Maid service reaching for new markets

Companies see growing demand in New Economy

Franchises available

One agency targets Ohio, Pittsburgh, Sacramento areas

Cleaning agencies

July 05, 2000|By Rona Kobell | Rona Kobell,SUN STAFF

Maid to Perfection Corp., a Baltimore-based cleaning franchise company, wants to sweep the nation with 100 new franchises by the end of the year.

In November, the company began announcing ambitious plans to acquire independent maid companies and janitorial services. Newspapers in Detroit, central Ohio, Pittsburgh and Sacramento, Calif., published articles saying Maid to Perfection would open 10 businesses in six months. It also announced plans to expand into Arizona.

Now, Maid to Perfection is abandoning the Detroit area. Chief Executive Officer and President Michael Katzenberger said he's working on two deals in central Ohio, three in Arizona and one each in Pittsburgh and Sacramento, but none have been completed.

Katzenberger acknowledged that some of his promising leads for franchisees fizzled. "But we're not going to rush," he said. "We've invested heavily in advertising and marketing for growth."

He's not alone. The nation's largest maid companies - Maid Brigade Inc. in Atlanta; the Maids International in Omaha, Neb.; Molly Maid in Ann Arbor, Mich.; and Merry Maids in Memphis, Tenn. - all say they're expanding to meet growing demand. After all, this is the New Economy. Who has time to clean it? Especially when you're stock-option rich and can afford a maid.

"There's so much business out there, most of our owners have waiting lists for customers," said Molly Maid President Linda Burzynski.

Don Hay, Maid Brigade's president, also reports that business is booming, thanks in part to working women's changing priorities. "If a woman is a college graduate, she has no intention of cleaning a home like her mother did," he said.

Burzynski sympathizes with Maid to Perfection's growing pains. Last year, her company wanted to expand, but found few people looking to buy franchises. Add to that a tight labor market, and maids can afford to be choosy about signing on.

Those woes are typical when times are good and downsized workers can choose from a plethora of job opportunities before they might decide to become a franchisee. "In general, when the economy is down, it's a great time to find new owners," said Gery Whalen, marketing director for the Maids. "When it's up, it becomes a little more challenging."

The maid business has become much more businesslike since the late 1970s, when Maid to Perfection's four major competitors started. Maids now earn about $10 an hour, plus health benefits and worker's compensation. Extensive computer networks keep work schedules. Molly Maid even teaches English to its Spanish-speaking employees, and offers GED courses.

While back-office operations are lean - Maid to Perfection only has seven employees at its Woodlawn headquarters, while Maid Brigade has six in Atlanta - franchises can generate considerable income. In 1999, Maid to Perfection's Hunt Valley office boasted $2 million in sales, and Maid Brigade said its Alexandria, Va., office brought in $5 million.

Maid to Perfection entered the franchising business 10 years after its competitors, and differs from them in two areas: it makes acquisitions and it offers commercial office cleaning. Katzenberger said Maid to Perfection is attracted to commercial cleaning's high margins - about $400 a job compared with $82 for a home.

Katzenberger's competitors prefer to stick to residential jobs.

"There are a ton of very big, very professional commercial cleaning companies that have been out there for decades," said Hay, who started in the commercial cleaning business.

"Our philosophy is, `Do one thing, do it well,'" he said.

Molly Maids' Burzynski said janitorial work, with its night hours and heavy machinery, is incompatible with her nearly all-female maid staff's needs.

"We try to keep it family-friendly. We have a lot of single moms," she said.

Maid to Perfection's competitors prefer to identify potential owners - most without prior maid experience - and incorporate them into the fold. But Katzenberger is looking to buy independent cleaning companies to absorb their client lists - and get a running start.

Katzenberger's company is hoping the acquisition strategy brings Maid to Perfection 100 new territories by the end of the year. Already, the company has 205 franchise territories in 19 states. Katzenberger and his wife, Lori, started the company as Midy Tidy in 1983 and changed it to Maid to Perfection in 1990.

That year, the company sold its first franchise to Mary Beth Giese, a former Midy Tidy employee. Giese now owns 12, running them out of offices in Crofton and Catonsville.

Giese knows how hard it is to keep maids in a good economy, having done cleaning work herself.

"Think about it," she said. "It's kind of nasty, scrubbing people's toilets. It's hard, dirty work."

Under Katzenberger, franchisees such as Giese buy their first operation for about $35,000. The second one is half-price. Maid to Perfection's corporate office gets 7 percent of a franchisee's revenue until sales hit $500,000. After that, it collects 5 percent.

That's pretty typical franchise behavior, said Samuel Crawford, director of public policy for the American Franchisee Association, a Chicago-based group.

"If you wanted to buy a Domino's Pizza [franchise] tomorrow, you couldn't," Crawford said. "People who have them are likely to buy more. You want to sell to someone who knows the game."

No matter where the Katzenbergers expand, they're still stuck cleaning their own home.

Company policy prohibits them from hiring Maid to Perfection, and they won't hire competitors.

Said Katzenberger: "I'm probably one of the only guys in the country that doesn't have maid service."

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