Pros and Cons of a Franchise vs. Company-Owned Janitorial Business

Before addressing this inquiry, it's worth noting that we have accumulated 30 years of experience in the janitorial industry, during which I've been involved with both company-owned and franchising systems.

One pervasive challenge in the janitorial sector is the high turnover rate among staff. It's not uncommon for janitorial employees to depart within a mere 3 to 6 months of starting the job. This phenomenon affects both franchising and company-operated janitorial businesses.

After factoring in the time, financial resources, and effort invested in training each individual, this recurring turnover represents a significant ongoing expense for businesses. Furthermore, it has a detrimental impact on end users, such as individuals or companies relying on these services. With a constant influx of new personnel, maintaining a high level of quality and consistency becomes challenging, which is a key expectation of most facility owners.

One notable advantage of company-owned operations in this scenario is the flexibility it offers in staffing. Hiring and terminating employees is more straightforward because employment is typically at-will, and there are no long-term contracts involved.

In contrast, the process of signing or terminating a franchise is intricate, as it entails committing to a multi-year agreement and often assuming a promissory note with the franchisor. Consequently, a franchising system must establish an effective vetting process for potential franchisees.

Conversely, one of the strengths of franchising lies in achieving a certain level of staffing consistency. Once a franchisee signs on, they commit to working with the franchisor for at least 3 to 5 years, if not longer. Given that they often directly supervise their cleaning crews or perform the cleaning themselves, they can generally maintain a higher level of consistency compared to managers of company-owned firms who experience similar turnover rates as their employees.

This can be a significant benefit for facility owners, as it implies that the individuals cleaning their building are more likely to possess expertise, given the potential for more consistent and thorough training. The longer a person remains with the franchise, the more knowledge and value they contribute to the service they provide.

Another notable advantage of franchised companies is that franchisees gain access to a comprehensive network of essential support services, including sales, advertising, customer service, and accounting. This support enables them to focus more on service delivery and less on administrative tasks.

Nevertheless, joining a franchise can prove to be a poor decision if you align with the wrong franchisor. Some franchisors are primarily driven by profit and lack the systems needed to attract and nurture strong franchise candidates. They have low criteria for selecting franchisees, offer minimal training, and operate on narrow profit margins. In such cases, opting for a franchise can indeed be a poor choice.

That being said, I firmly believe that poorly managed company-run janitorial firms are worse than poorly run franchises. There is a phenomenon where individuals experience "entrepreneurial seizures," waking up one day and deciding, "How difficult could it be to run a (insert industry, janitorial in this case) business?"

They often underestimate the level of work and skill required, even with good intentions. In the end, they typically burn out within a few months or years, negatively impacting themselves and their customers, who must then search for replacements when service quality declines or the business is abandoned.

Ultimately, both setups have their pros and cons, but the strength of a company and its services is ultimately determined by its leadership and core values.

A janitorial firm, whether owned and operated by the company itself or through a franchise, will excel if it upholds strong core values because they are the fundamental bedrock of any successful business.

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