FRANCHISEFOCUS INVESTMENT: FROM £20,000 Sound advice Minster Cleaning share insights on finding the right franchise M
inster Cleaning started in 1982 and began franchising in 1992. There are 40+ branches,
collectively turning over £55million+ and the network is still growing. The business is resistant to economic peaks and troughs. Territories are large, with business opportunities across different sectors. Both new territories and existing branches are available for sale. The business is about people, whether it's managing a workforce of cleaners, office staff or interaction with customers and prospects. Here, Mike Parker, Managing Director
at Minster Cleaning, shares top tips for assessing a franchise.
Top tip 1 – ask awkward questions Ask about the franchise agreement and about renewals. More franchise agreements are offering renewals for a restricted number of times, typically twice. I'm also seeing more renewal fees. At Minster Cleaning, we do not charge renewal fees, only a nominal solicitor’s fee. Each franchise term is five years, with an automatic right of
renewal for an unlimited duration. Ask the franchisor about their
income streams. At Minster Cleaning, after the initial investment, we only have one income stream from our franchisees that's aligned to the sales in their businesses. Other franchises have additional arrangements covering products, equipment, and/or vehicles for example. Ask the franchisor why any franchise
failures occurred. If related to lack of training or support from the franchisor, that’s a warning sign. Does the franchisor have existing
branches for sale and, if so, what is the value of these businesses? What are the key performance indicators that influence the value? These indicators are where you should focus your attention.
“Resistant to economic peaks and troughs”
Top tip 2 – remember it’s a 2-way process! Franchisors will also be evaluating you! You and your chosen franchisor are going to be spending a lot of time together, possibly 20 years plus. Just as you need to be selective about who you partner with, I'm also selective about who I bring into the business. Our reputation is on the line with each franchisee that joins our network so we want to make sure that we get that right.
Top tip 3 – make sure you have access to the franchisee network Ensure that you've got permission from the franchisor to speak to any franchisee from the network, not just two or three ‘superstar’ franchisees. Speak to as many people as possible to get a balanced view. To understand what life is like as a
franchisee, ask what they like about the franchise, their key challenges and about levels of collaboration across the network
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and how franchisees communicate with each other. You also need access to the head office team. These are the people that will be supporting you.
Top tip 4 – check their British Franchise Association (BFA) accreditation status The BFA is a kitemark of quality for ethical franchisors. If the franchise you are considering isn't a member, ask why. We go through an ongoing process
of reaccreditation with the BFA and are transparent in our dealings with franchisees as we are continually assessed. As a BFA Established member, we follow a code of ethics. We provide information on previous franchise failures, our business and financial position, key people, franchise proposition and franchisee contact details.
Top tip 5 – prepare your business plan and be prepared to be questioned on it! Make sure you understand what you're embarking upon. Be careful if you outsource the writing of your business plan as you will still have to know the numbers. The franchisor should give you
templated P&L accounts and cashflow forecasts. They should also supply guidance, particularly if you are considering a start-up / greenfield purchase.
In summary – thorough due diligence is crucial! I hope these top tips are useful. It’s important that you choose a franchise that best helps you achieve your goals and aspirations. If you are interested in Minster Cleaning, we’d love to hear from you.
MINSTER CLEANING Commercial cleaning management 0121 386 1722
minsterfranchise.co.uk minster@minsterfranchise.co.uk
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