Should you invest in a residential cleaning franchise?
If you use current market trends and reports, the answer will be a big YES.
The cleaning franchise industry is looking promising. (Yes, COVID, we know you helped boost the demand for cleaning services.) More homeowners want cleaner and safer homes, and more businesses are concerned about workplace hygiene and wellness.
Thanks to this uptick in demand, several global market research and business experts have projected that the Home Cleaning Services industry will grow at a CAGR (Compound Annual Growth Rate) of 9.6% by 2026 and will be worth US$10 billion. In 2020, it was valued at US$5.6 billion.
In Canada, the CAGR for 2022-2026 for the Household Cleaners segment is expected to grow annually by 3.99% (statista.com). And according to the industry and market research database firm IBISWorld, the Janitorial Services market in Canada in 2022 will have $9 billion in revenues.
Now, even if the numbers do look great, you should still take the necessary precautions and do your homework before fully committing to buying a cleaning business franchise. After all, it requires a substantial amount of your hard-earned money as an investment, as well as precious time and personal dedication to ensure your residential cleaning business franchise succeeds.
Franchising: What is it?
If you are entering a highly competitive industry, like residential cleaning services, franchising is a good option to start a business within that market.
This strategy allows a franchisor (a company or business owner) to expand their business by selling the rights to their name and idea to a franchisee (another person or business).
Investopedia describes this:
“The franchisee buys this right to sell the franchisor’s goods or services under an existing business model and trademark.”
The franchisee has to pay a fee to buy this right and to get a franchise, as well as royalties based on sales. The franchisee will usually run the franchise in a new local market/location; therefore, the franchisor can widen its reach.
At this point, it may seem like the franchisor is getting the better end of the deal. But franchisees get to enjoy many advantages too.
As an entrepreneur joining a very competitive market, franchising gives franchisees an advantage since you gain access to an already established brand. The business will already have earned a reputation among customers, so you don’t have to worry about establishing your name and getting your product out there.
Plus, most franchisors also provide you with an existing business model, training, supplies, and other forms of support to ensure you get your franchise moving and start earning as efficiently and successfully as possible.
Popular Types of Franchises in Canada
Franchising contributes more than $100 billion to Canada’s economy each year and is the 12th largest economic sector in the country.
Franchise Direct lists the top 50 largest franchises in Canada (2020), with Tim Hortons garnering the top spot. The list includes brands from the food industry, auto, accounting and financial, convenience store, real estate, retail, travel, and – that’s right – cleaning.
As previously stated, the cleaning franchise industry in Canada is growing thanks to the surge in demand for cleaners in both the commercial and residential sectors.
Would it be better to invest in the former or the latter as a first-time franchise owner?
Commercial vs. Residential Cleaning Franchise
The cleaning franchise industry has three main sectors: commercial, residential, and specialized. Today, some commercial and residential cleaning companies also provide specialized cleaning services such as carpet cleaning, junk removal, and disaster cleaning and restoration.
It is best to know beforehand what type of cleaning services a cleaning company franchise provides, so you are fully aware of the scope of services you are expected to provide as a franchisee.
Would it be better to buy a commercial cleaning company franchise or a residential cleaning business franchise? Both have their pros and cons, so it will ultimately boil down your needs and preferences as a cleaning business franchise owner and operator
Factors to Consider
Commercial Cleaning Franchise
Residential Cleaning Franchise
- How much money can you afford to invest?
- Can cost from a couple of thousand to hundreds of thousands of dollars (depending on the franchise you are buying, the size of the territory, business requirements, etc.).
- Can cost from a couple of thousand to hundreds of thousands of dollars (depending on the franchise you are buying, the size of the territory, business requirements, etc.).
- How big of a crew can you manage?
- Requires a bigger crew since you will be handling bigger properties.
- You can operate with a smaller crew.
- What sort of work hours do you prefer?
- You usually work at night or after business hours.
- You usually work during daytime.
- What type of cleaning services do you want to offer?
- You might need certain special equipment to get cleaning jobs done faster and more efficiently.
- You can start servicing customers even with just basic cleaning supplies and equipment.
- What kind of cash flow do you need?
- You need to have enough funds to initially cover the overhead and operational expenses because you tend to wait for payments longer. This is because you have to wait until the company/business releases your payment depending on their accounts payable system (which could be a waiting period of one month or more).
- You can have better cash flow since residential cleaning clients usually pay cleaners during service.
Why choose a residential cleaning franchise?
- Since we have already discussed the basic differences between residential and commercial cleaning franchises above, here we will focus on the general advantages of buying a residential cleaning company franchise.
- A steady demand in the market for cleaning services.
- An opportunity to own and operate your own business.
- An existing business model that is tried and tested.
- A franchise comes with many business services already provided by the franchisor, such as training, marketing/advertising, customer service representatives, and online management systems. Life Maid Easy gives you all of that, plus more! Check out our franchise opportunities here and discover how you can be part of our award-winning cleaning company.
Things to Consider When Franchising a Residential Cleaning Company
- Tips
- It’s best to invest in a reputable residential cleaning company with an established industry name.
- Find out if the cleaning franchise provides a business vehicle with the company name and logo. You get transportation and advertising in one.
- Realistically assess if a cleaning business franchise is the best option for your current finances and your business/work style. While the structure of a franchise may work for some, it can be quite challenging for those who prefer more flexibility and creativity.
Dos and Don’ts
Do’s
✓ Research the brand/company and read customer reviews.
✓Talk to other franchise owners about their experience with the franchisor and their business’s profitability.
✓ Ask if you will have exclusive rights to a designated territory.
✓ Inquire about all the costs, services, support, supplies, training, etc., included in the contract.
Don’ts
✗ Assume it is okay to use your own cleaning products. Some cleaning companies are particular about maintaining a certain quality and brand. For example, they could be using only natural and eco-friendly cleaning products.
✗ Forget to ask about who will shoulder the costs for cleaning equipment repairs and upgrades.
✗ Miss the opportunity to ask how you can grow your business. Will you be allowed to buy multiple locations when you are ready to expand?
✗ Neglect to inquire about the terms and conditions if you need to sell your territory.
✗ Hesitate to get advice from experts. You may be buying a business with almost everything in place, but you still need to fully understand the ins and outs of the business model and operations and ensure you have a clear picture of the expenses involved in running the franchise.
Residential Cleaning Franchise Checklist
✓Get expert and legal advice before signing a Franchise Disclosure Document (FDD). Read all the details of the document and make sure all fees are disclosed by the franchisor.
✓ Make sure you fully understand how the franchise costs operate so you can realistically compute your expenses, forecasted growth, and profits.
✓ If you plan to let someone else operate the franchise on your behalf, inquire with the franchisor if that is allowed. They might require some background checks and training.
Cleaning Business Franchising Can Be a Bright Future For You Too
Many current trends are boosting the growth of the residential cleaning industry in Canada and across the globe. More households have more disposable income but less time to clean their homes. But because these homeowners are also more particular about maintaining their homes’ cleanliness and safety, they rely more on household cleaners.
This uptick in demand is good news for residential cleaning business franchise owners, and understandably hopeful entrepreneurs want to jump on this opportunity. Make sure you take your time to do your homework and realistically assess if you are ready to take on the risks of owning a cleaning company franchise.
Life Maid Easy is here to assist you with any questions or concerns you have in deciding how to best proceed with your residential cleaning business franchise investment.