Making clean, clear and healthy profits
May 04, 2012
By: Namita Bhagat | 0 comments |
Committed to high standards of health and safety, and ‘green cleaning’, New Zealand’s Crest Clean Housekeeping is set for worldwide expansion. In an interview, Grant McLauchlan, MD, Crest Commercial Cleaning Ltd, shares company’s growth plans in India.
Namita Bhagat (NB): Brief us on the origin and concept of ‘Crest Commercial Housekeeping’? What is its Unique Selling Position?
Grant McLauchlan (GM): CrestClean provides cleaning and building maintenance services to the real estate market. Developed in New Zealand and operating since 1996, CrestClean has over 320 franchised business operators, and a Master Licensee in New Delhi, India. The company provides a full business and Information Technology (IT) platform for the operation of a large-scale cleaning business. CrestClean's proprietary systems include industry leading training programmes, operational procedures, Health and Safety protocols, marketing, Internet and customer service systems. The IT system operates on customised platform of Microsoft Dynamics GP and Microsoft CRM, providing invoicing, payments, customer information and communications, call centre, job scheduling, centralised billing and financial compliances.
In India, where cost of labour are cheaper, the structure is that of regional franchisees based in different cities and provinces who build and operate an employee based business model.
In both cases the IT platform has been provided by CrestClean, with centralised call centre, administration, job scheduling, training, invoicing and payments.
A standout feature of CrestClean’s business system is the training programme. This features many graphics and illustrations that aid learning and assist with comprehension by different cultures and levels of literacy.
NB: When and how did the brand enter the India? What is the brand's franchise model in the country?
GM: CrestClean’s business system has been successfully licensed to India and it currently operates in New Delhi. CrestClean India has over 700 staff providing cleaning (housekeeping) and property services for a selection of large-scale sites. With the growth and westernisation of Indian cities, there is a strong demand for property services provided to a western standard. CrestClean’s New Zealand developed training programmes have been very successful in preparing local personnel for a career in the cleaning industry.
Presently, the Delhi business is operated as a corporate model, with the Master Licensees building an organisation with conventional corporate structure. They have employed a locally based team of managers, support and office staff, and a labour force of cleaning personnel who are employeddirectly. In the future part of the city could be sub franchised, with the sub-franchisee responsible for creating sales in a geographical area.
NB: How many locations do you have currently in India?
GM: The Indian pilot operation has been trading in Delhi with his headquarters located on South Delhi. Strong growth is forecast for the operation thanks to accounts with Indian government agencies, schools and medical services.
NB: What is the area and capital needed to partner with the brand, as a franchisee?
GM: There are varied parmateres for this:
1) The number of sub-franchise regions and their geographical areas range from a situation where the Regional Licensee within the territory owns the entire organisation, or that sub-franchises are created and sold down to local entrepreneurs based upon precincts or geographical areas. The sub-franchisee would take the role of the local manager, driving the business growth. Employed personnel would perform the cleaning services.
2) Ownership structure and royalty spilt of local franchises could range from 100 per cent franchisee owned units with a percentage royalty, through to joint venture sub-franchises, with a percentage of ownership from the Regional Licensee.
3) Invoicing and payments could be centralised and under the control of the Regional Licensee, or they could be regionalised and administered by the local sub-franchisee. Considerations would be the local commerce systems, local taxation systems and general logistics.
4) Indicative investment value or Regional Licence Fee, Mumbai: US$1,00,000 and System development: US$ 85,000
NB: What are the qualifications for a franchisee to partner with your brand?
GM: We are seeking expressions of interest from existing companies servicing the Real Estate marketplace or business savvy individuals who have an entrepreneurial outlook. Whilst the Licence fee and set up costs are relatively economical, it is important for a Master Licensee to have access to a strong balance sheet in order to fund the company’s growth. Suitable Master Licensee would need to have contacts in commerce, Government and the business community, and have the financial resources necessary to grow a major enterprise that would capture a significant stake of the cleaning marketplace within their region.
NB: What kind of marketing and support do you provide to your franchisees?
GM: CrestClean will assist with the implementation and integration of the operating system into the Regional Licence territory. Full training will be made available for personnel in New Zealand, and CrestClean is able to provide an interchange of its experienced personnel to work within the acquiring company for agreed periods, to give on-going advice, and to maximise the potential of the system.
NB: Could you share break even period –ROI facts for the franchise?
GM: The CrestClean business opportunity will provide the Master Licensee with significant financial returns. There is the potential to create multiple revenue streams, including income from cleaning and housekeeping services, income from franchise sales, income from sales of consumables, income from the provision of other contracted services including property maintenance, window cleaning, and other services that customers may request.
NB: What are the challenges for the brand in India? How do you propose to compete with other local/global brands operating in your business space in India?
GM: As the Indian economy becomes more sophisticated, customers, particularly international Corporates are demanding better hygiene standards. Many people tell us that one of the big barriers to doing business in India is hygiene and so we are seeing savvy companies starting to make that a priority.
Competition for customers is tough. In developing countries traditionally there have been no recognised participants in the cleaning sector. There is great opportunity to enter the market with a branded, professionally established cleaning company with proper western systems, training and processes.
NB: Kindly share the brand’s further expansion plans in India and other world markets?
GM: CrestClean will promote the business model into other Indian cities, and target the sale of country licences to Singapore, Malaysia, Vietnam, Korea, Philippines and Indonesia. While India and Singapore India are our focus over the next two years we are looking at expanding into other Asian countries and the Middle East beyond that.