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 2021 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 2021 FDD

• Section IV – Number of franchised and company-owned The Cleaning Authority outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of The Cleaning Authority’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 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 leads and total estimate appointments, and conversion percentages; estimated total number of employees; and average Territory size for the period December 31, 2019 through December 31, 2020, the franchisor’s 2020 fiscal year, for the top third, middle third, and bottom third of the 197 Enterprise Market Franchised Businesses that were operating for the entire 2020 fiscal year

• number and percentage of recurring cleans and one time only cleans performed by the 197 Enterprise Market Franchised Businesses for the 2020 fiscal year

Section I – Background Information

12 Things You Need to Know About The Cleaning Authority Franchise

Chief Operating Officer Discusses How Brand Survived COVID-19

1.  At the beginning of January 2021, Leanne Stapf, chief operating officer of The Cleaning Authority, was interviewed by Franchising USA. The COO discussed the strategies that The Cleaning Authority deployed to keep the company in business during the COVID-19 pandemic.

2.  When asked how The Cleaning Authority has pivoted throughout the pandemic, Stapf said, “With COVID impacting every industry, The Cleaning Authority was not exempt. At the start of the pandemic, several of our locations made the decision to close. About two months later, 40% of our locations were open or reopening and the rest were soon to follow. The professional cleaning services provided by The Cleaning Authority were, and still are, in-demand. Our franchise owners continued to provide superior cleaning services to ensure homeowners were able to enjoy their time indoors in a clean, comfortable and safe environment.”

3.  Stapf continued, “Immediately prior to COVID, we were in the development phase of our customer facing app. Once COVID hit, we immediately added new functionality that would push notifications to the customer when the cleaners were on the way, and when the cleaners completed the clean so that the customer could socially distance during the clean if they chose to. We were able to launch the app in early April, which was perfect timing in an era where we needed less one-on-one contact.”

4.  She added, “To continue to persevere and provide services during these unprecedented times, we transitioned our open houses to virtual meetings to accommodate prospective franchisees. In addition to that, we were able to secure a large order of Vapor Steam Machine for franchise owners, which utilizes dry steam vapor to sanitize and disinfect surfaces. This allowed our franchise owners to differentiate themselves in the marketplace by offering additional services and to earn additional revenue. We also built an extensive training program for our franchise owners through our Learning Management System at time of machine deployment. Lastly, we introduced the option to set virtual in-home estimates. Depending on the franchise owner preferences, our national call center began offering appointments for both the traditional in-home estimate as well as virtual estimate to prospects looking for service.”

5.  According to Stapf, The Cleaning Authority is a very attractive brand for business owners. She said, “The Cleaning Authority offers a variety of qualities that make the brand an attractive business for franchise owners. One being a scalable, recurring revenue. The Cleaning Authority serves more than 45,000 families each week and with most customers averaging a clean every two weeks, our franchise owners are pulling in recurring revenue from a repeat customer base. Elite cleaning services are always in demand and our reputation for excellence, coupled with our franchise model have helped our franchise owners grow large businesses. At The Cleaning Authority, our franchise owners average $1.1 million in annual revenue.”

6.  Stapf continued, “When you become a part of The Cleaning Authority family, you’re provided with the marketing tools and operational infrastructure to build a profitable and sustainable business, while working toward absentee ownership. From our national marketing strategies and customer acquisition processes to management programs and real-time profitability tracking, we provide comprehensive training to franchise owners to ensure they feel confident running their business – even if they’ve had no previous experience in this industry. We’re fully invested in our franchisees’ success and will continue to provide the resources and support needed to achieve each of our owners’ personal and professional goals, while also providing a healthy work-life balance. Our business model allows owners to set their own schedule and doesn’t require late nights or weekends.”

Partners with Local Communities for Cleaning Authority CARES

7.  In mid-November 2021, The Cleaning Authority was featured on the International Franchise Association’s blog for Cleaning Authority CARES. Recognizing that more than 52 million people across North America experience food insecurity, and of those 16 million are under the age of 18, The Cleaning Authority once again partnered with local communities to make a difference. Since launching Cleaning Authority CARES in 2016, the franchise system in total has collected over 1 million pounds of food. But it doesn’t stop there. Local business owners contribute in their own ways.

8.  The Spokane, WA branch of The Cleaning Authority has a long-standing relationship with Family Promise of Spokane, which supports families to end the cycle of homelessness. To assist Family Promise in starting their shelter, the Spokane chapter donated 3,000 pounds of food and hosted a food drive. The chapter is one of four underwriters of the non-profit’s yearly fundraiser, the Ungala, and provided a year’s worth of cleaning services to be auctioned off, raising $3,000. At their holiday parties, they organize a secret Santa, which provided gifts for more than 75 families, including clothes, toiletries, toys, and more.

9.  As part of their ongoing commitment to the organization, The Cleaning Authority hires some of those who have needed the organization’s services. The first person hired from the shelter is still an employee, and has since brought her husband in as an employee. The location is now committed to hiring many others from the shelter.

Company History

10.  The Cleaning Authority was founded in 1977 in the Baltimore-Washington area and was one of the first whole home cleaning services in the region. Over the next decade, The Cleaning Authority grew around the area and caught the eye of Steve Robinson and Tim Evankovich. Robinson and Evankovich purchased The Cleaning Authority in 1989 and they worked to expand the brand’s reach and service more customers.

11.  In 1996, Robinson and Evankovich began franchising The Cleaning Authority and the company expanded further around the United States. The brand’s success drew the attention of PNC Riverarch Capital, who acquired The Cleaning Authority in 2014. A few years later, The Cleaning Authority became the flagship brand of Authority Brands, one of the largest home service franchisors in North America. Authority Brands has been owned by private equity firm Apax Partners since 2018. Today, there are The Cleaning Authority locations around the U.S. and Canada.

Entrepreneur’s Franchise 500

12.  The Cleaning Authority ranked No. 289 on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of The Cleaning Authority franchise costs, based on Item 7 of the company’s 2021 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• 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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  211
• Outlets at the End of the Year:  211
• Net Change:  0

2019

• Outlets at the Start of the Year:  211
• Outlets at the End of the Year:  213
• Net Change:  +2

2020

• Outlets at the Start of the Year:  213
• Outlets at the End of the Year:  205
• Net Change:  -8

Company-Owned

2018

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  3
• Net Change:  +1

2019

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

2020

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

Part 1 – Franchised Businesses Operating From December 31, 2019 to December 31, 2020

• As of the end of fiscal year 2020, there were 206 Franchised Businesses operating. Part 1 provides information for the 197 Enterprise Market Franchised Businesses (the “Reporting Businesses”) that were operating for the entire 2020 fiscal year.

• The franchisor excluded 9 Hometown Market Franchised Businesses and 10 Franchised Businesses that closed during fiscal year 2020.

• Part 1 presents information based upon the top, middle, and lower performing Reporting Businesses. The top, middle, and lower performing Reporting Businesses were determined by comparing the actual Gross Revenue achieved by each Reporting Business during 2020.

Top Third Reporting Businesses by Revenue

• Total Number of Reporting Businesses:  66
• Total Actual Gross Revenue:  $108,789,638
• Average Gross Revenue:  $1,648,328
• Number Above Average:  24
• Percentage Above Average:  36%
• Median Gross Revenue:  $1,552,630
• Highest Gross Revenue:  $3,009,078
• Lowest Gross Revenue:  $1,121,101
• Total Customers:  44,481
• Average Price Per Clean:  $125.22
• Total Number of Cleans:  844,837
• Average Cost of Goods Sold (“COGS”):  65%
• Average Weekly Customer Loss:  1.16%
• Total Estimate Leads:  94,733
• Total Estimate Appointments:  28,222
• Percentage of Leads Resulting in Appointments:  30%
• Total Sales:  19,832
• Percentage of Appointments Resulting in Sales:  70%
• Estimated Total Number of Employees:  2,820
• Average Territory Size (by Designated Household):  86,442

Middle Third Reporting Businesses by Revenue

• Total Number of Reporting Businesses:  65
• Total Actual Gross Revenue:  $57,711,111
• Average Gross Revenue:  $887,863
• Number Above Average:  30
• Percentage Above Average:  46%
• Median Gross Revenue:  $866,168
• Highest Gross Revenue:  $1,115,964
• Lowest Gross Revenue:  $649,060
• Total Customers:  26,104
• Average Price Per Clean:  $120.28
• Total Number of Cleans:  464,541
• Average Cost of Goods Sold (“COGS”):  65%
• Average Weekly Customer Loss:  1.34%
• Total Estimate Leads:  59,134
• Total Estimate Appointments:  18,557
• Percentage of Leads Resulting in Appointments:  31%
• Total Sales:  12,440
• Percentage of Appointments Resulting in Sales:  67%
• Estimated Total Number of Employees:  1,659
• Average Territory Size (by Designated Household):  65,384

Bottom Third Reporting Businesses by Revenue

• Total Number of Reporting Businesses:  66
• Total Actual Gross Revenue:  $30,880,210
• Average Gross Revenue:  $467,882
• Number Above Average:  30
• Percentage Above Average:  45%
• Median Gross Revenue:  $472,460
• Highest Gross Revenue:  $649,060
• Lowest Gross Revenue:  $83,851
• Total Customers:  14,342
• Average Price Per Clean:  $117.86
• Total Number of Cleans:  252,825
• Average Cost of Goods Sold (“COGS”):  67%
• Average Weekly Customer Loss:  1.62%
• Total Estimate Leads:  48,093
• Total Estimate Appointments:  15,048
• Percentage of Leads Resulting in Appointments:  31%
• Total Sales:  9,350
• Percentage of Appointments Resulting in Sales:  62%
• Estimated Total Number of Employees:  1,012
• Average Territory Size (by Designated Household):  55,497

• COGS generally includes expenses for direct labor (but not management salaries or owner draws because these amounts are part of overhead expenses), payroll taxes, workers’ compensation and general liability insurance, cleaning supplies, mileage, and royalties payable to the franchisor from the Reporting Businesses.

• COGS does not include overhead expenses such as advertising and Local Marketing requirements, rent expense (approximately $1,200 to $2,000 per month), telephone expenses including mobile phone and internet (approximately $250 to $350 per month), manager salaries or owner draws, employee advertising (approximately $300 to $500 per month), and the like.

• In addition to the costs disclosed in this Chart, you will incur a weekly Local Marketing Spend.

• These numbers are based on information submitted to the franchisor by Reporting Businesses through TCA IQ 2020 fiscal year.

• The Reporting Businesses had territories ranging in size from 34,553 to 293,989 designated households at the time of signing their respective Franchise Agreements with the franchisor.

Part 2 – Cleans by Clean Type

• Part 2-A below reports on the total number of cleans performed by the Franchised Businesses reported in Part 1 above for the 2020 fiscal year. A one-time only clean is work performed for a specific one-time only request and recurring cleans are those cleans performed on a more than single, one-time only basis by a customer.

• Part 2-B reports the Part 2-A information as a percentage of the type of clean based on the total number of cleans described in Part 2-A using the same group of Franchised Businesses.

A. 2020 Number of Cleans by Type

• Recurring Cleans:  1,546,926
• One-Time Only Clean:  15,277
• Total Cleans:  1,562,203

B. 2020 Cleans by Type as a Percentage of Total Cleans

• Recurring Cleans:  99%
• One-Time Only Clean:  1%
• Total Cleans:  100%

• Some outlets have earned this amount. Your individual results may differ. There is no assurance that you will earn as much.

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