CLEANING IT ALL, PROFITABLY!

For time-starved urban Indians, grocery shopping and utility bill payments have moved online but they still have to spend a lot of time for laundry or other household chores. In January 2017, tech-enabled laundry service brand UClean entered the market to lead the online shift in laundry services. “We are trying to build a laundromat culture in India. Laundry, as a business, is extremely hyper-local in nature. All your customers are typically located within a radius of 2-3 km of your store and there are enough families within that locality to make the store profitably sustainable. This makes the concept highly scalable,” says Arunabh Sinha, founder, and CEO of UClean. Sinha was particularly impressed by the growth of laundromats in Southeast Asia – Malaysia, Indonesia, and the Philippines – and he decided to replicate the same model in India.

Initial Hiccups

UClean, which has scaled its presence to 33 cities via 110+ franchises, had a tough time finding business partners. As the company did not have any operational stores and, Sinha, an engineer from IIT Bombay, did not have prior experience in the laundry business, it was difficult to bring partners on board. “For about two months, I met around 30 prospects but could not get a breakthrough,” he admits. After struggling to secure investors for a brand which was unheard of, Sinha changed his approach and decided to reach out to the existing dry cleaners in the Delhi-NCR region. “I thought the idea of such a laundry business would be better appreciated by the dry cleaners who would be able to push it across to their existing customers,” says Sinha.

“It would give the traction that we needed at that point,” he adds. The idea paid off when a Gurugram-based dry cleaner decided to try out UClean’s pilot project. “Once we had the proof of concept, it became easier to get new franchises on board,” says Sinha. Without much tweaking the nature of the laundry business, Sinha took the franchise route to scale quickly and establish a pan-India presence. Talking about the franchisees’ profile, he says, “We strongly believe that it is highly possible to fulfill our ambition as long as we are able to recruit like-minded entrepreneurs in the system and enable and empower them as our franchisees. They are trained, equipped and handheld in building and operating their own UClean franchise store,” he says.

Expanding the Portfolio

Post-tasting success in laundry cleaning, the company forayed into premium dry cleaning service with the launch of its first UClean Select store in Delhi in May last year. “We plan to open 50 UClean Select outlets in Tier I cities in India by the year 2020,” Sinha says. The company has raised Rs 4 crore from angel investor Anubhav Chopra for expansion of its new business vertical.

Sanitizing Homes

The establishment of UClean led to another business concept. “When our pick-up and delivery champs went to the customers’ premises to collect dirty laundry, they started getting inquiries about allied services like home cleaning, upholstery cleaning, carpet cleaning, etc. Initially, we ignored it, but when we started getting such queries from multiple cities, that’s when we began to give it some serious thought,” Sinha states. But as home cleaning and sanitization was a different business – slightly more technical in nature – he decided to partner with a specialized player. This is when the company won the pan-India exclusive master franchise development rights for the world’s leading home cleaning brand Chem-Dry.

“With rising home pollution due to bacteria, dust, germs and dirt, the health and hygiene concerns of families are increasing. Through the combination of UClean and Chem-Dry, we aim to fully sanitize and disinfect homes and provide the healthiest environment for a family to live in,” says Sinha. Chem-Dry is now a part of the UClean Group and both work in a complementary manner whereby UClean takes care of the dirty laundry while Chem-Dry looks after the cleaning the dirt from homes. The customer is still the same. The combination package is slated to yield tremendous benefits. And the expansion plan continues with more franchisees coming on board. For a franchisee, it calls for an investment of about Rs 17-18 lakhs in owning and operating a Chem-Dry unit of its own.

In its pilot phase, Chem-Dry has been launched in Delhi. Both the companies work together on a commission basis. UClean already has access to about 20,000 customers in Delhi-NCR region and the leads generated from there are passed on to Chem-Dry. In this business model, Chem-Dry pays 20% of the value of the order to UClean when the lead turns into an active order. This model will be replicated across India.UClean now plans to have 200 operational stores by the end of the year. UClean is also in the process of acquiring a car washing company. “The idea is to take care of all the cleaning needs of the customers. Car washing is the only vertical left to be able to provide a customer the complete package,” Sinha states.

Creating the Right Network

Arunabh Sinha, the founder of UClean, says that it is important to get such franchisees on board who have the right mindset

What’s the average bill size and order that you are generating?

Laundry is a business that has a very high purchase frequency and the average bill size is Rs 300 while in the case of Chem-Dry it is Rs 3,000. The average order at a store level is 15-20 per day.

What’s the biggest learning in franchising?

The relationship should be founded on transparency and expectation setting should be right from the very beginning. Or else it creates a lot of discord between both the parties. A lot of franchisees come on board with a mindset that they are acquiring a formula to success – which is not true. While franchising is a formula to success, it also involves a lot of time and energy to be invested by the franchisee as well.

How do you maintain a long-term relation with a franchisee?

As a company, we give a lot of liberty to our franchisees. For instance, we allow them to decide the prices locally, offer packages, etc. But they are not allowed to diverge from the brand standards. We run a programme called UClean Inner Circle which is a crowd-sourced mystery audit programme. We regularly monitor our franchises but we give them creative liberty at the same time.

Franchise Facts - UClean