Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

Reader’s Question: I’ve Seen Some Negative Reviews Suggesting That (Commercial Cleaning) Unit Franchises are Not Financially Successful…

by Franchise Chatter on November 5, 2011

in Commercial Cleaning Franchise, Reader's Question



Franchise Chatter Membership Information

Don't Invest in a Franchise Until You Check Out This List Find the Ideal Business for You

(Ambrosio’s note:  The following is a recent exchange I had with a reader on the comments section of my Jan-Pro Cleaning Systems review.  I’ve reached out to my franchise contacts at Jan-Pro Cleaning Systems and Stratus Building Solutions for their comments.  So far, I’ve only heard back from Marisa Lather of Stratus.  I’m hoping that this short blog post will serve as a gentle nudge to our friends at Jan-Pro who can shed more light on this issue.  I promise to update this post with their comments, should they choose to respond.

I’m also looking for honest feedback from unit franchisees (either past or present) of leading commercial cleaning franchises like Vanguard, Jan-Pro, Stratus and others.  So if any of you are out there, I’d sure love to hear from you.)

Jan-Pro Cleaning Systems LogoK.H., reader:  I read your review of Jan-Pro Cleaning Systems. I have seen some negative reviews that suggest the unit franchises are not financially successful because the Master Franchisee retains a good deal of the operating margins. What have you heard? Thank you.

Ambrosio, Franchise Chatter:  Thank you for your comment and question. To be honest, I don’t have any deep industry knowledge or experience in the area of commercial cleaning, but I did reach out to two contacts on the franchisor side (one at Jan-Pro) to request for their comments. Hopefully, I’ll hear back from them soon so that I can share their insights with you.

Having said that, if the reviews consistently echo the same concerns, I’d take notice and would definitely press the franchise rep on this issue. Since we don’t have any reason to believe that the reviewers have a hidden agenda, the comments of current franchisees carry a lot of weight.



By just looking at the business model, however, if the Master Franchisee is the one responsible for getting clients, then he or she is justified in taking a decent cut off the revenues. It’s just like having a dedicated sales person who is responsible for signing new customers — and it’s a given that the best salespeople receive very generous commissions.

This is one industry where a resourceful individual, who doesn’t minding doing both the sales and cleaning functions, can have a decent chance at success by taking the independent route. It doesn’t take a lot of money or expertise to get started. There are books on this very subject, one of which I recommend as an affiliate.

Thank you so much for supporting my blog. Please check back soon. If I hear back from my two contacts, I will devote a separate blog post to this very question.

Stratus Building Solutions LogoMarisa Lather, Marketing Coordinator, Stratus Building Solutions:  What an outstanding question and one to definitely take into consideration. I can only speak for Stratus Building Solutions.  It all goes back to creating a system built for success with appropriate margins for every participant.  Every Stratus system has been built with the unit franchisee in mind.

The founding philosophy of Stratus Building Solutions is to draw distinction to the company by being a true bottom up organization.  The success of the unit franchisee is paramount to the success of the company.  Even in building our tagline of “Your Success is Our Only Business” we wanted to convey how truly committed we are to having successful franchisees on all levels, starting with the unit.

Every product, system and process has been carefully evaluated to see how it will influence the outcome of the unit franchisee’s investment.  For example, we are the only company in our industry to have our own line of Green Seal Certified cleaning chemicals.  When we were exploring the idea, we went to our developer and stressed it must be competitive or superior to anything else available in our market.

Our Stratus brand HEPA Filtration Backpack Vacuum is a top grade piece of equipment that costs $450 at retail.  Through the Stratus program, unit franchisees are able to have the vacuum at a discounted price while still maintaining top quality.

It’s also worth noting that we have zero litigation (compared to our competitors) and we offer unlimited consultation on what the FDD states so that our prospective franchisees understand exactly what is coming in and going out.

We’re lucky to have avoided such issues for the most part, but it’s certainly a valid question and it’s best to know all sides of a business — good and bad — when evaluating a final choice.  Buying a franchise is more than just an investment in your money – it’s your time, your life really.



Franchise Matching Quiz



{ 9 comments… read them below or add one }

UnhappyFranchisee.Com November 9, 2011 at 11:33 am

Ambrosio:
Thank you for posing this question to the cleaning franchisors, and thank you for posting Ms. Lather’s response. I applaud you for letting your readers know that there are serious concerns about all commercial cleaning franchises (not just Stratus) that warrant deep scrutiny before investing.
I have linked to this blog post in a rebuttal that’s published here:
http://www.unhappyfranchisee.com/stratus-building-solutions-franchise-are-stratus-franchisees-successful/
While I’m sure that Ms. Lather is a very nice person, her response is disingenuous and never answers the question she says is “outstanding.” Concerns and complaints posted on UnhappyFranchisee.com are numerous and serious, yet Ms. Lather pretends they don’t exist.
More seriously, Ms. Lather states “we have zero litigation.” This is confusing as an attorney has announced the filing of a class action suit against Stratus on behalf of Stratus franchisees: http://www.unhappyfranchisee.com/stratus-building-solutions-franchise-class-action-lawsuit/

Perhaps Ms. Lathrop could clarify the litigation statement and try, one more time, to explain whether unit level franchisees are financially successful. Yes or no would work.

Thanks for posting!

Reply

Ambrosio November 9, 2011 at 5:37 pm

Hello,

Thank you for your comment. I appreciate the exchange of different (even opposing) viewpoints because they can help prospective franchisees make a more informed decision. Looking forward to hearing more from you on the blog. Thanks for dropping in.

Best regards,

Ambrosio

Reply

Marisa Lather November 10, 2011 at 7:03 am

Hi,

Thank you for providing us with an excellent opportunity to share a simple answer. Sometimes it’s easy to get caught up in the details and reasons why than providing a simple answer to the question: No, it is not true that unit franchises are not financially successful because the Master Franchisee retains a good deal of the operating margins.

Very simply put, if the program is not working at the unit level, there is a third of the company not working which would result in business failure.

In regards to the attorney filing suit, there are no grounds to stand on to make a class action lawsuit and any such litigation has properly been dropped.

We open our doors and invite anyone with questions of any nature to speak to the company directly by calling 877-731-2020. We are happy to share any information on our Unit Franchise Program or Stratus Building Solutions. Thank you for giving us an opportunity to clarify.

Reply

Ambrosio November 10, 2011 at 7:14 am

Hi Marisa,

Thank you for your response and for extending an invitation to my readers to speak to your company directly if they have any specific questions on Stratus. I appreciate your active participation in my blog.

Best regards,

Ambrosio

Reply

Jonathan Fortman November 15, 2011 at 11:17 pm

As the lead attorney for the Stratus franchisees in the lawsuit filed in Missouri, you can imagine my surprise in learning that our case could not be brought as a class action and had been dropped. I don’t know where Ms. Lather got her information, but a simple review of the court’s electronic docket show’s our case is alive and moving forward. I would hope that Ms. Lather is simply passing along information from another party that she failed to verify. Otherwise, she would be intentionally misleading the industry and potential franchisees by putting out such false information.

Jonathan E. Fortman
(314) 522-2312

Reply

Raul Chavarria May 8, 2012 at 12:32 pm

Ambrosio,

I just ran into your site, and wanted to respond. I was not a Stratus Franchisee but the one who sold the franchisees. I did this for 2 months and learned quite a lot. I have read how many refer to commercial cleaning franchises as scams. This is not the case, but the financials are definitely skewed towards Stratus. It would be very hard for a person to make a living doing this given that Stratus takes 21% off the top and “owns” the client even though you are the one working it. The Master Franchisor makes money 3 ways: selling franchises, selling accounts to those franchisees at a big mark-up and selling special jobs to the clients. Selling franchises gives them direct cash money and is the most immediate earnings for them. But selling accounts gives them a big mark-up and money they can deduct from the franchisees monthly earnings. So you can see there could be a lot of motivation to churn accounts and be less than forthcoming in franchisee presentations.

As in my situation, I believe many other Master franchisors found themselves in a situation where they were not selling enough franchisees or accounts to make money. So the next step is to pitch low prices, win the accounts and and gloss over details in franchisee presentations so they can be signed easier. The result is an unsuspecting franchisee working an under-priced account that they can’t profit from. When the franchisee drops the account or doesn’t work it properly due to the low price the Master is free to snatch and resell it. Ca-Ching!

Many who have the dream of owning their own business will find that this doesn’t fit. Stratus and the other commercial cleaning companies dictate the way you have to clean, what you wear, what you clean with, they own and control the clients, can fine you for any series of infractions, they conduct constant inspections. In general they carry themselves as your boss, but won’t say it. I found it strange how we would tell them they are their own boss then proceed to dictate almost every detail of their Stratus working day.

These unit commercial cleaning franchises work best if you have a very large crew and can work large accounts like $5,000+ monthly. Otherwise, you are really at the mercy of the Master Franchisor and the way they run their business.

Reply

Ambrosio May 8, 2012 at 7:48 pm

Hi Raul,

Thank you for sharing your personal experience and your unique perspective on the industry. It’s important for prospective franchisees to hear all sides of the story, and I thank you for taking the time to share your thoughts.

Best regards,

Ambrosio

Reply

Phil May 4, 2013 at 10:21 pm

I, just ran to this website, I’m a canadian JP franchise. When we read about fast growing franchise, it’s only related on yearly new franchises development, but the real question is:
…WHO MANY OF THOSE FRANCHISES ARE STILL IN BUSINESS…
My understanding, according to JP’s internal infos, is that half are reselling in the first three years! Why?… Finance is THE big issue, especially if it’s a fulltime business! $10,000 annual franchise platform is supposed to equivalent 10h/weekly. The standard wage practice wouldn ‘t be so bad if Master Franchises would’nt play with estimation time for jobs. If I consider an approx. $22 CND wage (contract bid monthly amount/estimed time), minus franchisee fees (18%-19%), it leaves am approx. $18 CND, minus expenses, franchise buying cost amortization and ”income charges if so”. By experience, if you take into consideration most timing contracts are under-estimed ( they want to be really competitive) by a 30min to 1h per visit, then it’s not $18 no more. Icing on cake, due to some provincial laws, minimum wage at commercial bulding for employees entrepreneur are $15, 63 plus charges, which brings salary to approx. $17 50, so, it’s clearly impossible to legaly hiring staff. It take about 6 months to a franchisee to discover this mess and it’s then to late.
p.s. Litterature says a franchisee has 5 days of formation, I had 3-4 hours in their office and 10h doing floor waxing with an other franchisee at one of it’s new account for free with a nice certificate saying I’m an expert!. Big Buzz!

Reply

Anthony December 21, 2015 at 8:14 am

I am a current JP franchise owner and I can honestly say that buying a franchise with them changed my life. I am finally free from a job and I am living my dream of being an entrepreneur. The fees associated with the franchise are a little expensive, but the opportunity is definitely still worth it if you know what you are doing. If anyone wants more information about cleaning franchises, I’d be more than happy to help. I wrote a book on this stuff and I have a YouTube channel that discusses everything associated with the business.

Reply

Leave a Comment

{ 1 trackback }

Previous post:

Next post: