[Perfect Windows]

See what you mean but you would like I say be very green to buy into that.

Two of our franchisees came along to see us at a jobs fair and decided that they should go it alone rather than franchise.  They did a bundle of work then decided to go with us.  The reason?  They both say that our prices less their commission is higher than they would have had the balls to charge, so they both see the other benefits of the franchise as coming effectively free of charge.  That wasn't "green", it was a clearly thought out decision.

And before you say it, our prices aren't standard for the South by any means.

Vin

[Perfect Windows]

And, back to the OPs question, our franchise price is deliberately low.

I can't speak for anyone else but if we sold a franchise for say £30K there's a perverse incentive to sell them for the short term boost in cash.  Need a round-the-world cruise? Sell a franchise.  New car? Sell a franchise.  Stuff whether they are going to flourish long term.

Nope, our franchise and a van costs less than a half decent car and the incentive for us becomes to keep the franchisee full, supported, motivated, happy and earning as much as possible for as little work as possible for as long as possible.

Vin

[NWH]

Might work on run of the mill work but all my work comes from recommendations most good work does.

[ChumBucket]

See what you mean but you would like I say be very green to buy into that.

Two of our franchisees came along to see us at a jobs fair and decided that they should go it alone rather than franchise.  They did a bundle of work then decided to go with us.  The reason?  They both say that our prices less their commission is higher than they would have had the balls to charge, so they both see the other benefits of the franchise as coming effectively free of charge.  That wasn't "green", it was a clearly thought out decision.

And before you say it, our prices aren't standard for the South by any means.

Vin

 

[Perfect Windows]

Might work on run of the mill work but all my work comes from recommendations most good work does.

I don't understand this post at all.  What's "run of the mill work"?

Vin

[Smurf]

I think pricing is a real issue with a lot of cleaners as like you say they don't have the balls to charge nearly enough for what the job is really worth. That has ultimately lead to jo public being price conditioned over the years.

When cleaners start competing on price alone most realise in a very short time they are working their nuts off for very little reward.

Then they will either do two things:
1. pack it and say it did not work for me which most do
2. stop competing on price alone

[Smurf]

Might work on run of the mill work but all my work comes from recommendations most good work does.

I don't understand this post at all.  What's "run of the mill work"?

Vin

I think what the real question should be is how do you retain control of franchises and the royalties due when their round grows organically by people recommending them to others. Also the "can you justers" that want extras done like having their gutters cleared and cleaned etc that happens to go into the franchises back pocket?

If they charge enough for this extra work be it by recommendations for window cleaning, one-off’s or yearly exterior cleans for gutters etc they will soon realise they can increase their income substantially without the franchiser ever knowing surely? 

It’s a bit like saying “do you want fries with that but don't tell the boss”

[Perfect Windows]

I think what the real question should be is how do you retain control of franchises and the royalties due when their round grows organically by people recommending them to others. Also the can you justers that want extras done like having their gutters cleared and cleaned etc that happens to go into the franchises back pocket?

It's a good question.

You can have systems in place to keep track of franchisees, and we do.  However, IMO the most important thing is to have the right people. 

It's easy to (and plenty on this thread have) become fixated on the 20% royalty but it's possible to see it another way.  Typically as an employee, you'll get anything from 15% to 30% of what you make for your employer.  Our franchisees get 80%.  If you have people who see it like that, you're fine.

Am I going to be worried about a gutter, fascia and soffit clean paid in cash going into the guys' pockets occasionally?  No, not really (but I'll also add that my advice to them all is not to bother more because of HMRC than for our benefit).  Why wouldn't I be bothered?  Because this is a long-term relationship and that's the bit that matters.  I'd care deeply about the systematic fraud involved in hiding customers (for that is what it would be) because that's affecting the long-term relationship.

I treat franchisees like they are trustworthy adults and, to date, they have all responded by being trustworthy adults.

Vin

[Smurf]

So really you don't have a clue what they get upto then Vin?

[Smurf]

Thought so 

Edit: Oops! why did you delete your post "no we don't" Vin as make my reply look like I'm talking to myself?

[Perfect Windows]

So really you don't have a clue what they get upto then Vin?

No you're quite right.  They are all fleecing me mercilessly.  Did you read my post?

By the end of 2017 two of them will be at the VAT limit so if they do have work on the side they'll have the Vatman to answer to rather than me.

Vin

[Smurf]

So I read that as you have given both franchises enough work that they will have to become VAT registered next year.
Is that correct?

If so my next question would be what impact would that have for them to charge all customers VAT including run of the mill domestic customers and what do the other franchises think of this?


 

[Perfect Windows]

Just below.

[Smurf]

Hypothetically speaking that's more incentive for them to start/continue fleecing you then surely?

[Smurf]

Going back to my origanal question that you did not really answer that im still intregued to find out.
How do you actually police your franchises activities to know if they are not fleecing you for sure?
If so what action would you take?

Also being that your trading name is on all the vans how would you handle any complaints that may lead to damaging your reputation?

[Perfect Windows]

Hypothetically speaking that's more incentive for them to start/continue fleecing you then surely?

Why assume that they are inherently dishonest?  You're not saying it out loud but you're repeatedly implying it.

If I were a franchisee I would account for every penny.  Not because I'd fear being watched or caught but because it would be dishonest not to.  Maybe you can't accept that there are people like that but I can.

Vin

[Smurf]

Hypothetically speaking that's more incentive for them to start/continue fleecing you then surely?

Why assume that they are inherently dishonest?  You're not saying it out loud but you're repeatedly implying it.

If I were a franchisee I would account for every penny.  Not because I'd fear being watched or caught but because it would be dishonest not to.  Maybe you can't accept that there are people like that but I can.

Vin

It's just down to human nature I suppose as goes for employing people too. If given the opportunity most would take advantage of making some money on the side no matter how honest you may think they are surely?

One story sticks in my mind of a lady window cleaner that employed a so say very nice educated chap to help out one day a week on her round & also covered her holidays.  He used her van and wfp kit to cover her round but then she started to query the water usage when it started to increase. To find out what was going she spoke to a few customers and when a tracker was fitted to the van the true story started to unfold.

The lady window cleaner was utterly gob smacked that such a nice man would fleece her as was paid well for his time but still was taking on extra work without telling her and pocketing the money himself.

As they saying goes "you give em an inch they will take a mile"

[David Kent @ KentKleen]

All my franchisees keep 100% of there add on work. I only earn royalties on the regular window cleaning work. There rounds have to be up to date and always are. Smurf, you really need to start trusting people more not everyone is out too rip you off. As regard to 'knowing' what your franchisee is doing each week surely you have heard of the various software available that makes this a doddle to do.

[Perfect Windows]

If given the opportunity most would take advantage of making some money on the side no matter how honest you may think they are surely?

I'd write that sentence like this: "If given the opportunity some might take advantage of making some money on the side..."

That's where we differ.

Vin

[Walter Mitty]

I think pricing is a real issue with a lot of cleaners as like you say they don't have the balls to charge nearly enough for what the job is really worth. That has ultimately lead to jo public being price conditioned over the years.

When cleaners start competing on price alone most realise in a very short time they are working their nuts off for very little reward.

Then they will either do two things:
1. pack it and say it did not work for me which most do
2. stop competing on price alone

I have taken option 2, but it's  easier to implement on new work.  Existing work is being brought up more gradually as I'm not in a position to withstand a mass exodus of customers