Franchising in the Cleaning Industry: Lessons from the USA
The ancients used to say that “we are like dwarfs on the shoulders of giants,” referring to the great legacy that human civilization has inherited from antiquity. In the world of franchising, the giant is certainly the country from which it originated: the United States of America.
Let’s resume this column with a purpose: to see and analyze the trends in the USA that will consequently arrive in Europe (and therefore in Italy).
In this issue, I want to delve into a type of format often underestimated but which offers great convenience in terms of affiliation costs and significant revenue flow: cleaning services. Obviously, the “cleaning service” involves both small and large entrepreneurs and can be directed towards anything, from cars to houses, from upholstery to baby items. Remember when I talked about the opportunity of service franchising? Well, this is one of the most fitting examples.
Let’s take a detailed look at the top four American brands in the sector.
1. Anago Cleaning System
This brand has over 1,500 affiliates across the United States and Canada. The success of the brand, founded in 1989, is attributed to the wide variety of cleaning services offered, covering all types of premises (public and private) as well as vehicles and events. Another determining factor is the affiliation cost, which, in its simplest formula, is just over $10,000. An important lesson we can learn from this brand is the aggressive commercial approach in recruiting affiliates: lowering entry costs makes them appealing to the wide audience of small entrepreneurs (which is also an important class not only in the USA but also in Italy) and can easily be seen not only as a job but also as a secondary business to “have fun” with.
2. Chem-Dry Carpet
English-speaking countries have a peculiarity in furnishings (and those who have visited the USA and the United Kingdom know it): they often use carpeting. This custom (not universal, fortunately) requires, however, greater attention to upholstery care. To meet a widespread need, Chem-Dry Carpet was founded in Tennessee in 1977, specializing in the cleaning and sanitization of upholstery from all angles. Today, it has over 3,500 affiliates in the USA and Canada and with costs certainly not low compared to competitors (minimum $30,000!). This brand’s story confirms what I’ve been saying for some time now: specialization pays off. Entering a more competitive market is difficult, and only with a well-defined value proposition can one carve out a significant market share and hope for success.
3. Vanguard Cleaning system
The commercial marketing mix of this brand is very similar to that of competitors (like Anago), but its success, which has led to over 3,000 points between affiliates and direct outlets in the USA, is surely linked to the ultra-competitive affiliation offer. The basic affiliation, in fact, involves only a $5,000 investment. This aspect is crucial for cleaning formats (as well as for service formats in general). Since these are usually businesses that do not require large equipment, franchisors are advised to lower economic barriers to entry as much as possible in anticipation of steady earnings across the network. This is the true win-win perspective that is the basis of the franchising business philosophy.
4. Rooter-man
The last brand we talk about is actually a special case. It is a company that has been operating for over forty years and has received many awards over time. However, compared to the other players in the sector that we have mentioned, it has a “somewhat” underdeveloped network, only 700 points between direct and franchising outlets in the USA and Canada, despite a basic affiliation offer of less than $4,000. Why this contradiction? Money is not always (surprise!) the heart of the problem: it all depends on the territorial expansion strategy. Each affiliate covers the territory of many counties since it is a format based on the concept of mobile service. In fact, the affiliate moves with a van (and the low investment cost only includes the delivery of equipment, assuming that the affiliate already owns the vehicle). This teaches us how numbers should be read with a critical eye and are not sufficient to determine the success or failure of a project.
Only with this serious and analytical approach can we understand how to best position our format in the market and, from the potential franchisee’s point of view, evaluate the true value of a business model.
