Vanguard Cleaning Systems
Date of Incorporation: 1984
Franchising Since: 1984
Headquarters: San Mateo, California
Country: U.S.
Description: Vanguard franchises are independently owned and operated businesses that specialize in commercial janitorial and building maintenance services.
Franchise Offer: Vanguard provides franchisees with janitorial accounts to service at the dollar volume levels specified and within the applicable fulfillment period. Vanguard franchisees offer janitorial and building maintenance services to commercial accounts on site. The franchisee may operate the franchise from his or her home. Most franchisees do not maintain a separate location.
Financial Assistance: Vanguard offers financing of the balance of the initial franchise fee due after payment of a down payment upon signing the Franchise Agreement. If the franchisee is an experienced franchisee and need additional equipment to provide certain services to accounts, Vanguard may but is not obligated to offer the option to "lease to own" that equipment from Vanguard, The total cost of -acquiring the equipment under the lease would include Vanguard's acquisition cost of the equipment plus a markup and 10% annual interest. 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 when they purchase the Franchise that includes practical, on-site activities explaining the methods and procedures of the commercial cleaning business. It lasts up to 15 days and typically is offered to the franchisee within 30 days after signing the Franchise Agreement. Classroom training is conducted at Vanguard’s regional offices in Northern and Southern California and field training is held at buildings designated by Vanguard.
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.
Term of Agreement and Renewal: The term of the franchise agreement is for 10 years with an option to renew for an additional 10 years if certain requirements are met.
Obligations and Restrictions: The franchisee must personally perform or supervise the performance of services by their employees. 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 the franchisor has granted approval in the past.
Total Number of Units: Over 1,800 franchises
Investment Tables:
Initial Franchise Fee:
The franchisee must pay an initial franchise fee calculated according to the volume of janitorial accounts Vanguard will provide for the franchisee to service under the Franchise Agreement. Vanguard offers financing of part of this fee. The table below shows the schedule of initial franchise fees and financing terms. The number under the "Type" column indicates the annual dollar volume (in thousands, assuming full performance of contracts) of the janitorial accounts that Vanguard provides with that package. For example, P-24 means Package-$24,000. The given payments are based on financing for three and a half years at 10 percent (10%) interest per year.
| Type | Fee | Down Payment | Financed | Monthly Payments |
|---|---|---|---|---|
| P- 7.2 | $8,500 | $1,500 | $7,000 | 42 payments @ $198.22 |
| P-13.2 | $10,300 | $3,300 | $7,000 | 42 payments @ $198.22 |
| P-18 | $11,500 | $4,500 | $7,000 | 42 payments @ $198.22 |
| P-24 | $13,000 | $6,000 | $7,000 | 42 payments @ $198.22 |
| P-36 | $16,000 | $9,000 | $7,000 | 42 payments @ $198.22 |
| P–60 | $22,000 | $15,000 | $7,000 | 42 payments @ $198.22 |
| P–84 | $28,000 | $21,000 | $7,000 | 42 payments @ $198.22 |
| P-120 | $37,000 | $30,000 | $7,000 | 42 payments @ $198.22 |
Initial Investment:
| Name of fee | Low | High |
|---|---|---|
| Initial franchise fee (cash) | $7,650 | $33,300 |
| Initial Franchise fee (financed) | $2,094.66 | $30,594.66 |
| Equipment | $0 | $50 |
| Supplies | $0 | $0 |
| Licenses and Permits | $25 | $150 |
| Insurance and Bonds | $200 | $600 |
| Additional Funds – 3 months | $200 | $300 |
| Total | $2,519.66 | $34,400 |
Ongoing Fees:
| Name of fee | Amount |
|---|---|
| Royalty | 5% of the gross Monthly billings. |
| Administrative Fee | 10% of the gross monthly volume. |
| Additional Volume Fee | 4 times the first full month's billing for each new account or increase in existing account above volume covered by the original package. |
| Equipment Lease | Depends on what items are leased and for how long. |
| Special Services | Between 0% and 40% of contract price depending on the franchisee’s role in getting and handling the business. |
| Quality Control | $50 per hour plus expenses and materials for sending Quality Control representative to account. |
| Indemnity | The franchisee must hold Vanguard harmless from claims against Vanguard resulting from their acts or omissions. |
| Transfer | $1,000 |
| Insurance and Bond | The franchisor estimates that then current premiums set by insurance carrier plus Vanguard Vanguard's administrative charge will not exceed 5%-7% of the gross volume |
| Cost of Collection | Cost of legal proceedings to collect payments from the franchisee. |
Date of FDD: 2010
The above information has been compiled from the FDD of Vanguard Cleaning Systems along with online sources.
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