Why would I sign a franchise contract that only invoved learniing how to do something?
Way back, part of the advantage would have been the knowledge base and conventions or whatever with other franchisees, which would have been light years ahead of all the localised fragmentation, but the internet gives more of a knowledge base than what say Fish franchisees can learn from each other.
My experience had no McD style systems down to the t, which is what I would expect from a franchise, all the admin systems, marketing systems, operational systems etc all down and laid out for you right down to the infitessimal degree.
Most seem to be very loose, except for the revenue proof and royalty pymt, probably due to all the different personalities, skill sets and business strengths of each individual franchisee. A lot is left up to the franchisee. However, there are some crucial things that one can get locked into as mentioned before.
So to me it seems to come down to if someone wants to “buy” an “operations manager” job and also take all the risk hits that an employee operations manager would not in a corporate setting.
Come to think of it , one is “buying” the whole enchilada of a self employed person, since they will still have to do all the marketing etc. There’s a lot of sweat equity in both, so why pay for it? Then in the case of FIsh, those poor guys don’t even own the accounts or account list THEY created!!! If they pull out, the accounts are Fish’s to give to the next franchisee buyer for that territory! Holy cow! Talk about working for free.
The franchise would have to be the only one ever to offer some guarantees or the franchisee can opt out at any time (right? like we do for our customers, guarantee or don’t pay) if not satisfied
The would have to have some niche that they are the only one and no one else can do or achieve, or buy, or buy at x $ equip, supplies etc.
I think for an independent to even consider a franchise, it would have to offer
- more of a licensing than a franchise, window cleaners are fiercely independent
- 50%+ MINIMUM guaranteed increase in per hour gross - $100 pmh is pretty national standard right now, so they would have to be the ONLY WAY a window cleaner could make $150 plus pmh
- perks - like equipment and supplies (any and all) at ridicuously lower prices than could be found anywhere else if not in this arrangement (like 50% less or something radical)
- other perks - perhaps, office, bookkeeping, phone answerering people - SOMETHING to take the admin monkey of the owner’s back.
- would have to specialize and be dedicated to 10 or less employees, over 10 and you’re a million dollar co anyway and will have middle mgmt, office, ft admin stafff etc by now
- crazy economy of scale for health ins, truck purchasing etc etc.
It would have to be something SO GOOD, everyone is just DYING to get on the waiting list
A franchise arrangement is pretty much the corporate office of say a restaraunt chain, franchise is corp headqtrs and you as the franchisee are the restaraunt mgr spending most your time on HR issues - people, hiring, firing, interviewing etc.
In a huge chain, headquarters is handing down EVERYTHING, BIG marketing, signs every week for the windows, etc etc.
The restaraunt mgr is doing no vision, just execution and maintenance of the vision
What could a window cleaning franchise offer CONSTANTLY and UNIQUELY so that the franchisees would have a fear of disconnection SO STRONG they would never want to leave and GLADLY pay out 10%?
Ok, so you earn $5k/wk week in week out, doing the actual work? I’m not talking about operational leverage remember.
Congrats, if you’re telling the truth. What hourly rate does your work average out to over the course of a month?
Where are you? Tell us more about yourself, show us your company website.
Yes I am fishing for opinions because I have a little experiment I’m rolling out, it’s true, and I’m looking fit input on some very important questions. As far as what I’m considering offering, that’s all top secret right now.
I am curious about your numbers though. You’ve come out f nowhere and are throwing around big numbers so you’ve got my attention. How do you average $1250/day? What’s your secret?
Earning $1,250/day is not hard. Averaging it is extremely hard.
This would be just boring traditional window cleaning, and you’re right, you would eventually be tempted to try and pull it all off on your own. Unplugging from the system would be permissible but would sever your access to ideas, systems and tools that opened your eyes and empowered you in the first place.
I am imagining you would not quickly decide to leave but you always could.
So, your experience was bad.
What if you could earn far more than you do now, but were tied to the franchise? Your description includes bring tied to failures. What if you were tied to a winner?
Because the “how to” stuff would be where all the value lived.
“How to” earn $5k/wk cleaning windows using the tools in your truck right now, in only 40 hours a week is pretty valuable information. Cleaning windows is easy. Making big money cleaning windows is much harder, and rare as a result.
Cool insights.
I like the license idea better, too.
I would disagree that $100 pmh is the national average for window cleaning. I think we all like to pretend that every guy on our crew earns $100pmh but this is actually very rare to find. Show me any window cleaner who has a 4 man crew that averages $100pmh and pulls $3200/day every day, day in day out.
Averages, remember. Not peaks, averages.
I appreciate your opinion, though. That’s all I’m looking for.
Well… I could always buy your book:)
I’ve always considered myself fairly ignorant to the notion of franchising… I’d see the ads in the back of Entrepreneur Magazine and think “hey, I could own this Pizza Hut for $50,000!”
But when you dig beneath the surface, you realize that’s just the point of the tip… of the iceberg.
And that’s when the questions start to come…
[INDENT][INDENT]Do I have the option to ‘opt out’ of Franchisor sales promotions (loss leaders??)
Software requirements? Accounting process? Does the franchisor offer training If processes [U]are[/U] uniform?
Supplier limitations?
Equipment/inventory limitations?
Building requirements? Do I need one?
Décor packages and signage?
Insurance requirements?
Royalties? Percentage of profit/commission? Advertising fees?[/INDENT][/INDENT]
And the most important one… “[B]am I able to work with this Franchisor, [U]and[/U] can I stick to their game plan?[/B]”
The national average as far as what most who have been in this awhile are centering their pricing on. Sure there’s markets and plenty who are at $50 pmh and that might be the high limit for them, or their market or their efficiency level.
But forums, individuals etc, etc - the $100pmh comes up over and over east coast, west coast, north, south - today’s $100pmh is the early 90’s $50pmh - it’s just about where a smaller and especially solo business has to be for a balanced operational equilibrium (sustainable business) in all the major areas - taxes, operations, admin, mktg, owner’s draw, and owner’s 10% profit
Being just 10% off can spell budget troubles in some area
So my opinion, based on where I live and my experience is that $100pmh is what is needed for a sustainable forward moving business to begin with. Am I personally there across the board, not yet and by the time I am $150 will probably be what is needed lol.
But your question is whether $70 to $100 is enough to get someone to want to franchise. It may just come down to whether or not their “freedom” and “independence” is worth about $39k a year increase in revenue, then minus 10% royalties of $13,260 from that and will that $25,000 leftover be lifechanging for them or not from their viewpoint, depending what they are or are not tied to in the franchise agreement. (don’t forget additional fed and state taxes on that 25k too)
What $ will actually end up hitting their pocket?
That 25k could also get eaten up by additional marketing expenses and other things the person isn’t doing now that they would be required/compelled/motivated to do.
That’s what I see anyway IMHO
And if they are already in business the Non-compete clause might put them off by limiting their options to get out.
- $pmh… same thing in lawn care forums, everyone’s a millionaire on the internet.
Numbers are getting crossed here. I don’t make that much. I’ll get back on here after the weekend if the thread is still going.
I should have used the word “Target” - $100pmh is what a lot of folks nationwide are targeting
True - a 4 man crew would not do $3200 a day, day in and day out for even more reasons I have found:
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that would mean 8 billable hours, most work days would have less subtracting driving time
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that would have to be a large job ($800 for one person x 4, is it a big building all 4 are on? is it 4 large custom homes with storms?) yes $800 is out of the ordinary, most jobs end up in the $200 range
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employees usually work at 85-90% what the owner could do, there’s just “slippage” there that can’t be avoided, a solo guy knows what he can squeeze in if something cancels out and do it all on the fly - employees may just drag their feet until 8 hours is up, not call, or if diligent there’s still slippage in time with co-ordination, cals back and forth to each other and perhaps customer too
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if doing smaller jobs (most residential would be considered smaller versus an all day commercial bldg) 2,3,4,5 stops will eat almost 2 hours out of a day leaving only 6+/- billable hours in a day
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All jobs would have to be diligently bid and monitored so that $100 pmh was the minimum for the whole customer base at all times - a feat indeed to keep the whole customer base at any goal
so the way I see it - even if the jobs were perfectly bid for the crews at $100pmh, rather than $3200 a day, I would say they would bring in ($3200 x slower than owner .9; x .75 6 revenue generating hours in an 8 hour work day) = $2160 a day for 4 employees
then averaged out over a year, after vacations, holidays, sick, personal, slow, weather etc is another 15% drop, so now multiply that $2160 x .85 = $1836
so $459 a day per employee would be the end of the line actual 260 possible workday average (5 workdays x52 weeks) that would be realized (deposited in your bank account as gross revenue, minus any bad debts or uncollectable accounts) after reality is accounted for, the way I see it and have experienced it
and this is at $100 pmh starting point for the calculations
so yes, i agree, show me a 4 man operation doing $3200 a day or $832,000 a year, it may be more closer to half that at $477,000 a year
I had read a book awhile back that stated that every mentor relationship falls apart at some point
It was awhile back
but it had all kinds of statistical analysis and case studies etc etc and showed that the one being mentored goes thru several stages, the first one being the student and happily so.
(don’t remember all the stages)
Then at the end, a turning point comes where the one being mentored wants to do things his own way, feels he knows more than the mentor at a certain point and there’s an inevitable clash and then final separation.
(ha, sounds like raising kids)
This talk of franchising reminded me of this since in a way the franchisor is the “mentor”. And at some point, regardless of the initial glee and honeymoon stage, most franchisees attitudes can sour.
The answer is in the details, which as you say are still top secret.
So going on what I have read so far, I don’t see much of an advantage on joining a franchise over taking that same money and sinking it into marketing. Paying someone like you (or paul) to design a marketing plan for me, then I am not beholden to a franchise.
Would you also help with website design and seo?
In response to Kevin’s question to you about making $1,250 a day, by your wording, it looks to me you are saying that you make $3k+ a week, rather than saying you make $1250 a day?
As a side point to my drawn out calculation response, $100pmh for most owners would get them $600+ a day or $3,000 a week, or at least $132,600 a year in revenue after all the mods (holidays, vacation, etc, etc, about 85% of total 5 day, 40 hour week max possible) are multiplied in
The 85% is everywhere, I discovered it in my own stuff and then i saw it stated in an MSN article: the avg american works 1,777 hours per year, which came out to 85.5% of 2,080 hours (260 work days a year (52x 5) x 8)
As self employed people, it’s our responsibility to make sure we aren’t just working 80 hours a week for a “good 40 hour a week income”, That’s why I get into this stuff to compare apples to apples.
The BIGGER question is (not to you Goodfish, just self examination for all): Was $600+ a day achieved in 8 hours INCLUDING driving to the first job and getting back from your last job (to your shop, home office, whatever)? you know, like you’re a UPS employee or something, if not then your giving away your time for free.
I did a spreadsheet and tracked this stuff for years and was horribly surprised. An employee might have an 800 day in way more than 8 hours, all divided out they may end up doing a lot less PMH on the job than it looks like. The revenue is still there (invoiced and deposited), but the efficiency level is out the door poor (overtime, long day, call in sick the next day, or wiped out next day and super slow, whatever, you name it).
In other words, they could have an 800 day, but it took them 12 hours to do it, well, they were only generating $66 pmh or whatever it would end up being.
That is a biggie - a non-compete upon termination of contract, that would “cripple” someone who goes into it with an existing business
You are saying that I would be constantly needing new ideas, new systems, and new tools, in other words I would
forever be dependent on someone else for these things.
In that case I would not want it, and I don’t really believe it either. I don’t want to be dependent on anyone.
Except your customers right?
Being dependent on 300 people is a WHOLE lot different then surviving on the whim of a Franchisor and his contract.
