The upfront fee is the number everyone looks at first. It’s printed in the brochure, it gets talked about on the discovery day, and it’s the figure people take to the bank. But plenty of new owners find the fee is only the start. The money that goes out in the first year often adds up to more than the cheque they signed to get in.
Ongoing Royalties and Marketing Levies
Most franchisors take a monthly cut of turnover once the business is trading. It’s usually called a royalty or a management service fee, and it pays for the support, the systems and the right to keep using the name. On top of that, there’s often a separate marketing levy that goes into a shared pot for national advertising.
These are charged on sales, not profit. So in a slow month, or a month where a big client pays late, the percentage still comes out. Anyone weighing up a commercial cleaning franchise should work out what those fees look like at different turnover levels before signing. Some agreements also have a minimum monthly payment, which can sting in the early months before the client list has built up.
Insurance
Cleaning businesses need more cover than people expect. Public liability is the obvious one, since clients will want proof of it before letting a crew into their building. Once there’s even one member of staff on the payroll, employers’ liability insurance becomes a legal requirement in the UK, with a minimum cover of £5 million.
Then there are the extras clients start asking for. Some contracts want cover for keys and alarm codes in case they’re lost. Others ask for professional indemnity or a higher liability limit than standard. A van needs business insurance, too, which costs more than a personal policy. None of these are huge on their own. Added together, they make a noticeable dent in the monthly budget.
Equipment, Chemicals and the Van
Many franchise packages include a starter kit, but it rarely covers everything for long. Vacuums wear out quickly when they’re running every night. Floor scrubbers and buffing machines are expensive, and some contracts won’t be possible without them. Mops, cloths and chemicals get used up week after week.
Transport is another big one. Carrying kit and staff between sites usually means a van, and that brings fuel, servicing and parking on top of the purchase or lease. A lot of owners are surprised by how much of their margin goes on diesel once they’re covering sites across a town. Before buying into a commercial cleaning franchise, it’s worth asking current franchisees how much they spend on kit and transport in a typical month, since the franchisor’s projections can be on the hopeful side.
Staff Costs
Wages are only part of what a cleaner costs. Employers also pay National Insurance on top, and holiday pay builds up from the first day. Most staff will need to be enrolled in a workplace pension, with the business adding its own contribution.
Cleaning has a high turnover of staff, so recruitment never really stops. Every new starter needs training and uniform. Some clients, such as schools or care homes, will insist on DBS checks, and those come with their own fee and admin time. Covering sickness at short notice can also mean paying overtime, or the owner going out to clean the site themselves at ten at night.
Cash Flow and Admin
Clients in the commercial world rarely pay upfront. Thirty-day invoice terms are normal, and some larger firms push for sixty. Meanwhile, wages go out every week or month without fail. That gap needs cash to cover it, and many new owners underestimate how much.
The admin costs creep in as well. An accountant is close to essential once there’s payroll to run. When turnover passes £90,000 a year, the business must register for VAT. That changes pricing and paperwork. Software for rotas and timesheets comes with a monthly subscription too. Some of these are bundled into a franchise package, and some isn’t, so it pays to check exactly what the management fee does and doesn’t cover.