Cleaning Franchises Shine As Demand Continues To Grow

 One of the most important challenges facing a potential franchisee is choosing a business that promises to have staying power for as long as you plan to continue operating it. Too often, the hot concept of the day turns out to be little more than a flash in the pan, and unwary franchisees who jumped on the bandwagon are left holding the bag.

 There are no ironclad guarantees on what the future will hold, of course, but prospective franchisees should look at a number of factors when evaluating a business;s likelihood of longevity. These factors include current lifestyle and demographic trends, projected changes in those trends and reliable statistical projections on the business's outlook. Based on all those criteria, franchise cleaning services seem well-positioned to be standout business opportunities well into the next century.

 Cleaning services are expected to be the second-biggest generator of new jobs for the period 1994 to 2005, according to the U.S. Bureau of Labor Statistics (BLS). The agency looks at both commercial and residential cleaning services in formulating its projections, but it credits growth in the home cleaning sector fueled by increased demand for convenience, the rising number of multiple-income households, growth in the number of women working outside the home and record-high levels of disposable income as primary reasons for that expected high level of new job creation.

 Once the province of the rich and famous, cleaning services are now viewed as an essential household budget item by consumers ranging from working single mothers to dual- income, middle-class families to empty-nesters and retirees. About 9.4 million households--9% of all households in the United States-- paid a professional service to clean their homes last year, and franchise businesses captured a large percentage of those sales.

 Overall demand for household cleaning services is projected to grow by 6% for the period 1996 to 2000 and by 7.4% from 2000 to 2006, according to research and projections complied by Mediamark Research Inc., TGE Demographics Inc. and the U.S. Bureau of Labor Statistics. The greatest increase in demand will come from households in the 45-to-54 age group (up 15.1% for the first period and 15.7% for the second) and those in the 55-to-64 age group (up 10.6% and 26.5%, respectively).

 However, BLS is predicting a sharp decline in the number of such self-employed independents over the next eight years. The reason for that is the stiff penalties that can be imposed on consumers who fail to report wages paid to domestic help to the Internal Revenue Service and to pay the required employer's share of Social Security taxes on those wages.

BIG BROTHER WATCHING

 "Stricter enforcement of those regulations is prompting more households to turn to professional cleaning services, including maid services, as an alternative," says an economist for BLS. "As a result, we are projecting an 18% increase in the number of maids, cleaners and janitors employed by those businesses by the year 2005."

 There is also a lot of anecdotal and some statistical evidence that today's consumers are more comfortable hiring a professional cleaning service than a solo operator. The growth in the number of franchise companies, franchise outlets and franchise revenues in the cleaning services industry is strong evidence of that trend.

 One aspect of franchise cleaning services that appeals to many consumers is the continuity and reliability they represent. Industry research indicates that the average life span of the typical mom-and-pop cleaning business is just 18 months. What's more, when independent operators are unable to keep an appointment for personal or other reasons, there generally is no back-up plan in place, and customers are left with the unattractive options of putting up with a dirty house or cleaning it themselves. Many established cleaning franchises, in contrast, have been in business for many years. They have the management and personnel to make sure that their customers' cleaning schedules are met no matter what the circumstances.

 "Today's consumers are well educated and aware of the potential liabilities they open themselves up to when they grant access to their homes to a non-professional service worker," says an executive at one leading maid service franchise. Like most franchise companies in the cleaning industry, this one is licensed, bonded and insured, which relieves the householder of many concerns. should an employee of the franchise suffer an injury in a customer's home, the franchise's insurance will cover it. Bonding employees also provides a level of protection against theft and other illegal activities.

 As might be expected, households with married couples where both spouses work are among the biggest consumers of cleaning services. In fact they are 322% more likely than the general population to use such services. Members of such households tend to have busy schedules, which gives them a strong incentive to use a cleaning service, and higher than average incomes, which gives them the means to pay for it.

BIGGEST USERS

 Somewhat surprisingly, the group more likely than any other to use a home cleaning service is households with married couple and adult children living at home. These households are 34% more likely than average to use a maid or other professional cleaning service. Demographers speculate that the primary reason for this is the fact that such households tend to be headed by wage-earners in their prime earning-power years. Thus, they are better financially positioned to afford cleaning services than the population at large.

 While research indicates that about 9% of all U.S. households currently use a professional maid or cleaning service, some polls suggest that the overall market may be much larger. A Roper Starch Worldwide survey that questioned consumers about their use of all types of paid help--including independents, part-timers, relatives, etc.--to perform household cleaning chores showed a much higher percentage of use, up to 25% of all household. Given the trend toward paid professional cleaning services identified by BLS, that bodes well for the future growth prospects of franchise cleaning services.

 Just how big is the market for professional cleaning services? Because of the large number of independent and undocumented operators in this industry, its size is the subject of some speculation. However, a widely quoted market data report estimates the nationwide commercial cleaning industry' sales at almost $53 billion last year, while the maid service industry is projected to be approaching $20 billion in annual sales.

 One thing that is clear is the fact that current sales and future growth prospects in the home cleaning field are attractive enough to lure big, new players. One of the most recent is Marriott International Inc., which just launched a new (non-franchise) venture called HomeSolutions in the Washington, D.C. area. The reason the company decided to enter the business, says senior vice president of new ventures Mike Ruffer, is because its market research shows that people are looking for ways to reduce the stress in their lives, and hiring someone to do the household chores is one of the most popular ways to achieve that goal.

 Ruffer points to a 1996 national consumer survey finding that more than 75% of U.S. consumer feed overloaded and stressed, up 58% in 1985. "With both spouses working in most households, the demands on their time are incredible," he says. "Besides working, they have to find time to spend with their children and each other and attend to all their other social and family responsibilities. No one has time to take care of the household chores any more."

 According to the U.S. Department of Labor, 67% of American women now hold jobs outside the home, and that number is forecast to skyrocket to more than 80% over just the next three years. One offshoot of that trend has been the increased premium placed on leisure time. According to a recent Harris poll, two-income families now have 37% less leisure time than they did in the 1970s.

 One thing that has not changed much since then, however, is the fact that most women still bear the majority of responsibility for housework. As a result, they are increasingly turning to outside services such as franchise maid companies to help with those chores. In fact, the practice is becoming prevalent that the U.S. Department of Commerce expects 80% of two-income households to use an outside service for house cleaning by the end of this decade.

 * The power of group advertising.

 * The freedom of owning your own business and making day-to-day decisions on your own balanced by the guidance offered by the franchisor's experience.

 * The benefit of identification with the franchisor's service marks, trademarks, proprietary information, patents and designs.

 * The systematic initial and ongoing training most franchisors provide.

 * The lower risk of failure a franchise provides in comparison to an independent business start-up.

 * The access to additional assistance in areas that can include finance, accounting, management, etc., that most franchisors off their franchisees.

EVALUATE YOUR PROSPECTS

 Owning a franchise in the professional cleaning services industry has a lot to offer, but before you take the plunge you need to conduct an honest evaluation of your own prospects of success as a franchisee. Keup suggests starting by asking yourself the following questions:

 * Will your franchise be taking a considerable amount of your time away from your family? If so, how do you feel about that?

 * Is your family enthused about the franchise? Will you enjoy working with them if they will be employees?

 * Do you enjoy working with others? * Do you have the necessary capital resources, and can you make the financial sacrifices required?

 * Are you emotionally prepared to work long, hard hours?

 The last point is a key one, and it applies to all new business start-ups, franchise or independent. While franchising offers a number of advantages and greater support resources than going it alone, when all is said and done, it is still the business owner's commitment and willingness to work hard that spells the difference between failure and success.

 Buying a cleaning service business directly from a franchisor is not the only option available for breaking into this fast-growing segment of franchising. It is also possible to purchase an existing franchise business from a local franchisee. Be aware, however, that the big difference between purchasing from a franchisor and buying from an existing franchisee is that in the latter case the seller is not necessarily bound by the same disclosure restrictions that apply in the former situation.

 Prospective franchisees should always avail themselves of the services of qualified professional advisors such as an accountant and a franchise attorney before making any purchase, but those services are particularly important when considering a purchase from an existing franchisee.