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The Cost of Owning Anago Cleaning Systems Franchise
Starting from last year, hygiene and disinfecting have become the new normal. It’s also the perfect time to franchise a business related to cleaning services. So, if you’re searching for the actual cost breakdown of Anago Cleaning Systems, you landed on the right article. Here’s all you need to know about the commercial cleaning franchise and more.
Anago Cleaning Systems Overview
Anago Cleaning Systems started its cleaning service in 1989. In 1991, after two years in the industry, it started franchising as Anago Franchising, Inc. Over the years, Anago has managed to open an estimated 1,710 units.
The Training Program
You should know that the initial training is mandatory for a new Anago Cleaning Systems Franchise owner. The franchisee should complete the training within a total of 90 days after signing your “Franchise Rights Agreement.”
Overall, the length of the initial training is about two weeks. However, the training days can be decreased if you own an existing cleaning service business. Less training days are also possible if you have experienced working in business-related cleaning service for at least a year.
The training program comprises two types—classroom and on-the-job training. Its required hours may vary for both types depending on the franchisee’s expertise in a particular area. The franchisor may also provide additional training to franchisees at its principal training facility.
Also, other than training, franchisees should attend Anago’s annual seminar at their own expense at least once a year. Anago’s annual seminar lasts for two to three days at most.
Franchise Territory
Under the “Anago Franchise Rights Agreement,” the franchisees will be granted exclusive rights and license to operate. Furthermore, depending on the franchise program purchased, it will include a population within standard boundaries and statistics. The overall population depends on the program, but it has a minimum of 500,000.
Within 30 days after completing the initial training, the franchisee must commence the franchise sales, marketing, and development program. It’s a critical phase to fulfill and avoid losing territorial rights. Also, it’s vital to meet the minimum annual performance requirements indicated in the franchise Rights Agreement.
What You Need to Know
As a potential franchisee, here’s what you need to know about Anago Cleaning Systems obligations and restrictions:
- The franchise reserves the right to act as a cleaning service business under “Anago.”
- Each subfranchise are under an LLC or corporation classification.
- A shareholder or managing member must act as the manager.
- The franchisee should not delegate the obligation as a designated manager without the franchisor’s approval.
- Operations that are not related to Anago Cleaning Systems are not allowed.
- Other businesses operated within the franchisee’s Anago subfranchise office.
- Franchisees should open their establishment within regular operation hours as required in the manual.
- The franchisor sets the maximum and minimum price periodically for services and products.
Terms of Agreement
The initial length of the Franchise Rights Agreement is up to 10 years beginning on the agreement date. Franchisees have the right to renew their franchise for another year, given that they meet the requirements.
Anago Cleaning System: Financial Assistance
At the moment, the franchisor nor its agents do not offer indirect or direct financial assistance.
Did You Know
Before we jump to the cost breakdown, let’s get to know more about Anago Cleaning Systems.
- Anago is part of the list of the “Top Franchise for Veterans” last 2017.
- It’s been 30 years since Anago Cleaning Systems started its business.
- Anago Cleaning Systems shares cleaning tips and hacks on its Facebook page.
- As experts in the cleaning industry, Anago has its cleaning process called “the Anago Process.”
Your Investments
In this section, we’ll break down the actual cost of owning the Anago Cleaning Systems franchise. The details below are compiled from the 2021 FDD of the company.
| Name of Fee | Low | High |
|---|---|---|
| Initial Subfranchise Fee | $98,000 | $98,000 |
| Legal and Accounting | $5,000 | $15,000 |
| Marketing and Advertising | $50,000 | $100,000 |
| Travel Expenses for Training | $2,000 | $3,000 |
| Lease/Utility Deposits and Rent | $10,000 | $20,000 |
| Equipment, Fixtures and Computer Systems | $15,000 | $25,000 |
| Office Supplies | $1,000 | $2,000 |
| Vehicle Operating Expenses | $3,000 | $6,000 |
| Insurance | $5,000 | $15,000 |
| Miscellaneous Start-up Costs | $10,000 | $20,000 |
| Additional Funds – 6 months | $40,000 | $40,000 |
| ESTIMATED TOTAL | $219,000 | $339,000 |
Other Costs
Other than the breakdown above, as a potential franchisee, you should be aware of OTHER costs you’ll encounter, such as:
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 5% of the gross revenues, subject to a minimum monthly amount. |
| Training Fees | $500/day, if charged |
| Administrative Support Fee | 1% of the total monthly billing collected by the subfranchisor. |
| Billing and Collections Fees | An invoice servicing fee of the greater of $1,000 or 1% of the total monthly billing and $25 for each unit franchise statement. |
| Deficiencies | Reimbursement of the franchisor’s costs in performing the master franchisee’s obligations. |
| Anago NBDS Support and Access Fees | $200/month. |
| Anago Direct Marketing Call Center Fee | $1,525 – $3,050/month plus commission |
| Website Maintenance Fee | $1,000/month. |
| Transfer Fee | $10,000 transfer fee in lieu of an initial fee. No transfer fee for a direct family member. |
| Replacement of Manuals | No charge for initial set of manuals. The replacement fee is $500 payable to the franchisor. |
| Indemnification | Varies. |
| Enforcement Costs | Varies. |
| Miscellaneous Merchandise | Varies. |
| Sale of Unit Franchise Fee | $400 per unit franchise that the franchisee sells. |
| Performance Schedule Deficiency Fee | The amount will be $400 for each unit franchise below the required minimum, which is non-refundable. |
| Client Bid Schedule Deficiency Fee | $150 for each client bid below the required minimum that the franchisee failed to conduct. |
| Banking Fees | Credit card charges of 4.75% per transaction unless the franchisor’s cost to provide the franchisee this service is greater, in which case the franchisee will be required to pay the higher cost. |
| Advertising Enforcement Cost | Varies. |
| Advertising Fee | Up to 2.2% of the gross revenues during the preceding month to the fund. |
| Supplier Testing Fee | Reimbursement of the franchisor’s reasonable costs of the inspection and the actual cost of the testing. |
| Audit | Varies. |
| Insurance | Actual cost to maintain the insurance policy plus an additional 1% of the total monthly billing. |
| Non-Compliance Fees | $100 late fee for failing to submit reports on time. |
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