The truth about Jani-King, Jan-Pro, etc...
To be honest they all virtually run the same. Going with one over the other is just a matter of how much more fees you will pay because of their "name brand recognition". The reality is this. They will take almost all of your profits every month (20% of the contract you will be servicing or higher ) and leave you with pennies at the end of the month. Not only that, but they make you purchase a franchise. They actually make you pay thousands of dollars for training & "guaranteed contracts", the more you pay the more business they will provide (allegedly). They should be paying you to take on these awful accounts they give you!!! Mostly, they prey upon poor families looking to own a piece of the American Dream and trick you into believing it is a good investment. People invest their entire savings into this dream (more often nightmares). But, the only way these franchises can be profitable is if you have slave labor (you will be the slave in most cases). Working 5-7 days (mostly graveyard shifts) a week, with no vacation. Sound like fun? Not to mention what the work actually requires you to do. It is extremly hard, smelly, grotesque work. Not for the wimps that for sure.
Here are some facts:
1) Regardless of the lies you will be told, they are struggling to get new accounts to give new franchise owners. You will be told stupid taglines like "the dirt doesn't stop at the door, businesses need to be cleaned". Although it is true that businesses need to be cleaned, but unfortunately there are more cleaning companies and franchise owners then businesses that need cleaning. Most of the profits that you would like to make are taken away from you in order for them to get the contract in the first place. The margins are so thin that you will be working for minimum wage just to stay "profitable". They don't stop taking in peoples money to buy more franchises just because they don't have business to give them. The reality is that you will most certainly get an old account that is being transferred from another franchise owner. These accounts more often than not have business owners that are ready to terminate the agreement due to poor service, complaints, irrational business owners that are impossible to please. They are so fed up that it is impossible to save the account. They are simply waiting for the contract to expire in most cases (although you will be told if you work hard, you can save the account, which can happen but is not the norm). A lot of time they come from other franchise owners that turn in the accounts because they are unprofitable. Reminds me of a pyramid scheme to be honest.
2) They purposefully offer you accounts that you will not be able to service because it is too far away (by offering you an account which you don't except regardless of your reason, it meets their contractual agreement to offer you an account within their set time frame, once they have offered you an account, they are no longer obligated to get you more business within any set period of time. Meaning they still owe you more accounts, but there is no time frame in which they have to get you the business once they have offered you enough contracts to cover the amount you purchased (if you are promised $3k a month and are offered a $1500 which you can't service for what ever reason, now they only have to get you $1500 within the time frame that was promised. So if you accept another account they offer for $1500, they now have as much time as they like/need to get you the remaining $1500 they still owe you. Which you may never see! So knowing this, they will purposefully offer you accounts hundreds of miles away that they know you will decline just to fulfill their "end of the bargain". Doesn't sound like too good of bargain for the franchise owner though. Not only that, they will offer the same account to as many franchise owners as possible before it finally gets assigned after they receive as many no's as possible. You will be lied to and told that this doesn't happen. This is a fact though, it happens every day.
3) Labor Costs account for 50-70% of the accounts that you will be servicing. Equipment rental/payments account for roughly another 15%. If you have any financing when you purchase your business that will account for another 10-15%. You will always have 20-22% of your contract value going to the company every month (for example, Jani-King is 22%) You will most likely have to pay off your equipment/supplies that you recently purchased that will account for pretty much the rest of the contract leaving you with nothing. It will take you about 20 hours a week (4 hours a day, 5 days a week) to service every $1000 in contracts that they offer you. Meaning that 1 person can do a maximum of $4000 a month. This is assuming you can work a 16 hr grave yard shift everyday. Which usually isn't possible since most businesses are usually open 7am-5pm. They want to show up to a clean facility and don't want cleaning people there during normal business hours. Which means you normally have from about 6pm - 6 am to clean (only 12 hours). There are some exceptions (restaurants, bars, etc..), but this is generally speaking... So the reality is you can probably service about $3k by yourself, then you will need to hire people to help you (costs go up tremendously at this point). You need to buy more equipment, more expenses, more management... Thinner margins. At the end of the day, you will probably see about 10-15% profits if you are an excellent franchise owner. That means if you want to make about $4k a month, you need to be billing about $30k a month. You will need multiple crews with lots of equipment and supplies for each crew. Not to mention, what are they going to be driving? Who pays for fuel, insurance, etc.?
4) New large accounts will not go to a new franchise owner. They do not want to take a chance on losing new accounts, so they will assign them to existing franchise owner with a good work history (or the one that greases the wheel the best). So if you fork out the money to buy a franchise that guarantees you over ten thousands dollars in monthly contracts you will most likely have a bunch of small accounts. They will offer you accounts all over "your territory". Imagine starting a new crew just to service $1000 a month! Or a $500 contract for that matter! In fact, they will give themselves over a year to fulfill their contractual agreement to get you that business. They can offer you contracts that only bill $195 a month. Imagine the logistics in trying to manage 20 of those! They say this will never happen and most the time it wont, but it could. In fact, they might just keep offering you small accounts because they know you will decline them. They will add up and eventually their "contractual agreement" will be fulfilled.
5) The Director of Franchise Sales job is to make this investment sound as great as apple pie. If you work hard you can succeed like all these other franchise owners (most franchise owners are not happy nor have they succeeded. Although there are some!). They will show you Entrepenuer magazine or what ever their highest ranking is and say "look here, see we ranked #7 out of all franchises to own"... We are the best low investment franchise, these people think we are so great.. Blablabla. They will tell you that you will be offered new accounts that are close to your home. "We always try to find the nearest franchise owner to the business. If they don't want it, we offer it to the next closest, etc... Now technically we can offer you business anywhere in our territory." They most likley fail to mention that some territories are hundreds of miles from one end to the other, covering multiple counties (It's in their FDD so that's how they get around it) . If you take traffic into account, you could be several hours from your home. Refer back to my point #2. They do this on purpose because they are lacking new accounts! You will be told that there is plenty of business and you can always bring in new accounts or you can buy more contracts if you want to expand your business (which of course you will be paying 22% to the corporation every month, regardless of if you bring in the business or if they provide you the accounts).
6) You must purchase and operate under an LLC or Corporation. Sounds great right? Well, this is just one more expense. You will pay about $800 a year on top of the money it takes to file the paperwork with your state. Figure another $500. You will have to file separate business taxes which is also an additional expense every year if you use a CPA.
The bottom line is that they feed on people coming in with the dream of being business owners. They make it sound great because you can invest as little as $3000 and own your own business (not true by the way). You have to buy equipment, start an LLC, etc... What eventually happens is that people will be offered small accounts. They will start to service them and be offered more accounts (most of which are impossible for them to service since they are so far away). So here they are sitting on a $1000 a month contract that they service every month. Almost $700 a month of which is being taken to pay your fees to the corporation leaving you with about $300 a month. It cost you more in fuel to get to most of the business than you make in cleaning them! You will continue to ask for more accounts which they will never give to you (unless you are very lucky, it does happen from time to time). You will be told to go out and get your own accounts if you are sick of waiting. "We already offered you this account and you turned it down. We met our contractual agreement. Go get your own business!!!" So you continue struggling to service the small account you are given, most of the time working for less than minimum wage in hopes that one day you will get the additional business that you were promised. Eventually, you tire of waiting for the account and turn in the account you were servicing. Which then gets transfered on to the new sucker and the viscous cycle continues. The fact is, the people that are making money in this business are the ones that take 22% of your blood and sweet every month. They sit in their mansions, yachts and fly around on their Gulfstreams laughing at all the money they are rolling in, as people pour everything they own into this industry to try and put food on their tables. It's really sad if you think about it.
If you still want to invest in this industry knowing the facts, I wish you the best of luck. Not too many people have what it takes to make it. It can be done, but you will need a lot of luck on your side. When all else fails, you may need to bribe someone to get you the extra business you need!
