In this FDD Talk post, you’ll learn the following:
- Section I – Background information on The Cleaning Authority franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for The Cleaning Authority franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for The Cleaning Authority franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of The Cleaning Authority’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 total actual gross revenue; average gross revenue; total number of customers; average price per clean; total number of cleans performed; average cost of goods sold; average customer loss; total estimate calls and total estimate appointments, and conversion percentages; total sales made to new customers, and conversion percentage; estimated total number of employees; and average Territory size for the period January 1, 2016 through December 31, 2016 (the “Accounting Period”) for the top third, middle third, and bottom third of the 180 franchised and 1 affiliate-operated Cleaning Authority businesses that were operating for the entire period January 1, 2016 through December 31, 2016
- 2016 and 2015 average, median, high, and low gross revenue for the 180 franchised and 1 affiliate-operated Cleaning Authority businesses that were operating for the entire period January 1, 2016 through December 31, 2016, and for the 167 franchised and 1 affiliate-operated Cleaning Authority businesses that were operating for the entire period January 1, 2015 through December 31, 2015
Section I – Background Information
9 Things You Need to Know About The Cleaning Authority Franchise
Reaches Milestone of Serving Over 100,000 Customers
1. In mid-August, The Cleaning Authority celebrated a major brand milestone of having served 100,000 active customers. The brand attributes its success to its franchisees’ success in the implementation of ambitious marketing and tenacious customer retention programs, as well as their commitment to delivering quality and exceptional customer service.
2. The Cleaning Authority also said that it has built a loyal customer base through its Detail-Clean Rotation System, which ensures that each home gets the level of clean it needs at the right frequency.
3. Heather McLeod, The Cleaning Authority’s vice president of marketing, said, “We’re proud to reach the 100,000-customer milestone and even prouder that our brand’s attention to detail and the integrity of our services has helped propel us there. Our commitment to quality has never been higher and it’s reflected in the growing group of customers who find value in the way we help them eliminate the hassle of cleaning from their daily routines.”
Achieved Record Breaking Year in 2016
4. At the beginning of 2017, The Cleaning Authority celebrated its accomplishments during the previous year, including opening its 200th location and its active efforts to strengthen its leadership team and franchise system. The brand said that its rapid growth in 2016 was a result of promoting the company’s former vice president of franchise development, Iric Wexler, to chief development officer.
5. The 200th store was one of 24 units that The Cleaning Authority added to its system in 2016. In addition to adding more locations, the brand saw an 11 percent increase in system-wide sales that year. The Cleaning Authority also said that it had plans to open at least 12 new locations by the end of 2017.
6. The company said that it hoped to build upon its momentum in 2016 by relying on its franchisees to hire and retain quality employees through a well-structured training program, and have a clear trajectory for valuable professional housecleaners to advance to management roles.
7. The Cleaning Authority was founded in 1977 in the Baltimore-Washington metro area and was one of the first whole house cleaning services in the area. In 1989, Steve Robinson and Tim Evankovich bought The Cleaning Authority with plans to grow the company and enable it to reach more clients. Robinson and Evankovich continued to open new locations around the country and started franchising the brand in 1996.
8. The company was acquired by PNC Riverarch Capital in 2014, with Steve Robinson retaining his leadership position in the Board of Directors. Today, there are over 215 The Cleaning Authority locations across the U.S. and Canada.
Entrepreneur’s Franchise 500
9. The Cleaning Authority has ranked on Entrepreneur’s annual Franchise 500 list a few times in the past 10 years. The company’s highest rank was No. 203 in 2007, while its lowest rank was No. 476 in 2015.
Section II – Estimated Costs
- Please click here for detailed estimates of The Cleaning Authority franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on The Cleaning Authority’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
Part 1 – Overview
- Tables 1-A and 1-B disclose: (1) total actual gross revenues and the highest and lowest actual gross revenues; (2) average and median gross revenues; (3) total number of customers; (4) average price per clean; (5) total number of cleans performed; (6) average cost of goods sold; (7) average customer loss; (8) total estimate calls and total estimate appointments, and conversion percentages; (9) total sales made to new customers, and conversion percentage; (10) estimated total number of employees; and (11) average Territory size for the period January 1, 2016 through December 31, 2016 (the “Accounting Period”) for The Cleaning Authority’s franchised businesses (“Franchised Businesses”) (Table 1-A) and The Cleaning Authority’s affiliate-operated business (“Affiliate-Operated Business”) (Table 1-B).
- The franchisor compiled this historical information from reports submitted to it via its proprietary business tracking software (TCA.net), except for designated household information that appears in certain charts below, which it obtains from one or more third-party demographic service providers.
- The franchisor requires that its franchisees and the Affiliate-Operated Business track all revenues (including customer information) in TCA.net, and strongly recommends that the business use TCA.net to track key cost information (for example, cost of cleaning supplies, labor, mileage reimbursement, payroll taxes, and insurance). The franchisor believes the majority of its franchisees and the Affiliate-Operated Business follow this recommendation and use TCA.net to track key cost information in TCA.net.
- The franchisor has no reason to doubt the accuracy of the information included in Item 19, but it has not verified or reviewed it, and the information has not been audited.
Table 1-A – Franchised Businesses Operating From January 1, 2016 to December 31, 2016
- Part 1 provides information for the 180 Franchised Businesses (the “Reporting Businesses”) that were operating for the entire period January 1, 2016 through December 31, 2016 (the “Accounting Period”).
- The Reporting Businesses cover 4 Hometown Markets and 176 Enterprise Markets. The franchisor excluded the 21 Franchised Businesses that opened for business, the 2 Franchised Businesses that it terminated, and the 4 Franchised Businesses that ceased operations during the Accounting Period.
- The Chart presents information based upon the top, middle, and lower performing Reporting Businesses. The franchisor determined the top, middle, and lower performing Reporting Businesses by comparing the actual gross revenue achieved by each Reporting Business during the Accounting Period.
Top Third of Reporting Businesses by Revenue