Fifteen years (seven as Managing Director) is a long time to be with a company but for Alan Lewin it has flown by.
Fifteen years (seven as Managing Director) is a long time to be with a company but for Alan Lewin it has flown by. "It really doesn’t feel like it, partly because I’ve had three different roles during that time. In many ways it feels like I’m just getting started."
A major part of the ServiceMaster allure for Alan has been its strong range of brands, as well as a proven and sustainable business model - a point he quickly picked up on in his first role as Director of Business Development. Then, the focus was on building the company's national account trade with UK-based general domestic insurance companies, who typically have panels of suppliers, providing specialist emergency responses to policyholders submitting fire or flooding claims, for example.
As Alan explains: "In this context ServiceMaster would act as the main contractor on behalf of our ServiceMaster Restore and Furniture Medic franchisees who specialise in fire and flood damage mitigation, restoration and recovery."
He adds: "After a few years my role developed to have more oversight of other direct business development and sales channels, initially taking in the commercial cleaning sector securing national and regional contracts; eventually taking in the indirect consumer channels marketing and customer services functions as part of a promotion to the UK board of directors of ServiceMaster Ltd in 2010."
Over the years the core elements of the company's services into each market have evolved incrementally, including bringing in more efficient machinery/equipment, as well as overhauling proprietary branded cleaning products to reflect higher environmental requirements/standards.
While ServiceMaster is always going to rely heavily on people to deliver the majority of its consumer facing services across all markets, the routes to those markets have, unsurprisingly, been evolving too - not least in the area of e-commerce. As Alan puts it: "The relatively recent (and) successful introduction of e-commerce to our Merry Maids home cleaning and ServiceMaster Clean carpet cleaning networks has been one of the significant step changes which we are excited about."
Yet it hasn't been without its challenges - especially the technical element of designing, building and implementing e-commerce, although these were reasonably quickly overcome by the team from ServiceMaster and its software development partner, according to Alan. "We went from concept to launch in a few short weeks. We piloted it through our own locally operated carpet and upholstery branch operation," he notes.
Though consumers have reacted favourably franchisees were initially less than convinced, even though they'd been consulted during the concept, development and release phases. "The scepticism was understandable as for over 40 years a significant proportion of our sales process involved someone from the franchise visiting a prospective customer in their home to survey and quote for the work, which worked well in many aspects but is relatively inefficient. The ecommerce route meant challenging our established mode of operation and therefore a significant amount of change in both practical terms and mindset," says Alan.
Fast forward and franchisees are now doing an increasing amount of business through this channel in what Alan describes as a 'win win' for franchisees, consumers and the brands.
Indeed, the company, which can trace its origins back to 1929 Chicago, delivers a number of brands and services, including the UK where it operates six brands and eight franchise formats. These include Merry Maids, a domestic cleaning service; TruGreen, a professional lawn care service and Furniture Medic, which provides repairs and restoration to furniture.
Also, there is Rosemary Bookkeeping, offering bookkeeping services to SMEs and accountants; ServiceMaster Restore providing property damage restoration following fire and flood events, and ServiceMaster Clean, which has three separate networks running daily office cleaning and janitorial services, commercial speciality cleaning of floors and upholstery, and a residential carpet, hard floor, and upholstery cleaning network.
In October 2020 ServiceMaster, became known as ServiceMaster Brands. It currently operates a network of 1,940 franchisees through its portfolio of five brands in 50 states in the US and nine countries, including the UK, where it has around 250 franchisees operating over 700 territories.
Describing ServiceMaster as a franchisor, first and foremost - indeed it was one of the original founding members of the British Franchise Association (bfa) - Alan points out that whilst the company's brands are diverse: "The services are all considered to be essential; we operate within established markets, with recurring and sustainable revenue sources. (But) they could be further refined as relatively low transactional value services, which are highly valued by consumers."
Meanwhile, the progressive digitisation of ServiceMaster across all its networks and the franchise support centre is described by Alan as a complex yet transformative initiative and is seen as essential to "deliver efficiencies and competitive advantages across the UK stakeholder groups for the short, mid and long term."
Ultimately though, digitisation is still about people and how they adapt, not least in the case of would-be franchisees. For that reason, ServiceMaster is looking for 'intrapreneurs' rather than 'entrepreneurs' according to Alan. In other words, people who want to buy into a system, and are prepared to apply a system rather than reinvent or challenge systems and processes within the business model.
That's not to say new ideas aren't encouraged, however. "Our business models are always evolving, incrementally and good ideas are always encouraged from our franchisees."
And he adds: "To facilitate the development process of the respective business models, each network has a group of representative peers who meet with the team at the ServiceMaster support centre on at least a couple of occasions throughout the year. During these meetings we review development ideas and discuss opportunities within their respective networks."
Meanwhile, would-be franchisees considering taking the plunge with ServiceMaster face relatively low entry fees, ranging from £10-60k.
In addition to the licence cost there is a comprehensive training academy and start pack. Each new franchise fee includes the initial training required to operate the franchise, as well as sufficient operational equipment, materials and consumables to get started. There is also enough marketing collateral - both digital and printed - to successfully see the franchise past its initial launch and generally well into its first year of trading, according to Alan.
The cost of the academy and start pack ranges from around £6 to £20k, depending on the franchise. In addition to the start-up costs above, the franchisee will need sufficient liquidity in working capital to sustain the business as revenues begin and grow. This will vary, depending on the franchise opportunity, though generally will range from £10k through to £50k+.
Beyond the initial investment for licensing, training and business launch, there are ongoing fees associated with the tenure of the franchise, such as Management Service Fees (MSF) - their rates varying across the brands and taking the form of either a fixed monthly fee, or a fixed % based on gross revenue. In some cases, there are volume related reductions applied, based on increased revenue thresholds being reached.
Also, all networks have some form of contribution to national promotion funds, which tend to be relatively low monthly payments of between £30 to £60 with a further small amount as a % of the revenue of the licence in some cases, according to Alan.
Whilst these figures generally relate to the contracted costs associated with the acquisition and lifetime of ownership and operation of the franchise, there are additional (though optional) marketing and technology services franchisees can either subscribe to or utilise on an ad hoc basis.
Operationally, each of the brands is effectively run as a business unit with its own Brand Leader who has a significant amount of autonomy and scope to develop and evolve operational processes. This approach ensures the business model for each brand continues to perform against the standards and demands requisite of its markets.
It also allows best practices to be shared and adopted across networks, and identifies any additional centralised service requirements or enhancement opportunities, according to Alan. "The brand leader is also heavily involved in both franchise recruitment for new territories, (where they are available), and resales of established businesses within their network. This is achieved with the help of our franchise recruitment team," he adds.
Also, each network works with a marketing manager, who will coordinate national campaigns funded by the brands’ national promotion fund, they will also work closely with individual franchisees on their local marketing, and business development plans, Alan further notes.
Even after factoring in frontline support functions such as HR, business development and customer services for national and regional accounts, finance, IT support, & legal and so on, the important point to stress is that all of these services are generally covered within the MSF, which is paid by the franchisee. Hence, there is usually relatively little or no additional cost to the franchisees for most of the support services.
In the meantime, there is a product support and distribution centre in Leicester, tasked with stocking and supplying many of ServiceMaster’s proprietary, branded, high-performance cleaning and restoration products, and consumables to franchisees on a next day delivery service across the UK.
For those interested in pursuing a franchising opportunity with ServiceMaster the process is a simple enough one; starting out with an initial telephone call/virtual meeting with a member of the recruitment team.
As Alan describes it: "Assuming both parties want to, and are able to progress, it’s likely that we would recommend a further amount of research and due diligence on their part and set up another meeting to discuss options in more detail," adding : "depending on the level of interest around this point we’ll introduce a non-disclosure agreement to ensure both parties are free to disclose information to ensure appropriate transparency and openness as well as the protection of our intellectual property."
As early as possible in the process the prospective franchisee will meet with the brand leader with whom they're likely to be working. "This is important because if they do decide to invest in one of our franchises, we want to know that they are able to work with each other," says Alan.
Assuming the point is reached where all parties are satisfied - and before any franchise agreements are drafted or any money changes hands - a formal application process - involving background financial checks - will kick in.
If all remains good to go the franchisee will embark on an initial training course called the academy of management, which is usually an intensive week or two-week long intensive classroom-based programme, depending on the franchise model. "Upon graduation from the academy we then launch their business with a local marketing campaign," says Alan.
Throughout the tenure of the franchisee ServiceMaster provides a comprehensive level of support to its franchises and their staff - this being delivered either directly through ServiceMaster's own franchise support centre team, or via "a limited number of carefully selected vendor partners in some of the specialist specific service lines."
As Alan adds: "It’s in our interest to provide the best possible ongoing support because as well as a fulfilling and rewarding experience for our franchisees, the long-term success of our franchisees is an essential part of our sustainability, growth and development as an organisation."
Yet there are always new goals/new challenges, of course, some of which are driven by wider macro socio economic/environmental factors. And like all businesses "we have to anticipate, evaluate, respond or adapt to," Alan notes.
Indeed, he acknowledges the combined effects of Brexit, COVID and the continuance of the furlough scheme and how it has affected the domestic labour market.
"Very recent reports suggest that the demand for labour is currently outstripping supply with record numbers of vacancies currently being posted on jobsites. Despite the factors mentioned, generally, I’m optimistic about the long-term prospects in all of the markets across which we operate and our franchisees will certainly make the most of any situation. "
Indeed, as a multi brand franchisor in the UK, the company must develop and evolve its brands and their operating systems for the UK markets it serves, according to Alan.
"The primary function of our team at the franchise support centre is to provide support, development and inspire our current franchisees to achieve and exceed their goals. We also have a need to continue to recruit new franchisees to join our networks as this is an essential part of the lifecycle of each of our networks."
He adds "Our brands and their respective offerings must also compete, build value, and remain relevant to service consumers across the markets served by our franchisees and their teams. There is always a significant amount of work to be done."
When it comes to leadership, culture, strategy and performance are Alan's three areas of focus, his work over the last few years having been to build the optimum environment for continued growth and success across the UK business.
"My leadership to this point has largely been cultivating and building the right culture and in doing so building a mix of experienced and emerging talent within a team with a shared belief in our bigger purpose, whilst enabling an operating environment that is fit for that purpose," he notes.
That also means adhering to the company's core values of 'We Serve'; 'We Care' 'We Deliver' and 'We Do' that lie at the heart of the business. In other words, helping franchisees build their businesses/legacies; enabling them to serve their customers in their time of need; and developing the company's own people and their potential.
Taking a longer term (5-year) view Alan says: "There is a significant amount of head room in each one of the markets across which we operate and we would like to win our share of that. The global ambition is to reach $5 billion in system wide sales and our team here in the UK fully intend to make our contribution to that ambition count."
It's an ambition that's certainly realisable.