Why Invest: ServiceMaster Clean Vice President Says Size of Company Matters When Exploring Janitorial Services (Part 1)

This post is the first of two parts. To read Part 2, please click here.

When one thinks of the number of trash cans that need to be emptied, carpets that need vacuuming, and restrooms that need cleaning in offices around the country, it’s not hard to see why the ServiceMaster Co.’s annual revenues are $3.2 billion annually.

ServiceMaster, headquartered in Memphis, Tenn., is a privately held company that oversees one of the world’s largest residential and commercial service networks, including Terminix, TruGreen, ServiceMaster Clean, Merry Maids, and American Home Shield.

But in talking with Franchise Chatter, David Messenger, vice president of market expansion, wanted to focus specifically on ServiceMaster Clean, a franchise system that provides janitorial and commercial specialty cleaning, as well as commercial and residential disaster restoration and health care facility cleaning.

“This business is not nearly as sexy as frozen yogurt or something,” said Messenger, 65, talking about the company’s efforts to recruit new franchisees. “It takes a few different tools to attract people to this business.”

And ServiceMaster has plenty of franchise tools in its shed, not the least of which is a long history and legacy of franchising.

“We’ve been franchising for 61 years,” says Messenger, who is a member of the Diversity Institute of the International Franchise Association, of which ServiceMaster is a founding firm.

Formerly a public company, ServiceMaster is now privately owned by the private equity company Clayton Dubilier & Rice LLC. With a global network of more than 7,300 company-owned, franchise, and licensed locations, the company has about 20,000 corporate associates and a franchise network that employs an additional 31,000 people. There are about 800 ServiceMaster Clean franchisees focusing on the commercial cleaning end of the business in the United States, Messenger said, and there is ample room for more.

Leading Competitor in Crowded Market

According to a market research report from the Small Business Development Center, the U.S. janitorial services and carpet cleaning industry consists of about 50,000 janitorial companies and about 9,000 carpet and upholstery cleaning companies with combined annual revenue of about $35 billion.

When you add other services, such as pest control, window cleaning, parking lot maintenance, security, and heating, ventilation, and air conditioning (HVAC) facilities management, the competitive market is valued at $78 billion, according to a Marketdata Enterprises report. The broader market consists of some 906,000 mainly small operators, including 48,400 franchised outlets.