‘Cleaning the office’ is hardly the most exciting job description, and doesn’t sound like a very lucrative occupation. And yet Minster Cleaning Services has a network of 42 franchises across the UK, and between them they turned over £35m in 2015 – a figure confidently expected to exceed £36m in 2016.
One of Minster’s top-earning franchisees last year enjoyed a turnover of £1.6m and took home profits of £170,000. That’s a lot of muck, making a lot of brass, and it’s a success story that’s been over 30 years in the making.
Mike Parker, managing director of Minster Cleaning Services, based in Birmingham, says: “The challenge for us is we’re seen as a commercial cleaning franchise, which might seem boring to some. What we’re really about is offering a management franchise that happens to be in the business of commercial cleaning.”
Parker joined Minster after a successful 30-year career with HSBC bank, including a spell as branch manager at New Street in Birmingham city centre. He says: “The good news about the sector is that our business is repetitive. That generates you cashflow – it’s pretty predictable. Most of the premises we will clean five nights a week, some seven days a week; if we keep doing our job right we’re doing all those next month too, day in, day out.
“It’s not like we’re selling a product multiple times to the same consumer. As a business model, it works well.”
Parker’s based at Minster’s million-pound head office in Erdington, which the company moved into last July. He oversees a team of 15 staff, who support the franchise network in four key areas – IT, marketing, operations and finance. Established in 1982 by chairman Alan Haigh, the company became a franchise network – and a full member of the British Franchise Association (BFA) – 10 years later.
“What do I know about cleaning?” asks Parker. “Not as much as some of my colleagues is the truth. But I have an operations team that knows a huge amount, and a network that knows a huge amount, leaving me free to focus on other areas of the business.”
Minster Cleaning Services – and franchising in general – offers a robust business model. Even in the last recession of 2007/ 2008, Parker estimates they only lost around 10% of turnover. That’s a figure, he says, an awful lot of sectors would have been quite happy with. Since then, Minster hasn’t looked back and has put on around £9m in turnover. He says: “In a recession, businesses start looking at the cost base. If they can trim back on cleaning they will, but they can’t do without it totally. Even if they try, the phone usually rings four or five days later when staff are complaining because they’re not prepared to clean toilets!”
Minster is the largest commercial cleaning franchise in the UK. However, while Parker will describe Minster as ‘a player’ in the commercial cleaning sector as a whole, he’ll happily admit they’re not a massive player, with even the most successful franchise only commanding around 1.5% of that territory’s business. This is largely by choice, however.
“The market is dominated by big national accounts, for example retail brands with hundreds of stores. We don’t compete for these because the margins are horrible,” explains Parker. “It’s not all about turnover – our franchisees are interested in making money and a long-term, sustainable business. We could turn over £50m by the end of the year if we wanted that type of business, but we don’t.”
One future strategy for Minster is splitting up some of its larger territories – not for the incoming purchaser, but 10-15 years down the line when they sell their business. Minster’s centrally managed marketing systems and processes provide branches with all the leads they require. It’s then up to individual branches to convert these leads into new clients which are managed locally. This, says Parker, gives Minster a huge strength and stability.
Most of the work is for professional offices, schools, car showrooms, with 20% of business coming from primary care medical and dental practices. Unlike some franchises, which insist their franchisees source everything through them at a mark-up, Parker insists Minster focuses on profiting from their trading alone.
Minster’s appeal to clients, says Parker, is their process and integrity – turning up when they are scheduled, and doing the job well. “It’s all about having a clear market positioning. We’re not trying to compete on price, but do we turn up when we say, and do what we say we will? We know our customers value reliability and consistency. If you get those two right, price is less important.”
Like Parker himself, many of the company’s best franchisees come from a successful management career on the high street. “None of our franchisees had any previous experience of the commercial cleaning sector – they don’t need it,” he says. “Our latest franchisee in Bristol, he’s ex-Lloyds Bank, with a track record of successfully managing groups of people which is attractive to us. After all, we’re a people business.
“Our biggest challenge is replacing one of our superstars when they choose to retire with someone as good, if not better. The risk is we don’t find someone good enough and that business perhaps declines.”
Future options which the Minster executive team is now exploring are international expansion and running another unrelated and non-conflicting franchise network alongside Minster. “We know we’ve got expertise in B2B marketing, so I can see us running another B2B franchise and applying our knowledge and learning to that,” says Parker. “It’s a logical next step, but it’s identifying the right opportunity.”
As well as being ‘repetitive’, another of the sector’s attractions, says Parker, is the slow rate of change when it comes to innovation. Technology may have introduced microfibre cloths and extendable poles for window cleaning, but robots have not made the human element obsolete just yet.
“I expected by now we would be fully engaged in robotic vacuum cleaners, but it just hasn’t happened,” he says. “Why? Because the technology’s still pretty unreliable.
“Technological innovations could have taken a chunk of cost out. The opposite is happening instead, and we’re seeing huge regulation around the National Living Wage, where you’ve got to keep negotiating prices.”
Away from the world of commercial cleaning, Parker is a Scout Leader at a group near his home in Kenilworth, Warwickshire. “It’s good fun, keeps me young and it’s great to be able to give something back to the local community. Parker’s own children clearly also keep the Minster managing director grounded: “I remember making that transition from HSBC to Minster, and my kids were of an age when they loved pulling dad’s leg. So it was: ‘Dad, what is the difference between Jif and Cif?’ My response was: ‘It’s paying for your university – shut up!’”
The British Franchise Association
In 1977, eight franchise companies came together to form the British Franchise Association, which promotes ethical franchising practice in the UK.
The BFA has formal criteria for membership and a code of business practice, with a standards-based approach to develop credibility, influence and favourable conditions for growth.
It’s the only voluntary self-regulatory body for the UK franchise industry, and other members include McDonald’s, Water Babies, Little Kickers, Clarks Shoes, Pitman Training and Toni & Guy.
The BFA holds two sets of annual awards, recognising its franchisors and their franchisees. Minster itself was a finalist in the headline category at the 2016 BFA HSBC Franchisor of
the Year Awards in June. And now Kevin Lawley, who manages the company’s Norfolk and Suffolk franchise, has been shortlisted in the B2B category for this year’s Franchisee of the
Lawley, another former banker, took on the franchise five years ago and has grown the business to a £1m-plus turnover, employing more than 180 staff. The awards will be announced at Birmingham Town Hall on 29 September, and can be followed on Twitter #FranchiseeAwards16.