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Vanguard Cleaning Systems Franchise Cost & Fees

Date of Incorporation: 1984
Franchising Since: 1984
Headquarters: San Mateo, California

Business Description: Vanguard franchises are independently owned and operated businesses that specialize in commercial janitorial and building maintenance services.

Franchise Offer: Franchisees operate independent businesses (VCS Businesses) providing commercial janitorial services under the Vanguard Cleaning Systems trade name. The master franchisor offers the franchisee commercial janitorial accounts Assignments according to the Business Plan the franchisee selects when he/she signs the Franchise Agreement.

Financial Assistance: The Region where the franchisee is located may offer financing of the balance of the initial franchise fee due after payment of a down payment on signing the Franchise Agreement. If the franchisee purchases a Minimum Opening Inventory package or other equipment from the master franchisee, it may, but is not obligated to, offer the franchisee the option to finance that purchase under the form of Equipment Purchase Agreement and the related promissory note. Except for financing described above, Vanguard does not offer direct or indirect financing. Vanguard does not place financing with anyone, and does not receive any payment for the placement of financing.

Training and Assistance: Vanguard provides an initial training program to the franchisee that includes instruction on the System standards and procedures and is designed to ensure maintenance of the quality standards and goodwill associated with the System and the Marks. It also offers guidance on new business development and practical, on-site activities relevant to the commercial cleaning business. It lasts up to 15 days (not consecutive) and typically is offered within 30 days after signing the Franchise Agreement. Classroom training is conducted at regional offices and the field portion of the Vanguard Business System Program is performed at various commercial locations selected for that purpose. Additional training is optional as of the date of this Disclosure Document.

Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees, from outlets the franchisor own, or from other channels of distribution or competitive brands that the franchisor controls. The franchise is not granted for a specific location. The franchisee will be assigned to an Area designated in the Franchise Agreement. The Area is usually a designated Standard Metropolitan Statistical Area as derived from US. Census Bureau statistics, but could be defined as a city or cities or a county or counties.

Term of Agreement and Renewal: The term of the franchise agreement is for 10 years with an option to renew for one additional term of 10 years if certain requirements are met.

Obligations and Restrictions: The franchisee (or the Designated Owner) must manage and operate the VCS Business and supervise the performance of services by employees. The franchisee (or the Designated Owner) must always meet the then current training and other standards. The operation of the franchise is restricted to the sale of services approved by Vanguard, which currently include certain commercial janitorial and building maintenance services as specified by Vanguard. The franchisee must get approval each time they want to perform any services not on the list of approved services, regardless of whether approval has been granted in the past.

Estimated Number of Units: 3,170

Investment Tables:
Initial Investment
Name of Fee Low High
Initial franchise fee (cash) $7,200 $30,780
Initial Franchise fee (financed) $3,048.04 $29,248.04
Equipment and Supplies $800 $1,300
Licenses and Permits; Business Entity Formation and Name Registration $130 $1,500
Insurance $55 $600
Additional Funds – 3 months $200 $300
Estimated Total 4,233.04 $34,480.04
Other Fees
Type of Fee Amount
Royalty 10% of the monthly Gross Revenues.
Business Support Fee 5% of monthly Gross Revenues.
Marketing Fee (for additional Business Assignment) 4 times the first full month’s gross billing for each Additional Business Assignment above the initial Business Plan. Marketing Fee subject to change.
Equipment Purchase Depends on what items are purchased. A 15% administrative fee may be added to the cost of equipment purchases.
Special Services Between 10% and 25% of the price for the Special Services, depending on the franchisee’s role in getting and handling the business.
Substitute Services Reimbursement Expenses the master franchisee incurs in arranging for substitute third party Account servicing to preserve Account good will.
Indemnity The franchisee must hold Vanguard harmless from claims against Vanguard resulting from their acts or omissions.
Transfer $1,000
Insurance The franchisee pays the premium costs of coverage, plus the master franchisee’s administrative fee if the franchisee obtain general liability, crime, and umbrella liability insurance coverage through the master franchisee, which together is estimated will not exceed 5% of gross revenues.
Cost of Collection Cost of legal proceedings to collect payments from the franchisee or to enforce other terms of the Franchise Agreement.
Interest 1.5% per month or the highest rate allowable under applicable law, whichever is more.

The above information has been taken from the FDD of Vanguard Cleaning Systems (SE Wisconsin). Year of FDD: 2016

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