News About Mint Condition

Unique Office Cleaning Franchise Business
Growing Nationally, Aided By Recession
August 2009

            A couple of years after Sunil Marolia helped to sell a growing California software company to Hewlett Packard, he got the itch to own his own business. He began an intense search for a proven business franchise that he could purchase and grow in spite of the recession.
            The one he chose is based 3,000 miles away in a business sector that might seem unlikely – office cleaning – until you look at it the way Marolia did.
            Mint Condition Inc., the national office cleaning franchise Marolia chose, is experiencing constant growth from coast to coast while many other business sectors are struggling to survive.
            “It is interesting that we are attracting master franchisees who are all former business executives, people who could have gone anywhere in the marketplace, but they are choosing to purchase one of our master franchises,” said Jack Saumby, president of Mint Condition Inc., located just south of Charlotte, N.C. “We think it’s because our business model is unique – highly recession resistant and potentially very profitable – and because these executives are looking for something dependable to own as opposed to being in the corporate jungle.”

Satisfying Demanding Requirements

            Marolia, a bright high-tech engineer with an MBA from the University of California, Irvine, said, “Ultimately, Mint Condition was the only business that fully satisfied the specific criteria I had developed when looking for a business:
            “1. Large market potential – I was looking for a business that had a large enough market that would meet my long-term financial goals.” His franchise is Orange County, Calif., the fifth most populous county in the U.S.
            “2. Domestic business hours – For nearly the past decade, I had been in an executive role with an international company which became extremely demanding on my personal time. Heavy international travel combined with daily meetings with Europe and Asia created a situation where I no longer had any predictability on my schedule, which began to significantly impact my personal life.
            “3. Recurring revenue – The recurring revenue stream was a major attraction, as I could see the long-term benefits of developing this business so that the early years of business development lead to sustainable and profitable revenue for subsequent years. Combined with a strategy of customer retention, Mint Condition provided the highest long-term value for my investment.
            “4. Investment requirements – The investment requirements met my needs of a business for less than $300,000. Furthermore, this business provides good controls on cash flow and allows owners to grow expenses only as revenue grows, unlike some other businesses which require high operations costs from Day 1.”
            Mint Condition now has nine master franchisees – each owning the rights to a major metropolitan area – from Pennsylvania to Florida to California. The company has come a long way since the early 1980s when Saumby stumbled upon the office cleaning business somewhat by accident.
            “I had a successful career in sales for Honeywell, focusing on temperature control systems for commercial buildings, when I was asked to transfer my sales skills to a floundering janitorial business in Houston,” Saumby recalled. “I went in and grew the company from $200,000 to over $1 million in revenue in about four years. But then the recession of 1984 really devastated the Houston area economy.”

Starting Over In A New Place

            So Saumby decided to move back east where he and his wife Marcy were both from. After evaluating many locations, he chose Charlotte because of its strong growing office market, especially in small to midsize commercial office buildings, his primary niche. Beginning there in 1987 with zero income, he grew his office cleaning business to eighth largest in the Charlotte market within eight years.
            “I worked the numbers and was very persistent, getting in front of prospects on a daily basis,” he said. “I averaged 35 cold calls a day, and cleaned buildings at night. It was very tough at first.”
            But once he reached the 100-employee level, he found it difficult to grow further. “The more we grew, the harder it was to retain employees and customers, because quality control became more difficult,” Saumby said. “So we’d grow some and shrink some over and over. I decided there had to be a way to break through that barrier.”
            Saumby boiled his decision down to this: “Either stay in the marketplace and change our model, or stay with the employee-based concept and go into new market sectors such as large office buildings or other geographic areas.”
            At the time his two largest competitors were extremely successful national franchise programs. He decided to pattern his business after theirs, except he saw a flaw in their model – high turnover of franchisees.
            “Their model provided a short-term guarantee of business, but I decided to guarantee our franchisees steady business for as long as they were with us. I hoped this would lead to reduced turnover among both franchisees and customers,” he said. 

Creating His Own Franchise System

            It took a couple of years including many trips to meet with an experienced franchise attorney in Atlanta before Saumby had worked out the Uniform Franchise Offering Circular required by federal law, as well as a training program for new franchisees.
            “We converted our Charlotte business into this franchise model in 1995-96,” Saumby said. “Within a couple of years we had the bulk of our company transferred over to the franchise system. The hardest part was going from an operationally driven company to a market driven company. We lost most of our original supervisory employees as a result of this change. It was a difficult time for all of us.”
            He explained that people who were comfortable managing cleaning crews found it very difficult to switch to recruiting both new customers and cleaning franchisees.
            “Once I franchised and saw that I had a quality model, I had always wanted to expand to other cities, and decided to adopt a master franchise system,” Saumby said. “This is the model that McDonald’s and many other large national franchise companies use. After figuring it out, it’s working for us too.”
            Mint Condition master franchisees have two main responsibilities – attracting new customers who own or manage office buildings, and recruiting small-business franchisees (often families) to clean those buildings.
            During the past 12 months, while the U.S. as a whole has been in a deep recession, Mint Condition has experienced its strongest growth ever, adding about one new master franchisee a month in the first half of 2009. He credits part of his success to The Entrepreneur’s Source (TES), a national multi-franchise marketing program which has their own franchisees working nationwide.
            “TES seems to be good at attracting the type of candidates that fit our model,” Saumby said. “That is, business executives with significant management background who are sales oriented. The typical candidate does not have knowledge of our industry but does have at least $100, 000 in liquid assets, which is the cost of a typical smaller territory in our network.”
            Saumby said that a number of his master franchisees like the fact that the business is scalable. “Rather than one sale per transaction, as you have in a retail business, we are selling cleaning contracts that continue to generate income into the future. This allows building up the business into a strong income generator.”
            Meanwhile Saumby has increased his capacity by hiring former Fortune 500 executives to handle sales, training, operations and other key functions. He upgraded his website and marketing materials. Having learned from experience that the best way to acquire new customers is through telemarketing, he has experimented with several telemarketing services and is now growing his own telemarketing department internally.
            “The master franchisees really like this, because cold-calling prospects is very difficult for many of them,” Saumby said. “Of course we have to charge them for this service, but they are very relieved that they don’t have to do this themselves.”

Key Lessons Learned

            What are the key lessons Saumby has learned from growing his business from start-up to national franchise success? He identified three:
            “1. Make your model easily replicable.
            “2. Adapt to local conditions – no two markets are exactly alike.
            “3. If possible relieve master franchisees of cold calling with a centralized marketing or telemarketing program.”
            “4. Create a win-win model by guaranteeing the smaller franchisees with accounts.”
            Saumby explained that he’s observed a number of national franchise programs tend to take advantage of the lower sophistication of individual franchisees. “A majority of franchisees don’t even read the legal document they are signing,” he noted. “We’re very transparent and require our masters to be also. One key element I’m looking for in master franchise candidates is a high degree of integrity.
            “What speaks to that is we’ve never had litigation against a Mint Condition franchise and have much lower turnover of franchisees in our system compared to our competitors.”
            As far as the master franchisees themselves, Saumby added, “One thing that’s difficult to teach or train is the importance of handing off lower level responsibilities to others on the team as soon as possible. This is the path to faster growth and profitability. You need to always be focused on recruiting and growing the revenue side of the business.”