When it comes to owning a franchise, it can prove to be a profitable venture – especially if you are looking to owning a cleaning franchise. However, the first thing you’ll probably wonder is how much will it cost to own a cleaning franchise. Just like with any business, there are certain fees and expenses – like the franchise fee and the cost of materials – that you need to account for to make sure you can handle them on time. So before you decide to own a cleaning business franchise, keep reading this blog to learn how much it’ll cost you.
What Are Your Expenses When You Own A Cleaning Franchise?
Just like with any franchise, the cleaning business comes with fees that you must prepare to handle. If you want to own a cleaning franchise, you can expect expenses like the initial franchise fees, licensing fees, insurance (depending on the cleaning company you decide to go with), cleaning supplies and products, and money for advertising. These are essential areas when it comes to owning a cleaning business franchise, so it is important you understand exactly how you will use your money.
Know What Exactly You Will Have To Pay
As stated above, it is important you know exactly where your money is going when you own a cleaning franchise. This is the only way you’ll be able to create a franchise budget that is realistic and manageable for your finances. And while the above section doesn’t cover everything, you can expect your expenses to fall under those categories. Here is more information on the expenses you need to account for when you decide to own a cleaning business franchise:
- Initial franchise fees:
- Your initial franchise fee is a one-time payment made to the franchisor. The amount can vary based on factors like the size of the company and its location, but typically you can expect to spend anywhere from $25,000 to $50,000. This amount is what allows you to use the company’s brand and business systems for a defined period of time.
- Royalty fees:
- Aside from the initial franchise fee, you will also have royalty fees. These fees – which can either be monthly or weekly, depending on the business – cover you continuously using the brand and support. These fees are usually calculated as a percentage of your gross sales. This means you can expect to pay anywhere from 4% to 12% – although some companies have a fixed rate.
- Insurance:
- Before you can begin working, your franchisor might require you to obtain a franchise insurance plan. This insurance plan covers things like liability, workers’ compensation, and property insurance. This insurance is based on the profitability of the business. This means the bigger the company, the more money it’ll cost for insurance.
- Marketing and advertising:
- Another fee you’ll have to deal with is a marketing and advertising fee. The appeal of owning a franchise is you get the benefit of already having brand recognition – depending on how well established the cleaning company is, of course. Companies spend a lot of money and time on advertising, which you will benefit from as a franchisee. This fee is usually a percentage of your gross revenue, so expect to pay anywhere from 2% to 5%.
- Other fees:
- Depending on the cleaning company you choose, your franchisor might offer things like trainings, technology support, software, or even the ability to transfer your franchise if you decide to sell. This means you will have another fee to manage. While this fee can vary based on what your specific franchisor offers, you can expect this to be a percentage of your sales or your gross revenue.
How Do You Budget For A Cleaning Franchise?
Now that you know more about the franchise fees and what to expect when you own a cleaning franchise, you need to know how to get a budget prepared. Getting a budget prepared for these fees involves you coming up with a realistic budgeting plan that you can implement and stick to. These fees – if not properly prepared – can derail your finances and send you into a negative situation. To avoid that, it is imperative you come up with a realistic budget.
The first thing you need to do is know your initial and ongoing costs – which we discussed in the previous section. Once you know what these costs will roughly be, you need to do your research to project your possible revenue. This means you should look at your franchisor’s financial statements, do market research, and speak to other franchisees so you can have an idea of how much money you will generate. After you’ve done this, you can compare your income to your expenses to determine if you will be able to stay afloat or not.
While these tips will help you budget for your franchise, one thing you also have to remember is to set aside money for emergencies or unexpected situations. Any business owner or franchisor will tell you that unexpected situations related to the business can happen at any time, so it is important that you have the funds to deal with these situations quickly so they don’t derail your business plan and mess with your revenue.
Find Out Your Franchise Costs Now So You Can Prepare!
The best way to figure out how much it will cost to own a cleaning franchise is to do your research. You have to know dollar amounts for as much as you can so you can predict whether or not you can get a franchise. While the true test to figuring out if your business will be profitable is through trial and error, knowing more or less the costs of things will help you have a steady foundation. So before you sign anything or make any decisions, make sure to do your research and have clear conversations with your franchisor about these costs.
