Franchise Versus Independent; What’s The Real Difference?

June 15, 2000
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After attending industry association meetings on the local, state, and national levels for the past 40 years, I am still amazed at the perception some franchise companies and some independent companies have of each other. Sometimes it appears as if each believes the other to be incapable of satisfying customers or growing their business. Of course that perception is false from both sides. Perhaps I can narrow the gap of understanding between the two.

I believe we all are part of a very passionate industry. One cannot just be in cleaning and restoration and survive for very long. You have to be totally involved, you must be completely committed, and you really have to love what you are doing to generate any longevity in this business. I believe that to be true of both franchise and independent cleaners.

One may ask, “What really is a franchise?” While some refer to franchising as an “industry,” it simply is a method of distributing goods and services. To create a franchise, a sponsor (called the franchisor) grants another party (the franchisee) the right to do business under the franchisor’s name, in a prescribed manner, during a specific period of time, within a designated area, which is all spelled out in a franchise agreement.

I understand that the above words convey somewhat of a legalistic definition, but franchising is a contractual relationship. Franchisors must be registered in all the states they sell their franchises in, either directly or through the Federal Trade Commission. It is also very difficult for the franchisor to make earnings claims during the sales procedure leaving the prospective franchisee somewhat in the dark regarding the possibilities of success.

Since the mid-1950s, the public has identified with the development of the franchise method of distribution, particularly with the lodging and service industries. However, franchising was first utilized in the United States by the Singer Sewing Machine Co. during the 1860s, by General Motors in 1898, and by Rexall Drugs in 1902. Many other companies followed suit. Since the end of World War II there has been substantial growth, development and adoption of the franchise method of distribution by other industries and companies. In a report, the U.S. Department of Commerce estimates that domestic sales of goods and services from all franchised outlets will exceed one trillion dollars this year.

When describing exactly what a franchise is, the important thought is “the right to do business in a prescribed manner.” Every comparison between a franchise and an independent from this point on will reflect that statement. As we further analyze these words we are confronted with a dilemma. In many ways, this statement is the reason franchises are the same as independents and it is also the reason why they are different.

Let’s take a moment and really evaluate what each of us does when called upon to clean a carpet. For our discussion, we will only concentrate on the technical/production side of the service. Once all the pre-testing is performed and the necessary qualifications are communicated to the customer, the operator (franchisee or independent) delivers a cleaning substance to the carpet. After the cleaning substance has performed its task, a recovery system removes it and the soil from the carpet.

The recovery may be almost instantaneous from a positive displacement blower on a truck mount or a bypass vacuum motor of a portable, or somewhat delayed with an upright or tank vacuum or a spin pad, etc. As we look at this oversimplification of cleaning, we really do see how the use of a delivery mechanism and a recovery mechanism binds all of us together regardless of the system we utilize. However, this similarity of procedure also creates the differences that we all know exist.

In the beginning, a prospective independent cleaner chooses a name, then an identification scheme for the company vehicle, letterhead and business cards. A yellow page ad that complements a marketing plan is developed, and a sales procedure to communicate a positive message to the buying public is created. In addition, a decision must be made as to the cleaning procedure the company will deliver to its customers before the machinery and cleaning solutions are purchased to support that decision.

On the other hand, a prospective franchise cleaner investigates the various franchises available. When the choice is made and the franchise is purchased, a complete business system is delivered. The patented equipment and proprietary cleaning solutions are only a small part of the package. Business cards, letterhead, truck signage, advertising pieces, technical/management/sales manuals, customer invoices, and business software may also be part of the initial delivery.

As you evaluate the two start-ups, there really is very little difference in what is needed to piece together the tracks necessary for the business to run on. The difference is in how they acquire those pieces. The independent cleaner seeks industry information through equipment and chemical manufacturers, distributors, plus local, state and national associations. The franchise cleaner has access to all of those plus the research and development department of their franchise company.

The independent cleaner can seek marketing advantages by being certified through national associations or certifying bodies. The franchise cleaner has access to all of those sources plus national affiliations with manufacturers, insurance companies, and e-commerce companies developed by the franchisor.

The real difference between franchises and independents cleaners is not what they do but how they do it. It is a simple difference of business personality. It is a business choice, hopefully made early in their thought process from accurate information about the two types of start-ups.

We may call ourselves cleaners and restorers, but the truth is that we are all problem-solvers. Nobody calls us because the carpet or furniture looks good, or because they are happy with the water that is standing in the family room. They all call because they believe they have a problem. The problem may be one of aesthetics or a real disaster, but we are called to solve the problem. To receive the opportunity to solve the problem, our marketing program must stimulate the customer, agent, or adjuster to call our company. To have the knowledge necessary to make the decisions to solve the problem, our technical information must be up-to-date. To invoice the customer and track payment for our services, our management tools must be in place; and to ensure customer satisfaction our communication skills must be at 100 percent. How we acquire these tools is the difference between a franchise and an independent. u

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