Businesses often hear the advice: “Meet clients where they are.” Eric Roudi, the CEO and founder of commercial cleaning franchise OpenWorks, takes that counsel to heart—quite literally.
The franchise has instituted a hyperlocal model of business, setting up shop close to where the work is. “This isn’t an industry you can phone into, you need boots on the ground,” Roudi says. “We have been strategic in opening offices in regions where our clients’ needs weren’t being met. This enabled us to open offices where we already had business and we could immediately start hunting for new business for our franchisees.”
OpenWorks follows the money. “We select cities where there is significant population growth and forecasted growth,” Roudi says, implying that a precursor of economic activity is more likely to drum up business for ancillary players such as the commercial cleaning industry.
The strategy has worked for the Phoenix-based franchise, which in just the last three years has jumped from five offices nationwide to 23.
OpenWorks’ success reflects the strength of the commercial cleaning segment overall, which grew 5.1 percent in sales to $5.1 billion, according to Franchise Times Top 200+.
The B2B services franchising model is becoming increasingly popular, says Jeff Oddo, CEO of City Wide Maintenance, which he describes as “a property manager’s ally.”
Commercial property managers essentially want all their headaches (commercial cleaning being one of them) solved and they’re more than willing to lean on a B2B franchise such as City Wide Maintenance to deliver, Oddo points out. The Kansas-based brand was among the top three in sales growth within the cleaning services segment of FT’s Top 200+, thanks to its systemwide increase of 23.7 percent to $207 million in 2017.
The financial success of commercial cleaning concepts just may give these franchises enough stability to weather—and turn into opportunity—potential disruptions on the horizon: the challenges of a strong economy, the evolution of technology and the increasing demand for sustainable practices in the industry.
The flip side of a boom
A strong U.S. economy is driving growth but it also has its downside: the increasing challenge to find good labor. “That’s the number one restrictor on growth,” says Steve White, president and COO of PuroClean. “Five years ago I might have said access to capital, but the available labor pool to build our business at every level is a pretty strong issue right now.”
That view is shared by most of the other franchises interviewed. White says his franchise mitigates the problem by zeroing in on retention efforts. “There’s a certain amount of stickiness to our organization and that is in large part because we work on retention, which in turn attracts more people,” White says, adding PuroClean also has strong education and training programs in place, which gives employees a sense of ownership in the company.
Adam Povlitz, CEO of Anago Cleaning Systems, points out that the commercial cleaning industry overall is forecast to see an increase in the number of workers. The U.S. Department of Labor predicts the job outlook for janitors and building cleaners to grow at 10 percent, a faster rate than average. While Povlitz agrees that finding labor is a challenge, he expects clients will understand the costs reflected in final bids.
“The fight for 15 is less of a fight and more of an expected inevitability,” he says of calls to increase the minimum wage to $15 an hour, adding that such visibility will add more transparency to the project bidding process.
Automation at scale?
A potential solution to the labor challenges is technology. Tim Conn, the co-founder of Image One Facility Solutions, advises fellow franchisors not to view all technology as evil. “If it does help with the labor shortage that we are experiencing then that’s good for Franchise Owners,” Conn says.
Technology in terms of big data and automation solutions are indeed beginning to lap at the edges of the cleaning industry. When the soap solution in a “smart” dispenser runs out, for example, cleaners can be notified through text alerts to refill boxes. Automated floor scrubbers and intelligent carpet cleaners are also beginning to enjoy implementation.
Povlitz points out that while such solutions are indeed ones to keep an eye on, their embrace by franchises is still largely out of reach both because of steep cost and use cases.
“These technologies are more suitable for large, open warehouse kinds of spaces, they don’t have the capacity—yet— to account for the wild variability from office to office,” Povlitz says.
While automation might still be a pie-in-the-sky goal in the industry, technology is definitely a big helper in delivering efficiencies in the execution of administrative functions. Anago Cleaning Systems, for example, has developed a proprietary mobile app that helps franchisees standardize the process of estimating and delivering on quotes. Anago is also helping clients report problems by taking photos and outlining problems. Over time, analytics culled from such data can help franchisees zoom in on potential areas for employee retraining.
Image One also developed a proprietary technology platform through which franchisees can access proposal drafts, collections, billing, franchise statements and more all in one place.
City Wide Maintenance has developed systems whereby clients can access time-stamped proofs of work done in a facility.
Technology is also making its way into another potential area in flux: a growing demand for green solutions. City Wide’s Oddo says electrostatic cleaning processes and minimal packaging are steps in that direction.
Povlitz adds Anago’s dual-bucket solution helps save on water and cleaning product because workers don’t have to empty and refill buckets with fresh water over and over again. Conn, meanwhile, points out that while green practices are making their way into the industry, it’s hard to truly disinfect areas with a “green product.”
“There’s no such thing as a green disinfectant,” he says.
Nevertheless, Anago keeps an eye on sustainable practices, focusing on HEPA filter vacuuming and cutting down on packaging.
The global drive toward sustainability and the growth of future-forward technologies will doubtless trickle down to sculpt the commercial cleaning industry.