
So instead of marketing in your little area, you are marketing on a national scale.
Now, you’re paying for AdWords, and keywords, and national websites, and social media. All kinds of stuff that the company already has in place.
That is not cheap, and so that is a cost of doing business.
Pro: A Franchise Has Social Media in Place
One of the pros of the franchise is that they have all the social media in place. And they have websites and templates created as well. They already have these things in place.
So you don’t have to go recreate this stuff from scratch. You just use the stuff that they have.
Pro: They Have a Training System in Place
Now, one of the benefits of belonging to the franchise, is they have a training system already in place. They already have a way of doing things.
You don’t have to reinvent that wheel. You just jump into their training sessions, and you learn the way they do things, and then you go do it.
It’s so easy. Of course, you’re paying for that,
Con: Little Flexibility
But one of the cons for following their training system is there’s little flexibility. Because you bought the franchise, you have to do things exactly the way they showed you.
As a small business owner, someone might say, “Hey, can you do these special extra projects?”
As a small business owner in your own company, you can say, “Yes, I can.”
Whereas with the franchise, you must say, “Sorry, that’s not a service that we offer.”
So you don’t have as much control.
There are pros and cons to doing both.
One of the fun things about the franchise is it’s like a business-in-a-box. You can be up and be running almost immediately. And so you dump your money down, and you say, “Yes, I would like to buy a franchise.”
You go through the training, you hire the people, boom, you’re out the door.
Now, the con of that is the business-in-a-box is not as resalable. You can sell your business if you decide to get out of it. So the exit strategy is a little bit different, but you will most likely never recoup your upfront costs.
Industry professionals that have I have spoken to about it, will say you can sell your business. But it’s like a depreciation on a car. It’s never quite worth what you paid for it.
There Are Pros and Cons
There are pros and cons to owning a franchise. And there are pros and cons to owning your own business and just starting it from scratch, and doing it as you go.
I just wanted you to be aware of these things. I am not saying that one is better than the other.
There are some people that are a better fit for a franchise because they need the structure. And they need somebody to report back to. They don’t mind paying the percentage every month out of their earnings to have a brand name. They enjoy having the websites and social media already set up.
There are other people that don’t have the upfront capital and don’t want to take out loans. And they’re okay building the business as they go.
I’m not saying one is better than the other. It’s kind of a judgment based on your own personal business style.
So those are a couple of pros and cons that you should consider if you’re thinking about owning a franchise.
Alrighty, my two cents for today, and until we meet again, leave the world a cleaner place than when you found it.
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Resources For This Episode
How to Franchise Your Business: Grow Your Business Using Other Peoples Time and Money – http://amzn.to/2z0Umbq
Take the Fear Out of Franchising – http://amzn.to/2zFuFw2
A Business Franchise Versus a Business Opportunity – http://amzn.to/2zWNBr3
Buy “Hot” Franchises Without Getting Burned – A How to Franchise Guide: Helping You Make the Best Decision When You Buy a Franchise – http://amzn.to/2yCMGI5
IS IT A SCAM? The Truth About Commercial Cleaning Franchises – http://amzn.to/2ieXuWv
Starting the Ultimate Franchise -: How Anyone Can Leave the Corporate Rat Race, Start A Man in A Van Business and Save Themselves £1,000s In the Process – http://amzn.to/2hwPoLX
Franchise VS Start-Up: What to Look Out for When Buying a Franchise – http://amzn.to/2yCNM6F
Franchise vs. Start-up: Which One Works for You? – http://bit.ly/2fLpXzM
Franchise vs. Startup: Which Way to Go – http://bit.ly/2zzZhPY
Weighing the Pros and Cons of Franchising vs. Traditional Business – http://bit.ly/2yBIrfQDE
Permissions To Share
Savvy Cleaner – House Cleaner Training & Certification