According to Statista, the commercial cleaning market was valued in 2020 at an estimated $72.66 billion in the United States, and projected to rebound to a pre-COVID level of nearly $75.6 billion in 2021. As businesses reopen, commercial landlords and owners will undoubtedly have a renewed and long-term focus on cleanliness, disinfecting services and other janitorial work for organizations and schools to provide clean images and safe and attractive workplaces.
This presents an opportunity for commercial cleaning franchises to demonstrate their value and potentially boost their earnings. Furthermore, it could be an ideal time for experienced entrepreneurs to buy commercial cleaning master franchises.
The Basics of a Master Franchise
The master franchise is a special partnership between a franchisor and franchisee. Here, the master franchisor (or brand owner) sells the right to the master franchisee to sell independently owned and operated franchise businesses offering commercial cleaning and maintenance services under the brand’s umbrella and in accordance with a proven system.
The master franchisee will provide its unit franchisees with certain services in exchange for a fee. Generally, master franchisees recruit, develop and support new franchisees in a given geographic territory. They provide franchisees with training on business operations, as well as certain back office support and ongoing support with regard to the overall strategy. With a commercial cleaning master franchise, the unit franchisees offer and sell cleaning services to customers. Furthermore, unit franchisees will use the recognizable trademark (brand) and methods of operation.
Master franchising cleaning businesses are popular for several reasons:
- The master franchisor and master franchisee both earn monthly franchise payments and royalties, allowing growth potential for multiple regions.
- It has proven to be an efficient way to develop or expand a presence in U.S. cities.
- There is generally little – if any – inventory, equipment or major build-out costs.
- Regular access to capital and cash flow.
- Commercial cleaning has demonstrated resilience even during COVID and other economic downturns.
What To Consider Before Buying A Commercial Cleaning Master Franchise
Like any new venture, regional commercial cleaning master franchisees have startup costs and may also be based on population. Total investment ranges will also be featured in Item 7 of the Franchise Disclosure Document (FDD). Master franchising cleaning businesses are service-based, but driven by sales and marketing. Beyond numbers and revenues, you or your partner must be able to connect with people at every level in order to inspire faith in your operation.
There are regulatory aspects to also keep in mind. Master franchisees need to prepare FDDs and file have them filed with certain states, like New York, just as if they were the master franchisor. Master franchisees will want to ensure that their franchise counsel has deep experience negotiating the master franchise agreement, preparing and filing the FDD, and providing franchise sales compliance training and ongoing legal services.
The master franchise relationship ultimately depends on two franchise agreements – one between the master franchisor and master franchisee, and one between the master franchisee and each unit franchisee. These agreements are unique to your individual master franchise relationship.
After you reach an agreement, you will be held to a specific rules and ethics codes. As previously discussed, franchise relationship laws regulate franchisor behavior after the purchase of the franchise. In the absence of federal laws, each state dictates what limitations apply and when.
We Can Help
Lusthaus Law P.C. has a proven record of assisting franchisors and franchisees, including master franchisees, with their business operations at every stage of development. We are committed to our clients’ success and keep our finger on the pulse of the industry to ensure that we provide the best and most up-to-date franchise law counsel.
Contact us today to learn more about how Lusthaus Law P.C. can help you navigate a clear path toward a successful future.
