A fast-growing commercial cleaning franchise has targeted Birmingham for its first expansion into the Alabama market.
Florida-based Anago Cleaning Systems is currently scouring the area for a “master franchisor” that would oversee local growth, said operations head Adam Povlitz. Master franchise rights cost $39,000.
“We’re really excited about the Alabama market,” said Povlitz, whose father founded the company. “We’re growing like a weed. Next stop, Alabama.”
But the entrance of another corporate player – and especially one with Anago’s growth record – in the already crowded field of commercial interior building cleaning services could spell more trouble for mom-and-pop cleaners, some of whom have struggled in recent years to make ends meet.
From Anago’s perspective, the fragmentation in the industry is an opportunity for people to start their own businesses with the aid of its services, said Vice President of Marketing Judy Walker.
“There’s room out there for all of us,” Walker said.
Anago’s popular two-tier franchise model, which is already in place in 35 master areas in the U.S. with more than 2,200 franchise units, reduces overhead costs by having a master franchisor with a net worth of at least $100,000 and sales experience sign and find contracts for unit franchisees.
The company is expanding now in anticipation of continued growth in the cleaning franchise industry in Birmingham and nationally, Povlitz said.
The company just sold a master area in Atlanta and has a goal to sell nine more by the end of 2012.
“We want to be poised to jump on that growth bandwagon and clean up all these businesses,” Povlitz said.
The company currently has 35 master areas with more than 2,200 franchise units.
“It’s a model that’s pretty popular,” said Franchise Research Institute CEO Jeff Johnson, whose company tracks industry trends. “It allows you to grow more quickly and puts an entrepreneur on your side.”
Another benefit of the model is it’s easier for a master franchisor, who is usually already an established businessperson, to obtain financing, Johnson said.
“They generally come to the table with a little more firepower,” he said.
Although Walker declined to reveal how quickly the average master franchise area added new units, she said it was “exponential.”
“In our industry, there’s a low overhead and a fast ramp up,” she said.
Master franchisors, Walker said, typically need about $10,000 in startup capital.
That model has also helped Anago weather the recession, which has been the bane of many smaller cleaners’ existence.
Lea Anne Luten of Cleaning Corp. of America in Pelham said several small businesses in the local market have been hit hard during the ups and downs of the economy.
“But,” she added, “I think it’s definitely picking back up.”