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CasaDeCabra

  • Posts: 76
Re: whats the true cost of going franchise
« Reply #20 on: April 13, 2014, 09:29:54 pm »
"To be honest the only one that matters is that my wife would have had kittens if I told I was doing it on my own" translates into I would still be working in a mobile phone shop traveling from Southampton to Poole.

Now, yes I pay 20% but earn more than I did  for working 2 days less a week and see my wife as I was working every weekend and she works M-F. Good enough explanation, or do you want to know more?

HampshireWindowCleaning

  • Posts: 601
Re: whats the true cost of going franchise
« Reply #21 on: April 13, 2014, 09:33:32 pm »
"To be honest the only one that matters is that my wife would have had kittens if I told I was doing it on my own" translates into I would still be working in a mobile phone shop traveling from Southampton to Poole.

Now, yes I pay 20% but earn more than I did  for working 2 days less a week and see my wife as I was working every weekend and she works M-F. Good enough explanation, or do you want to know more?
Yes I can fully understand this, but once you've been doing this a while and feel like you know the business well will you not start to resent having to pay the franchise fee?

CasaDeCabra

  • Posts: 76
Re: whats the true cost of going franchise
« Reply #22 on: April 13, 2014, 09:38:01 pm »
Doesn't matter if I do as without it I'd still be in Poole.

Perfect Windows

  • Posts: 4179
Re: whats the true cost of going franchise
« Reply #23 on: April 13, 2014, 09:49:36 pm »
Not trying to answer for Jake but we've recently agreed that his target turnover is going to increase significantly (he wants to work four full days a week rather than three nearly full).  So what's Jake going to have to do to increase his turnover by over a third?  The first cleans - nothing else.

As for the fee, franchisees three and four decided to look at setting up on their own after talking to me.  Then realised that even taking off the percentage they pay to me, they couldn't see themselves getting the prices I charge.

My three franchisees have come out of very steady jobs and the risk of doing it themselves has been removed completely.

What you all need to bear in mind is that, by definition, the people on this forum are pretty much all people who thought about starting up a business then went ahead and did it.  That makes you unusual.  You might not think so but you are not average.  Try to put yourself in the shoes of someone in a steady, decently-paid job who is thinking about starting up.  When people like that post on here the most common advice is "don't"!  Buying a franchise is a way of making the jump possible.

Vin

HampshireWindowCleaning

  • Posts: 601
Re: whats the true cost of going franchise
« Reply #24 on: April 13, 2014, 09:59:46 pm »
Very true, at your prices Vin your franchisee's are probably making more than I do even after paying their 20%  ;D

Perfect Windows

  • Posts: 4179
Re: whats the true cost of going franchise
« Reply #25 on: April 13, 2014, 10:05:46 pm »
Very true, at your prices Vin your franchisee's are probably making more than I do even after paying their 20%  ;D

Do you want one, then?  Think of all the stress you'd be giving up...

Vin

HampshireWindowCleaning

  • Posts: 601
Re: whats the true cost of going franchise
« Reply #26 on: April 13, 2014, 10:11:37 pm »
Very true, at your prices Vin your franchisee's are probably making more than I do even after paying their 20%  ;D

Do you want one, then?  Think of all the stress you'd be giving up...

Vin
No ta mate, I thrive on the stress  ;D

Infact I'm at the point of being so busy that employing/franchising has crossed my mind so just interested in finding out why people would rather get a franchise or work for a window cleaning firm as apposed to setting up on their own.

Clever Forum Name

  • Posts: 5942
Re: whats the true cost of going franchise
« Reply #27 on: April 13, 2014, 10:12:41 pm »
I get why people are asking why franchise.....

Its the same reason we have employees and employers. Some people haven't got it in them and need a helping hand.

i think franchising is a good idea.

Ian Lancaster

  • Posts: 2811
Re: whats the true cost of going franchise
« Reply #28 on: April 14, 2014, 08:45:11 am »
Hi all, Lise and I are away in our motorhome at the mo. (One advantage - business running without our constant attention) I'll post a comment in a couple of days when we get back.

Pete Thompson

  • Posts: 960
Re: whats the true cost of going franchise
« Reply #29 on: April 14, 2014, 12:40:08 pm »
Quote
I know you'll say door knock but after a 60 hour week that's going to take forever. I wouldn't do it if I though I was taking advantage of people. I see it as I am helping them by using my skill that they just don't have themselves.

Ok now, you say 60 hrs a week on the minimum wage.  That's £6.50 x 60 = £390 per week or £1690 per month after tax which equals  £25,600 before tax.  SO to be in the same position window cleaning, he wil have to earn £25,600/12 = £2,133 per month before tax.



If I was starting out now, from a full-time job, assuming I had no savings, this is what I would do.

1: Get a bank loan for £13,000 over 5 years (repayments would be £242 per month with tesco)

Get a decent second hand van, nothing fancy, say a Berlingo or similar - £2,200
Get a decent system, say a 400 litre Pure2o (as that's what I've got) - £2,934 (incl vat and fitting)
Get a decent pole, say a 35 footer - £400
Get a hose reel and some hose £70
Get the remaining few fittings etc £50
Get some flyers printed - £100

So that's all the equipment you will need for £5,754

So I now have £7,246 left over.

Because I need £2133  per month to live + the £242 loan repayment, that money will last me just over 3 months, say 13 weeks.

So in 13 weeks I will need to canvass at least £2,375 worth of work.  Thats £182 of new business per week.

Say an average customer is £10, thats 18 new customers per week.

Say I'm out canvassing 6 days a week (easy peasy for a bloke who was previously working 60 hours a week), thats only 3 new customers per day. EASY.

AND this doesn't take into account that during those 13 weeks I would be paid for the work I had canvassed.  After reaching this target of £2,375 per month, that is only about 3 days a week at a slow pace, so there's still plenty of canvassing to do to earn more money.

I bet with a franchise you still have to buy your own van and system too.

All I'm saying is, rather than pay for a franchise, a much better way is to simply take a loan out to live on while you build up enough work.  

IMO the only people who benefit from franchises are the franchise owners who take 20% of the poor mugs money year after year for dong nothing that they couldn't have easily done for themselves.

C o z y

  • Posts: 7775
Re: whats the true cost of going franchise
« Reply #30 on: April 14, 2014, 01:00:58 pm »
If you look closely on the posts just on this forum, you'll notice that people actually pay canvassers to knock doors. These people are just as afraid of rejection as you might be of actual physical violence. They can't go knocking and getting 3 customers a day. If it were that easy to pick up customers, you wouldn't see the problems that get discussed on here, because everyone would have enough work. They haven't got enough work, or they wouldn't put up with the crap they get and post about on here.

I understand what you're saying, that YOU would rather build it yourself, but people aren't all like you and I. You've made a valid point about how it can be done, and I agree with you. However, we're all different, and a ready to go, supported venture is a very good way for some people to get into what we see as a relatively simple business.

Imagine if the only way to run this business, was to re-invent the wheel and make all the same mistakes and lose time and money learning, when you can just get 100% support and physical and pro help from someone until you're able to run it yourself. Vin and Ian get well priced work for the punters, so the 20% is covered IMO. Reading some of the stuff posted on here, I'd bet that these new guys are pretty happy with the deal they get.

Let's wait and see if any of Ian's or Vin's guys come on here complaining in the future.
No still don't understand, I must be thick

G Griffin

  • Posts: 40745
Re: whats the true cost of going franchise
« Reply #31 on: April 14, 2014, 01:02:13 pm »
I get why people are asking why franchise.....

Its the same reason we have employees and employers. Some people haven't got it in them and need a helping hand.
True. We're not all the same. Some are not cut out for being self employed and some couldn't face being employed. A franchise is somewhere in between. You get to be your own boss but with a lot of help.
It's hard, sometimes, to see it from someone else's position.  DIY is not for everyone.  
⭐⭐⭐⭐⭐⭐

gary999

  • Posts: 8156
Re: whats the true cost of going franchise
« Reply #32 on: April 14, 2014, 06:10:48 pm »
If you look closely on the posts just on this forum, you'll notice that people actually pay canvassers to knock doors. These people are just as afraid of rejection as you might be of actual physical violence. They can't go knocking and getting 3 customers a day. If it were that easy to pick up customers, you wouldn't see the problems that get discussed on here, because everyone would have enough work. They haven't got enough work, or they wouldn't put up with the crap they get and post about on here.

I understand what you're saying, that YOU would rather build it yourself, but people aren't all like you and I. You've made a valid point about how it can be done, and I agree with you. However, we're all different, and a ready to go, supported venture is a very good way for some people to get into what we see as a relatively simple business.

Imagine if the only way to run this business, was to re-invent the wheel and make all the same mistakes and lose time and money learning, when you can just get 100% support and physical and pro help from someone until you're able to run it yourself. Vin and Ian get well priced work for the punters, so the 20% is covered IMO. Reading some of the stuff posted on here, I'd bet that these new guys are pretty happy with the deal they get.

Let's wait and see if any of Ian's or Vin's guys come on here complaining in the future.

Impressive post cozy!

From a scouser living in germany aswell :o.thought i had seen it all ;D

Dave Willis

Re: whats the true cost of going franchise
« Reply #33 on: April 14, 2014, 06:34:40 pm »
Quote
I know you'll say door knock but after a 60 hour week that's going to take forever. I wouldn't do it if I though I was taking advantage of people. I see it as I am helping them by using my skill that they just don't have themselves.

Ok now, you say 60 hrs a week on the minimum wage.  That's £6.50 x 60 = £390 per week or £1690 per month after tax which equals  £25,600 before tax.  SO to be in the same position window cleaning, he wil have to earn £25,600/12 = £2,133 per month before tax.



If I was starting out now, from a full-time job, assuming I had no savings, this is what I would do.

1: Get a bank loan for £13,000 over 5 years (repayments would be £242 per month with tesco)

Get a decent second hand van, nothing fancy, say a Berlingo or similar - £2,200
Get a decent system, say a 400 litre Pure2o (as that's what I've got) - £2,934 (incl vat and fitting)
Get a decent pole, say a 35 footer - £400
Get a hose reel and some hose £70
Get the remaining few fittings etc £50
Get some flyers printed - £100

So that's all the equipment you will need for £5,754

So I now have £7,246 left over.

Because I need £2133  per month to live + the £242 loan repayment, that money will last me just over 3 months, say 13 weeks.

So in 13 weeks I will need to canvass at least £2,375 worth of work.  Thats £182 of new business per week.

Say an average customer is £10, thats 18 new customers per week.

Say I'm out canvassing 6 days a week (easy peasy for a bloke who was previously working 60 hours a week), thats only 3 new customers per day. EASY.

AND this doesn't take into account that during those 13 weeks I would be paid for the work I had canvassed.  After reaching this target of £2,375 per month, that is only about 3 days a week at a slow pace, so there's still plenty of canvassing to do to earn more money.

I bet with a franchise you still have to buy your own van and system too.

All I'm saying is, rather than pay for a franchise, a much better way is to simply take a loan out to live on while you build up enough work.  

IMO the only people who benefit from franchises are the franchise owners who take 20% of the poor mugs money year after year for dong nothing that they couldn't have easily done for themselves.

Who's going to do 60 hours a week on windows?

£2375 a month is only £28500 before stoppages per year - crap to be honest.

It suits some but not others.
If you come out of a steady secure job with a lump sum, you have no experience of self employment or the stress of finding work. A franchise is a great way to step out of one job straight into another with minimal stress. He's got to earn more than he did before when he was employed to run a business and get earning quickly.

I didn't need to do it but I can see both sides.

C o z y

  • Posts: 7775
Re: whats the true cost of going franchise
« Reply #34 on: April 14, 2014, 06:45:37 pm »
If you look closely on the posts just on this forum, you'll notice that people actually pay canvassers to knock doors. These people are just as afraid of rejection as you might be of actual physical violence. They can't go knocking and getting 3 customers a day. If it were that easy to pick up customers, you wouldn't see the problems that get discussed on here, because everyone would have enough work. They haven't got enough work, or they wouldn't put up with the crap they get and post about on here.

I understand what you're saying, that YOU would rather build it yourself, but people aren't all like you and I. You've made a valid point about how it can be done, and I agree with you. However, we're all different, and a ready to go, supported venture is a very good way for some people to get into what we see as a relatively simple business.

Imagine if the only way to run this business, was to re-invent the wheel and make all the same mistakes and lose time and money learning, when you can just get 100% support and physical and pro help from someone until you're able to run it yourself. Vin and Ian get well priced work for the punters, so the 20% is covered IMO. Reading some of the stuff posted on here, I'd bet that these new guys are pretty happy with the deal they get.

Let's wait and see if any of Ian's or Vin's guys come on here complaining in the future.

Impressive post cozy!

From a scouser living in germany aswell :o.thought i had seen it all ;D

OI! Watch it banjo boy  ;D
No still don't understand, I must be thick

hasti

  • Posts: 498
Re: whats the true cost of going franchise
« Reply #35 on: April 14, 2014, 07:02:59 pm »
Not trying to answer for Jake but we've recently agreed that his target turnover is going to increase significantly (he wants to work four full days a week rather than three nearly full).  So what's Jake going to have to do to increase his turnover by over a third?  The first cleans - nothing else.

As for the fee, franchisees three and four decided to look at setting up on their own after talking to me.  Then realised that even taking off the percentage they pay to me, they couldn't see themselves getting the prices I charge.

My three franchisees have come out of very steady jobs and the risk of doing it themselves has been removed completely.





What you all need to bear in mind is that, by definition, the people on this forum are pretty much all people who thought about starting up a business then went ahead and did it.  That makes you unusual.  You might not think so but you are not average.  Try to put yourself in the shoes of someone in a steady, decently-paid job who is thinking about starting up.  When people like that post on here the most common advice is "don't"!  Buying a franchise is a way of making the jump possible.

Vin




Very well said vin  :)

robbo333

  • Posts: 2419
Re: whats the true cost of going franchise
« Reply #36 on: April 14, 2014, 07:23:47 pm »
I would never use a franchise, but I think they are good.
If you've got all that experience, then why not pass it on to someone else...at a cost. It's only fair you get something for it.
Some people like the 'comfort' of having a 'security factor' with kids to feed etc, knowing they can have a guaranteed income (but at a price).
Providing everyone knows what the deal is and everyone is happy then I don't see the problem.
We've all been there, we've all done it, and we've all got the 'T shirt', (actually polo shirt in my case!) but when you're new then it's quite a daunting thing to do.
Time for another glass of red  ;D
"Thank you for calling: if you have a 1st floor flat, mid terraced house, lots of dogs, no parking, no side access, or no sense of humour, please press hold!
For all other enquiries, please press1"

Ian Lancaster

  • Posts: 2811
Re: whats the true cost of going franchise
« Reply #37 on: April 14, 2014, 09:09:16 pm »
I think Vin and Jake have probably covered all the points raised at least as well as I could have done myself, so I'll just try to give my thoughts on some of the direct questions.

BOB PLUM
i understand the initial cost of buying from Ian Lancaster, £1,500 but what other cost would then be involved in trying to franchise my rounds/ work
And not just the monetary value but what other practical things do you need to do

Many thanks


To deal with the monetary costs first:  Assuming you are at the stage of having a successful 'one man band', you need to attract and appoint a suitable Franchisee.  If you're lucky, this could be someone you know and trust already, so no cost involved.  If not you need to advertise.  When I advertised for my first Franchisee it cost me about £800 for a three week insertion in our local paper.  When my first Franchisee signed his Agreement and paid his Initial Fee (at that time, £3,500) I got my £800 back.  From then on all costs were from Franchise Fees, I didn't have to put in another penny of my own.

As to 'other practical things' - my package runs to hundreds of pages of documents, step by step guides, 'how to' instructions, examples of business plans etc etc.....

One thing you will need is time.  You need to train your Franchisees, organise their equipment, uniform, van signage etc.  From each Initial Franchise Fee I pay myself £1,000 to cover for a week of my time doing all the above.

MATTY LOGAN
Hello Bob. How would it work with a franchise on domestic properties, that could cancel at the drop of a hat. There's no legal obligation to stick with your window cleaner.
Even with commercial work, contracts these days are worth the paper there on. I have experienced both sides to taking work off someone who had a contract with the company. I have also seen companies have contracts ripped up when they have adhered to all within, the contract.
Seems like one of those u can invest and have carpet pulled from under your feet.


Obviously you have no control over the customers, they have the right to choose who they want.  In Franchising it is the same as for a Sole Trader - your Franchisees will lose customers as they cancel.  But they will pick up new customers exactly as you would so on balance their rounds remain stable or gradually increase.

MICK KENT
I too cant get my head around a window cleaning franchise id love a subway or mcdonalds franchise as custom will always come to you but as for windows its more limited, id never trust anyone enough to not do me over so window cleaning franchise isnt for me.
Vince seems to know his stuff as does ian lancaster, im sure ian will give a decent understanding reply to the question.


Window cleaning Franchises are exactly the same as any other.  The Franchisee buys a licence to trade under your name and to your proven system.  The customers are the Franchisors, if the Franchisee breaches his Agreement it can be terminated and all customers revert to the Franchisor.  The Agreement is a legally binding document and if the ex Franchisee were to simply carry on trying to service the customer base, the Franchisor can sue.  (As opposed to the employer who can't stop an ex employee from taking his customers)

HAMPSHIRE WINDOW CLEANING   
What about the fact that if you had done it yourself you would be earning 20% more per year doing the same hours, I think this is the bit that people including myself struggle to understand so please explain.


As others have said, if you are the type who is happy to start from scratch, build your own customer base without any help then you are not going to buy a Franchise.  Franchisees are people who want to own their own businesses but lack the courage/self belief/motivation to go it alone, prefering the security and help of an experienced and successful mentor.

HAMPSHIRE WINDOW CLEANING
Yes I can fully understand this, but once you've been doing this a while and feel like you know the business well will you not start to resent having to pay the franchise fee?


Quite probably.  In which case the Franchisee can either resign his Franchise or sell it.  With his new-found knowledge he can now go and start his own business from scratch.  But don't forget his customer base was built for him and he is used to a comfortable guaranteed income.  Starting with nothing is a very daunting prospect - again not forgetting that he is not like the go-getters on CIU.

PETE THOMPSON
Ok now, you say 60 hrs a week on the minimum wage.  That's £6.50 x 60 = £390 per week or £1690 per month after tax which equals  £25,600 before tax.  SO to be in the same position window cleaning, he wil have to earn £25,600/12 = £2,133 per month before tax.


Surely not?  Even if this employee is being paid at minimum rate, he still has to pay tax and NI.

An employee and a Franchisee would have to earn (turn over) exactly the same to be in the same position - they both have to pay tax and NI.

The reality is that there will always be people who like the idea of running their own business but lack the conviction to go it alone.  Think of a greetings card franchise - you visit retail outlets (local shop/garage/ etc) and place a stand with a selection of cards on it, then return weekly to check the stock and bill the shopkeeper for any cards sold.  Anyone could go to a cash and carry and buy a bulk load of cards, have stands made then tout them round small shops to establish a round.

Why are there so many successful greetings card franchises if it's so simple?

Party plan selling:  anyone can buy a supply of clothes/toys/kitchen supplies etc then invite all their friends around and flog it to them.  Couldn't be easier, so why are there thousands of party plan franchises operating around the world?

Franchising works because there are people who appreciate the security of running a business under the guidance of someone who's got the proven experience to be able to guarantee them success, plus offer them ongoing help and advice in every aspect of their business.

This is not an empty boast on my part, every Franchised organisation in the world depends on this basic truth.











bobplum

  • Posts: 5602
Re: whats the true cost of going franchise
« Reply #38 on: April 14, 2014, 10:05:42 pm »
NOT BEING FUNNY..............but couldn't you have gone a bit more in to detail ;D ;D ;D ;D ;D ;D

Brilliant reply, im sure in the near future i will be calling both you and vin

many thanks

bob