10:32 AM • 09/17/15
How Jan-Pro Won the Scalability War
The commercial cleaning giant is still growing and spreading around the world.
Since the beginning of franchising, brands have been perfecting their systems and working on expansion. Many brands have failed or burned out, some remain regional icons and some have grown a significant number of units, such as Five Guys and Wing Stop, but are over-saturated and can grow no longer in key markets.
No one has been able to come as close to perfect in terms of scalability as Jan-Pro, the number one commercial cleaning brand in the country. With more than 11,000 unit franchises, Jan-Pro is still growing and entering new parts of the world through its multi-tiered master franchise model.
Scott Thompson, the vice president of development for Jan-Pro and sister brand, Maid Right, a newer residential cleaning brand, discussed how the brands have been able to win the scalability war.
1851: What is the greatest advantage to a master franchisee model? What is the greatest advantage to the unit franchisees?
Thompson: The greatest advantage to a master franchisee is that you essentially become a franchisor which allows you the opportunity to grow and scale your business while helping other people in get into business for themselves by selling unit franchises. You get multiple revenue streams and a recurring revenue business that overtime becomes an annuity. You receive income through selling franchises, selling service to clients and royalties from your unit franchisees.
1851: Did Jan-Pro originally start with the Master Model?
Thompson: Jack LaPointe and Carol McLennan originally started Jan-Pro in 1991 in Providence, Rhode Island with the master model in mind, essentially perfecting the system before selling new master territories. After much trial and error Jack and Carol decided in 1995 to go forward and begin selling master territories to supplement the unit growth they were seeing.
1851: Jan-Pro has over 11,000 unit franchisees. How does Jan-Pro manage these franchisees?
Thompson: Each of the 11,000 unit franchisees are their own independent franchisee and they manage their staff to provide consistent reliable cleaning service. The master franchisee provides each unit franchisee with training, mentoring, ongoing coaching, customer accounts, accounting services and operations support. Essentially the master becomes the executive corporate arm for each unit franchisee allowing them to get into business at a low cost. We at the service center provide each master franchisee the model, the technology and ongoing support to build a large long-term recurring revenue business model.
1851: Do you see any changes being made to this model in the near or distant future?
Thompson: I don’t see any major changes right now but there are some current regulatory issues in some states that could require us to adapt in the future. That being said, we have been working through these with our master franchisees and have not had to change the model.
1851: Is commercial cleaning the only industry where this model is the most effective?
Thompson: Many companies use a master franchise model but typically in other countries. An example would be Subway, they are in 100 countries and each country has a Country Master Franchisee who sub-franchises to their local unit franchisees. Domestically most franchisors don’t use the master franchise model because they lose some control. They might use an area representative or area director model which allows for a person to buy the rights to an area and to selling a certain number of franchises using the franchisor's FDD and splitting royalties and initial franchise fees. A lot of younger emerging brands with minimal resources use the area representative or area director model.