Franchise Help Sits Down with Cleaning Franchise Oxi Fresh
What is the average capital needed to purchase a franchise and does it vary depending on the industry (is it more for restaurants than for carpet cleaning franchises)?
Average capital needs for business with real estate requirements, such as restaurants, car washes and retail stores, will easily range from $250,000 to several million. Businesses such as carpet cleaning and other home-based services will typically range from $30,000 to $100,000. The Oxi Fresh franchise capital requirement is typically $40,000
Do you have any rules of thumb you could share with us, which under no circumstances you bend or break with running your business?
Whenever we have a tough decision to make, we always look at our value statement and then make our decision. Every member of our team makes a point to follow our code of values in everything they do, whether they are scheduling appointments or in the field cleaning carpets. Our code of values is to be F.R.E.S.H.
*Have fun and enjoy all that life has to offer
How big of a role does location play on the success of a franchise?
One of the benefits of Oxi Fresh is that it is a home-based business. Franchise owners do not need a storefront or physical location to run their business. Franchisees use different marketing depending on if they are in small or large markets, but regardless or the market, our franchisee can prosper. We have franchisees across the nation in various locations-from major cities to suburban areas - that are successful. I attribute their success to our turnkey marketing, our revolutionary cleaning system, and their desire to grow their business.
Is there a limit to how many franchises I can own? Does it vary by location can I have one in each state?
With Oxi Fresh, there are no such limitations. As a franchisor, we prefer to see a franchisee select one area in which to start, and then show us that they can handle the one business before expanding.
Can I own competing franchises? What about non-competing franchise opportunities?
Oxi Fresh likes to work with owners of other franchises. This has the advantage of protecting an entrepreneur from varying market conditions, as well as leveling out cash flow if a business is sensitive to climate or geographic conditions. However, Oxi Fresh does not allow franchisees to own competing franchises.
How much freedom does a franchise owner have over the franchise he purchases? Are there certain things that cannot under any circumstances be changed or altered? Moreover, if altered at what cost?
It is definitely important for Oxi Fresh to protect its brand, and ensure that customers get the same great service regardless of their city of residence. Although many things within our system are standardized, franchisees still have the flexibility to adjust some parts of the business to fit their particular market. For example, our franchisees cannot add or change what services we offer, but they can change how much they want to charge, how long the service will take, drive times, etc.
If a franchisee wants to do something outside of our normal parameters, they can certainly do so as long as it has been approved by our home office. Approval is easily granted as long as the idea fits within our brand and is consistent with our values.
Does a franchisor receive a percentage of the revenue from each franchise?
In most franchise systems, this is true, and it could be as much as eight or ten percent of the gross revenue. At Oxi fresh, we have a set Royalty Fee of $295 paid monthly by the Franchisee. We also have a Scheduling Center fee to cover the cost of owning and operating our own centralized scheduling center.
Have you ever had to close down a specific franchise and why?
Unfortunately, we have had to close a few locations, where the franchisee abandoned their business. We’ve found that when this happens, there are usually much bigger issues at work outside of our control preventing the franchisee from continuing to operate his or her business.
Do you have any advice for a young entrepreneur looking to start a business and possibly become franchisors as well?
I would say that you turn your thoughts into your actions, your actions into your habits, your habits into your character, and your character into your destiny. Dream big and then take action.
Strategic and Structural Alternatives to Franchising
These are difficult decisions. The solutions are not clear cut from a business or from a legal perspective. It is critical that a company in this position work with qualified counsel to identify an alternative that will have a reasonable basis for an exemption and still make sense from a strategic perspective. The balance of this chapter will look at the many alternatives currently being tested by many U.S. and oversees companies. As you can see, the lines of demarcation are not always clear. The differences between many of these alternatives may in fact be in name only. Some of these concepts are truly innovative and have not been truly tested by the courts or the regulators. In these borderline cases, a regulatory “no-action” letter procedure is strongly recommended. Other concepts are not very innovative at all and merely borrow from long-recognized and analogous legal relationships such as chapter affiliation agreements in the non-profit arena or network affiliation agreements in radio and television broadcasting.
Getting in on the Ground Floor with an Emerging Franchise Company
In addition to the due diligence that should be performed, be sure that you and your advisors focus attention on:
When a Franchisor Files for Bankruptcy
This article provides a brief history of some well-known franchisor bankruptcies of recent years -- including Denny's, Bennigan's, Steak & Ale, Original Roadhouse Grill, Cork & Olive, The Ground Round, Church's Chicken, Popeyes, and 7-Eleven -- with a look at the outcomes of these bankruptcies for both the franchisors and their franchisees.