Hi Steve,
I found this site and your column totally by accident. Very well done and an unusual resource that I haven’t found in any other industry I am investigating. You see, I was down-sized late last year and I’m in that familiar “too young to retire (I’m 51) but too ‘old” to be hired” group. (Don’t believe what anybody tells you- it may be “illegal” but age discrimination is still alive and well in America!) I still have a decent income from my investments so I’m not desperate but I do need to do something soon.
My specific question is do you have any advice, experience with carpet cleaning franchises that you could share? I see the ads and they look really good. Then I’ve also been “lurking” on some of the carpet cleaning discussion forums (wow, those guys can play rough!) and it seems that a lot of people say to stay away from franchises. Those that are franchises are often upset with their franchisor. So what say you, Steve?
Considering My Options in Nashville
Dear Considering,
First, congratulations on finding the carpet cleaning industry. (And this web site!) Carpet cleaning is a wonderful business IF you “do it right”. (Most carpet cleaners don’t!) And there s no doubt that a good franchise can help you do it right from the “git-go” and cut years off your learning curve.
I’ve worked with many of the franchisors in the industry, Considering, and been exposed to the rest as we have SFS members from every major franchise group.
As with all things in life, there are trade-offs. (And an honest franchisor will tell you this.) The positives? Ready made systems and procedures- what we call a “Business Infrastructure” in SFS. Sure- you can come up with this “infrastructure” on your own but how many years will it take you? So a good franchise will save you years and a lot of effort on developing a “real company”.
Good franchisors will also give you support and because (hopefully) they are a household name you will have immediate name recognition. Once again, cutting years off your growth curve. And one last benefit also may be a curse to many- they add “accountability” as in you have to do things their way!
So now for the franchise negatives: This same set of “accountability handcuffs” that are a blessing in my previous paragraph may chafe many entrepreneurs, Considering. In addition, obviously you will be adding another layer of overhead in the form of royalties that have to be paid to the main organization plus normally a substantial entry price. Plus if you want to expand outside of your original territory you will usually have to pay for the privilege.
Not too whip a dead fish but another problem I find with some franchise groups is they are extremely territorial and reluctant to let their members learn from outside sources. While this desire to “protect” their members is understandable it also can be very dangerous to the success of their franchisees.
At the end of the day it is up to you. However, Considering, given that you are “not a spring chicken” anymore at 51 (Can I say that without hurting your feelings? If it makes it any better I am ahead of you at 57!) you really should be thinking about your exit strategy as in how to sell your business. One area where a good franchise will really shine is they will help you sell your business. (At a price, of course!)
In fact, one question I always ask of people inquiring on the merits of a franchise is “What is your ‘exit schedule’?” Given the difficulties of selling a small service business, if I were planning to “cash out” in five to ten years I would be tempted to go the franchise route. If you have a longer time line in mind, then investing the franchise overhead in other training and support services might work better for you.
NOTE: You can make the selling process much easier and more lucrative with my “Cashing Out” Special Report!
You also mentioned, Considering, that franchisees become “upset” with their franchise organization. Absolutely. Just as in other relationships, most of the problems can be traced back to a lack of COMMUNICATION and poorly defined expectations.
I find that often franchisees expect too much from headquarters. Especially when they go through a rough patch (as we all do in business) it is so easy and tempting to blame it on “lack of support” from the franchisor. (Remember I am speaking in general and not accusing anyone specifically.)
This is not to defend carpet cleaning franchise organizations. They have many problems, including higher overhead and loss of freedom, and are certainly not for everyone. But I find many disgruntled franchisees trying to shift the blame away from where it properly belongs any time a business struggles- the owner. Remember … “the fish rots from the head down.” 🙂
Steve
P.S. Franchises in the carpet cleaning industry are essentially selling two things: 1)Turn-key systems and 2)ongoing support. (Name recognition in most markets usually is not a big thing.) However, both systems and support are available from a non-franchise source and without the potential entanglements of a franchise. It is called the Strategies for Success seminar! In fact, many franchises have told me they received MORE from the SFS program than they ever have from their expensive franchise and at a fraction of the cost!
I got into the industry back in 2004 by buying a new franchise in a city where the franchise had no name recognition. The franchisor was also new and had not worked out many of the processes to be consistent and repeatable. Having a business process consulting background for more than 20 years I went to work fixing the many issues I encountered. The franchisor was very resistant to any changes and we quickly were odds with one another. Fortunately, through my testing I found that not everything the franchisor was advertising was correct and instead of revealing anything to the general public and other franchisees I was allowed to walk away. I wasted a lot of money branding a name I am not using today, but I am much happier today and my company has received a number of prestigious awards for the work that we do. It was a little tough sledding having to make a company change during a down economy, but it was worth it and I’m very encouraged about the future.
I learned a lot about the industry when I bought a franchise, but I thought they would provide a lot more assistance than they did and I think it is very possible to get into this industry by doing a lot of research and study that will enable someone to get into the industry and avoid the franchise route, although I would probably hire someone who has a lot of industry experience as well. I recommend that anyone getting into it with a franchise take a close look at the financials and the fixed cost structure that you will be bound to because if I was a franchise during 08 and 09 I would have been forced into bankruptcy and the franchisor would have taken over the business.
Thanks for your well thought out response, Steve. (I like that name!) Truer words than these were never spoken:
“I think it is very possible to get into this industry by doing a lot of research and study that will enable someone to get into the industry and avoid the franchise route, although I would probably hire someone who has a lot of industry experience as well.”
At the risk of tooting our own horn may I suggest that the “someone who has a lot of industry experience” could be three people named Chuck Violand, Bill Yeadon and Steve Toburen! These three guys have well over 100 years of industry experience and believe it or not, non of us have anything to do with “sales” at Jon-Don. Our only mission from Jon-Don is your success. (If you doubt me go on any industry discussion forum and pose a question about SFS.)
Thanks again for your comment,
Steve
PS One note- Remember you can’t “hire us”. In fact, you can attend SFS free and then stay a lifetime member and with zero obligations on your part. Weird but true- go to our SFS FAQ’s to read the straight scoop.
I started my carpet cleaning business 18 months ago because because I was looking for a simple business to start and operate that would generate a reasonable profit from the get go.
Here’s what you might find interesting. For the past 18 years, I’ve worked in the franchising industry as a franchise development and marketing consultant. I’ve worked with or directly represented over 240 of the top franchise companies in North America including several carpet cleaning franchises. In other words, I’m a franchise insider and have made a pretty good living in the franchise world.
When I made the decision to start my own carpet cleaning business I had the inside information on the most successful carpet cleaning franchises available. I knew the good, the bad and the ugly on every one of them. So if anyone was in a position to choose the best carpet cleaning franchise to move forward with, it would be me.
So which carpet cleaning franchise did I choose? None of them!
Here’s why. First and foremost, there is absolutely no barrier to entry into the carpet cleaning business. Anyone can easily get into the business. If you need help and advise getting started, there’s an abundance of quality, free, from “down in the trenches” information that’s easily accessible. (Including this website.) Second, exclusivity is meaningless when it comes to carpet cleaning so any franchise selling on that basis is pulling the wool over your eyes. You may not have a competitor from the same franchise in your area, but as I mentioned in my first point, anyone can get into this business. Third, in my opinion, paying an upfront franchise fee and ongoing royalties is taking on an investment and expense you’ll soon regret.
I’m not suggesting that buying a franchise is always the wrong thing to do. The right franchise in the right industry can be a great wealth building vehicle. I just don’t believe that a carpet cleaning franchise fits that description.
Thank you for telling the truth about carpet cleaning franchises! I perform a lot of encap carpet cleaning. Once I clean a client’s carpet I seem to retain their business. Who needs a carpet cleaning franchise taking a chunk of their profits? Hats off to you! Jon of JONJEN’S JANITORIAL
Once again, folks, that is what is so great about this industry. There are so many different routes to YOUR chosen definition of success. (With or without buying a franchise.)
Steve Toburen
PS I gotta say we see a fair number of SFS attendees who are very pleased with their franchise decision. On the other hand, we have others who got started through a franchise and then bailed out later. So see my point above re: “different routes”! At SFS we’re just happy to help you along your chosen way!