[Hilton]

A guy I know fairly well in the business has just walked away from his Servicemaster Franchise, I have not spoken to him yet about his own situation but he has told that there is now upwards of 60 franchises up for sale through out the country, including some of the old established business's.

I was totally shocked at this I always knew SM to be not only the original franchise in the country but one of the best ,what has gone wrong?

Can't just be the current economic climate or loss of insurance, something must be happening within.

[John Kelly]

The insurance industry, as regards the companies doing the work, is on it knees. The Insurance companies are cash settling a lot of claims. So rather than sending out a specialist contractor like Servicemaster, Rainbow etc they are sending the policyholder a cheque. This is all well and good but the problem is the policyholder doesn't understand the extent of the damage to their property and may think they just have to replace a few carpets etc. They settle for the agreed amount then weeks later there is mould growing up the wall.

[Matt Lindus]

The turnover they make nationally from carpets is tiny; they can’t possibly make a profit. They need to pour more attention into commercial contract cleaning and use the carpets as a small swing off.

Don’t get me confused with Merry Maids, that is a fantastic business and does very well.


Matt

[clinton]

Sounds true john and they pocket the money an think nothing else till all the problems arive :

What is there price for an average lounge on the cleaning side

[Susan Dean (1stclean)]

ive bought two max dev  t.m. from two s.m. guys in the last year s.m  have cut there prices and made the areas smaller for the owners  so there makeing northing which is good if your in the market for some cheap gear

[paul moss]

Isnt Jim Neil a service master franchise?

[Shaun_Ashmore]

I've met Jim and he's a resourseful kind of guy, not quite sure why he's in SM as he gets his own work probably that;s why he's prospering.

Shaun

[Hilton]

I remember years ago we all used to look to servicemaster above all others as the leading carpet & upholstery business in the country, then along came the upstarts Chem-Dry with their fizzy water,then Rainbow others followed and all of sudden Servicemaster looked tired and old. They had to change to compete but over the years they just seem to have got it all wrong, p***ing off the franchisees in the process.

[Dave_Lee]

Dont know about that, I for one never rated Service Master above anyone else, after all its down to the individual Franchisor as to how good his service is, and that can be extremely variable.
Perhaps theres now a chance for us independants to restart getting some insurance work, like we used to many years ago.
Dave.

[murky]

They (we) were really good at it years ago, but as above they didnt see what was going on around them.

One of the previous CD directors went to them and offered to show them what CD were doing and how to price up against them but they said no we know better. The rest is history.

Years ago Rainbow were owned by a brewery over here and all they really did was clean and redye faded nylon carpets and emboss company logos onto them, its massive in the States. It was bought by a former SM franchise guy called Mel Lusty, previously  he had approaced SM with a view to improving their DR work but again they said no thanks. Mel got into the smaller Ins Co's that the bigger firms werent bothered about and slowly built it up. He was very strict about getting work in, you HAD  to get x amount of domestic work because that was the backbone of the company, and not rely in Insurance work, you HAD to have a unit/workshop and not work from your shed/bedroom like most of the SM businesses. In return he would guarantee your area for 10 years not like other cleaning franchises who would drop someone into your area just because they could. If you had a prob he would help you because he had been there and done it all before, unlike some bigger businesses who let you go to the wall.

 I still know a few of them and they all regard their business as their own cleaning company and have little or nothing to do with head office, they pay their fees and keep their heads down, they only go to the area meetings if there is a 3 line whip on it!

What made them stand out years ago was the fact that they had their details on the care tag on most of  the suites, it was put on for free  and as there werent many people doing what we do so the public naturally went to SM, but then CD offered to pay to put the tags on the suites, SM head office wouldnt be drawn into an auction even though the money was paid by the Franchisee into a pot.  I think the only people that have  Servicemaster on tags now is M & S.
So if people read the tags on the suites now it says recommend CD to clean it.

With respect to Jim a lot of the Franchises are run by older guys, a lot are over 50 now and of course dont have the drive and enthusiasm he has .And of course the older you are the less bothered you are. They have had the good years out of it and are probably looking to get out of it now.

As I did.

Murky

[paul moss]

Nice post.

[jasonl]

.......And very accurate

[Shaun_Ashmore]

When I worked for SM they used to get the area manager coming around may be twice a month to see how the franchise was doing, my boss used to run it fro home, he had bought the franchise from his boss and had a unit but decided to bring all of the business and home under one roof and it was frowned upon as there was knowhere to store insurance take aways.

Shaun

[Len Gribble]

The one in the next road to me is still going with his rascal van it appears he spends a lot of time in the gym so the wife tells me.

As for suites they are welcome to them.

Len

[Jim_77]

I feel a bit hesitant to get into this topic, because obviously I'm a SM franchisee.

But when have I ever kept my mouth shut

Hilton - Presuming you're referring to this list, the amount of "franchises" on offer is deceiving

The "On Location" franchise (as it was) consisted of 3 disciplines: disaster recovery (ins. work), commercial carpet & upholstery and residential carpet & upholstery.  Now the licences are split up into those three separate elements.

As most people know, a SM franchise is a territory, you're the only one in that area.  There have been some new areas created which instantly adds 3 franchises to the list.

Yes, there are some guys selling up.  There have been a few older ones retiring, some of them have been going 30 years or more!  So each of the old franchises that is put up for sale creates 3 new ones.

I don't know why there are so many of the contract cleaning franchises up for sale, I don't have much to do with that side of things.

What's interesting to note is that the smallest list of franchises for sale is Disaster Restoration.  This goes in stark contrast to the "word on the street" that the insurance work is dying.  John Kelly's post is very true, yes there is a lot of cash settlement and unfortunately a lot of drying work is being handed to builders to make a balls of   They're trying to keep the costs down that's for sure.

But most SM franchisees still do all 3 things so they can keep their staff on to do the day-to-day cleaning stuff and the DR franchise doesn't really cost them anything to keep in hand.  As soon as it rains you're laughing

To be honest, our sales guys who are supposed to get national contracts aren't really stunning us with their performance... but I reckon that must be a tough job.  Not sure whether it's right to slate them or not really.

In the insurance market, the tide has gone out from SM shores in the last few years... but that's exactly what it is, tidal.  Ebb and flow, the insurance companies move around and change suppliers so in a few years time SM might have the upper hand and CD or rainbow might be on the rocks.  Who knows.

The turnover they make nationally from carpets is tiny; they can’t possibly make a profit. They need to pour more attention into commercial contract cleaning and use the carpets as a small swing off.

Matt what's with all the BS lately?? :  How could you possibly know what's the most financially viable service that SM provide!  If it starts with "I heard..." or "apparently..." then I don't wanna know! :  You've been listening to too many monkeys talking crap on forums

Contract cleaning is so competitive and price-driven, the market is rock hard to work in.  Profit margin on carpet cleaning far exceeds most restoration work, it's just the volume that's way lower so the profit isn't comparable.

So to cut a short story long, SM isn't about to go under and when you consider that the whole franchise group probably has close on 1,000 franchises, not everyone's selling up are they?

Things aren't always as they seem and you shouldn't believe everything that "apparently" you "hear"

[Jim_77]

christ i need a beer after that!

[Steve Barnett (Carpet Care Plus)]

From the horses mouth - good post Jim


Steve

[nevil]

That's an interesting insight into one of the franchises. There is SM a few miles down the road from me. He seems to have got himself two new vans in the last year. I can't imagine he is struggling too much.

My perception of all the franchises, and it's based on what I hear from my customers. Is that there standards a very high as are there prices. I have often thought that us independents have an unfair advantage because we don't have the fees etc. to pay. But I suppose they don't have to market as heavily as us to keep the dairy full. Also from what I can see, they are positioned to operate in the high end of the market and have the benefit of a national reputation to help propel them forward.

[Jim_77]

Nevil, that'll be Darren & Amanda Smee, they're long established and own about 7 franchise licences.

If you're an independent charging less than your local franchised businesses, you might have an advantage in some ways but not in others. Some customers buy the most expensive option because they perceive more value.  That's not a ChemDry thing or a SM thing, it's down to the individual business owner as to what they charge.  A colleage of mine in a neighbouring franchise is more of a "tradesman" than a "businessman" and he keeps his prices lower, isn't vat registered either.  There are a couple of independents in my region who charge more than me, they must be making a tidy profit because as you say there are fees to pay.

Who says we don't have to market heavily?!  We wouldn't survive on National Account work alone, so it's the self-generated business that really puts bread on the table, any extra that lands in your lap is a bonus really.  I had a few nice little pub and hotel cleans when the smoking ban came in, but apart from that it's scrappy little minimum charge jobs I get mostly. (I don't do the insurance work by the way)

When a franchise has been operating in an area for a number of years (my area has had a SM for about 40 years) you do get a continuing string of repeats and recommends, so even from day 1 of buying a franchise you have customers.  But people are the same no matter who cleans their carpets, you still have to market to them and sell yourself to earn the money.  It's not a walk in the park

I honestly don't think that SM is a household name in the UK, so it's not like people instantly connect to it carrying a reputation.  It is in the states, as I've worked for a few customers originally from the US and Canada who've called me purely because SM is the only name in the YP that they recognise.

[derek west]

so why you paying all them fee's then? 

could you not think of a name?

derek