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How to finance a cleaning service franchise

Make money by taking care of the cleaning tasks that others don't have time to do.

According to Jan-Pro, the cleaning industry in Canada generated more than $8 billion in revenue in 2018 – an increase of 2.8% since 2013. There were almost 30,000 businesses employing more than 132,000 people. This is an in-demand industry that both businesses and individuals are willing to pay top dollar for. If you’re looking to buy into a franchise or start your own business, the cleaning industry may be your chance to run your own company and set your own schedule.

Top loans to compare to finance a cleaning business

1 - 3 of 3
Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
OnDeck Business Loan
8.00% – 29.00%
$5,000 - $300,000
6 - 18 months
6+ months
Secured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000.

OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.
Merchant Growth Business Loan
12.99% - 39.99%
$5,000 - $500,000
3 - 12 months
$10,000 /month
6 months
Unsecured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales.

Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.
Loans Canada Business Loan
6.60% - 29.00%
$4,000 - $500,000
3 - 60 months
over $10,000/month
100 days
Unsecured Term
To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year).

Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.

What options do I have to finance my cleaning business?

Unlike many other franchise options, cleaning service companies tend to have much lower starting costs than other industries. This makes it easier to gather the funding and liquid capital you’ll need to start your business.

  • Franchisor financing. Some franchisors offer financing to potential franchisees, so consider different cleaning service franchises and compare your options. There are even companies that offer discounts, so don’t be afraid to talk to your franchisor about reduced rates for your particular circumstances.
  • Small business term loans. Term loans have both secured and unsecured options – so you can decide whether you’d like to put up collateral or not in order to receive funding. You’ll need to meet the eligibility requirements before you apply and can usually get approved for amounts between $1,000 up to $1.25 million. Choose between short terms loans offered by online lenders, banks or credit unions – with online lenders usually offering the most competitive rates and fees.
  • Canada Small Business Financing Program (CSBFP) Loan. You can apply for these loans through a chartered bank, credit union or a caisse populaire. They are at least 75% backed by the Government of Canada. Your business must make under $10 million in revenue annually to be eligible for this program.
  • Equipment loan. Many cleaning franchises will start you off with the basic equipment you’ll need to run your business. But if you expect serious growth quickly, you may want to get an equipment loan for anything from an industrial carpet cleaner to a series of high-powered vacuums. The equipment you buy acts as collateral – which means you’ll lose it if you default on your repayments.
  • Auto loan. Your franchisor may not cover the van you need to transport your staff and equipment to work sites. In this case, a business vehicle loan may be appropriate. Like a personal auto loan, your vehicle will act as the collateral.
  • Line of credit. An open line of credit can help your business cover those random expenses you may not have foreseen in your research. This option is similar to a term loan, but rather than receiving a lump sum and paying interest on the total amount, you only pay interest on the amount you actually borrow.

Representative example: Jillian buys a cleaning franchise

Jillian has been working independently as a cleaner in Ontario for about 5 years but has found herself struggling to compete with the larger, franchised cleaning services that have begun offering services in her area. After reading about the benefits these franchise owners receive – including liability protection and free marketing – Jillian decides to quit working independently and purchase a franchise of her own.

Besides paying $500/month in royalties, she’ll have to pay a $35,000.00 franchise fee + 13% HST upfront. This includes the base cost of the business, a transfer fee for reviewing her application and orientation/training costs. While Jillian feels confident her existing clientele is large enough to cover the monthly royalties, she needs help paying the franchise fee and sales tax.

Jillian applies for a business loan from an online lender. Thanks to her solid credit score, she is approved for a loan of $39,550.00 with competitive terms. She signs the loan documents, and the funds are deposited into her account within 2 business days. Note that, as a GST/HST registrant, Jillian can treat the HST she paid as tax deductible on her next business tax return.

Cost of purchasing a cleaning service franchise$35,000.00
Loan typeBusiness loan (term loan)
Loan amount$39,550.00
Interest rate (APR)7.90%
Loan term5 years
Additional feesOrigination fee of 3.00% ($1,186.50)
Monthly payment$800.04
Total loan cost$48,002.40

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

7 popular cleaning franchises in Canada

Every franchise has its own fees, royalties and other costs that make the initial purchase and startup of your business differ. In addition to the fees listed in our table below, you’ll need to have liquid assets as detailed by the franchisor – and enough capital to run the day-to-day of your business to get it off the ground.

CompanyEstimated franchise cost
Jan-ProMinimum of $35,000 investment
Adele$25,001 – $50,000
Chem Dry$25,001 – $50,000, plus royalty of $495
MyMaid$25,001 – $50,000, plus royalty of 5%
Steam Dry Canada$25,001 – $50,000, plus royalty of $600
FibreNew$50,001 – $100,000, plus royalty of $575
Maid Simple House CleaningMinimum of $10,000 investment

*Estimated costs accurate as of September 2019.

Franchise loan terms

When you buy into a franchise, you likely aren’t buying it outright. Many franchises have term limits between 5 to 20 years. If your business is doing well, you may be able to renew your contract to keep your franchise going. If not, your contract will be ended and you’ll cease being able to use the franchisor’s materials and name.

This is common in all franchises – not just the cleaning industry. It helps protect both you as the business owner, as well as the franchisor. After all, if things aren’t working out, a shorter term means you can switch franchises or brand your own business — that is if your contract doesn’t have a non-competition clause. When browsing franchise opportunities, see if you have a right to renew or have the option to continue the franchise contract, provided your business is in good standing. Without a right to renew, a franchisor has no obligation to offer you another term.

As with all business options, your franchise agreement should be looked over by an experienced lawyer to ensure you aren’t left in the dark when it comes to your options.

What other costs do I need to consider?

Most franchises have an ongoing fee structure that you’ll need to pay into in order to keep your license and operate your cleaning business. In exchange for the right to use the franchise brand name and business structure, you’ll pay ongoing fees to the franchisor to be part of the franchise group.

In many franchise industries, ongoing franchise fees are calculated as a percentage of gross income, with fees ranging from 2% to 15%. That said, some franchisors will charge a fixed monthly fee, giving franchisees the incentive to increase their customer base and their income without paying correspondingly higher fees.

Beyond the price of having a franchise, you also need to factor in the regular costs of running a business. These include:

  • Paying your staff. Labour doesn’t come cheap, especially when you’re running a business that relies on picking up other people’s messes. In order to keep things sanitary and clean, you should have the budget for a competitive salary that gives your employees a reason to do their job well and stick with you.
  • Administrative support. No matter your staff size, you’ll likely need an administrative support team to take care of invoicing, bookkeeping, appointments and other administrative duties.
  • Equipment servicing. Some cleaning service franchises will include the initial equipment needed to perform the cleaning tasks – but you’ll still need to service and maintain the equipment at your own expense.
  • Consumables. You’ll often receive an initial supply of cleaning products, uniforms, stationery and other business consumables when you purchase your cleaning service franchise. But you’ll likely need to replenish your supplies yourself at regular intervals.
  • Rent. If your cleaning service franchise requires an office or physical storefront, rent will be a significant expense to consider. The amount you pay each month will depend on your location and the space you need to store your equipment.

Cleaning franchise vs. independent cleaning business

Before you start looking into franchises and finding loans, you should know what type of business you want to start. Decide whether you want to pursue a franchise or build a new business from the ground up, then browse your options.

  • Cleaning franchise. There are dozens of companies across Canada that specialize in commercial or house cleaning. Like other franchise options, you can buy into one for a set fee and use the company’s name and marketing tools to create demand for your services.
  • Independent cleaning business. If you already know how to run a business and are familiar with the way the janitorial industry works, you may want to start your own business. This gives you the freedom to do whatever you want, but you’ll have to compete with well-known name brands already servicing your local area.

Tips on starting your own independent cleaning business

While it’s best to explore your options and talk to professionals who have run their own cleaning businesses, these quick tips should get you started on the road to operating your own company.

  • Create your business plan. The first step to any successful business is the business plan. Understand what you need to do to set yourself apart from the competition and create a set of goals that will take you there.
  • Register your business. Once you’ve constructed a solid business plan, it’s time to put your hard work into action. You’ll want to register your business and have it licensed. File for insurance that covers you in case anything is lost, stolen or broken while in a client’s home or place of business.
  • Determine your prices. Part of your initial research into other cleaning businesses should be the amount they charge per hour. Many domestic cleaning services charge between $25 and $75 per hour. You’ll want to set your fee to remain competitive.
  • Build your client list. After your business is properly registered and you know how much you intend to charge, start building your client list. Contact local businesses, send out fliers and post on job boards. You won’t want to purchase any supplies until you have at least one client. After all, things may not pan out, and you don’t want to have excess supplies laying around.
  • Work hard. Build your website, clean with care and take the time to build rapport with your clients. The secret to success with any business is to do your job well, and if you can set yourself apart from the rest of the cleaning services in your area, you may find yourself running a top-notch business.

How do lenders determine approval?

Lenders weigh the strength of your business model against other factors, such as your personal credit score and the market demand for another cleaning business in your particular region. Banks and other financial institutions tend to view franchises more favourably than independent startups because of their proven business models, however, that doesn’t mean you won’t be able to find financing for your own company. It also doesn’t mean you’ll be automatically approved because you’ve joined a franchise.

The type of loan you request also plays a role. Secured loans tend to be easier to get approved for since you’re required to provide collateral, and they typically come with more competitive rates. Unsecured loans usually have higher rates, but you don’t risk losing your collateral if you fail to make repayments.

Your credit history influences a lenders decision as well. Your credit score, background in the industry and business plan shows lenders that you know how to handle yourself under stress, run a successful business and responsibly pay back what you borrow. Whether you’re buying into a franchise or starting your own company, lenders want to see that you know what you’re doing and have a history of management skills – both professionally and financially.

Compare cleaning franchise financing now

How profitable are cleaning companies?

The profitability of your cleaning service will depend on its size, the local market and the type of clientel your business has. Cleaning companies tend to have stable business models, and the profits and income-earning opportunities are unlikely to fluctuate significantly.

Unlike many other franchise businesses, those who invest in a cleaning service franchise tend to do some of the work themselves, whether that’s taking on cleaning jobs or managing the office. This reduces the need for extra staff and increases profits – but it can make your business more hands-on than you’d like.

This is even more true for independent cleaning businesses. You’ll be doing much of the initial work, but the profits will largely be yours.

Businesses tend to pay more for cleaners than individual households will. However, a commercial cleaning company will likely need more staff. Your business model should reflect this, so do your due diligence when researching franchise options to see how much you can expect to make as a commercial cleaner versus a domestic cleaner.

The profitability of the cleaning service depends on the hours you’re willing to put into the business as well as how in-demand your services are. With a good attitude and professional, hard working staff, you’ll likely be able to make a decent profit operating your own commercial or house cleaning business.

Bottom line

When you’re considering the purchase of a cleaning service franchise or want to start your own business, remember that your initial investment needs to reflect the goals of your business. While you should find financing that suits your business now, plan for expansion and find financing that will continue to work for you in the future.

Check out our main business loans guide for more financing tips.

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