April 25, 2012
The Fish Window Cleaning Franchise Disclosure Document (FDD) is the required informational document prospective franchisees must receive at least 14 days before they are asked to sign any contract or pay any money to Fish Window Cleaning.
Are you familiar with the Fish Window Cleaning franchise opportunity? Please share your opinion below.
Mandated by the Federal Trade Commission (FTC), the FDD discloses extensive information about the franchisor and the franchise organization which is intended to give potential franchisees information to help them make educated decisions about their investments. The information is divided into a cover page, table of contents and 23 categories called “Items.”
As a follow-up to our earlier post FISH WINDOW CLEANING Franchise Complaints, we have included some highlights from the 2012 Fish Window Cleaning Franchise Disclosure Document in this post, and included a link to the full FDD below.
Is the Fish Window Cleaning Franchise Growing? (Item 20)
In assessing the viability of any franchise system, one should analyze Item 20 of the FDD to see how many franchises have opened in the past 3-4 years, how many have been terminated or discontinued operations. This can give you a quick read on the health of the franchise system, and whether there is franchise “churning” (i.e. a pattern of franchisees failing and being replaced with new franchisees).
Item 20 of the Fish Window Cleaning Franchise Disclosure Document provides the following data:
|Year||Outlets at start of the year -period||Outlets added||Term-inations||Non-renewals||Ceased Operation – other reasons||Outlets at end of the year|
Total Franchises for the period: 288
Franchises exited the system: 64
% franchises exited the system: 22%
In the past four years, Fish Window Cleaning has grown from 178 franchises to 224 franchises, and increase of 46 franchises. However, during the same period, 64 franchises (22%) seem to have exited the system either through terminations, non-renewals or having ceased operation for other reasons.
Fish Window Cleaning Franchise Lawsuits (Item 3)
Despite the complaints and number of franchisees exiting the system, Item 3 of the Fish Window Cleaning Franchise Disclosure Document states:
No litigation is required to be disclosed in this Item.
Fish Window Cleaning Financial Performance Representations (Item 19)
We were glad to see that Fish Window Cleaning is among the minority of franchisors who provide an optional Financial Performance Representation in Item 19 of their FDD. However, it is unfortunate that they only include the financial performance of the Top Performing outlet, the Top 10% and the Top 50% of the franchisees who provided financial information.
Prospective franchisees should ask Fish Window Cleaning: Why not provide the financial performance of all the outlets that you collected? Shouldn’t franchisees be able to make an informed decision based on realistic data, not just the “best case scenario”?
Franchise Marketing Red Flag #1
In researching a franchise, prospective franchisees should look for inconsistencies between what a franchisor alleges in their marketing materials and what they commit to in the FDD and Franchise Agreement. The Fish Window Cleaning franchise website contains this statement from Fish Window Cleaning CEO Mike Merrick:
Everything we do is focused on enabling and effecting the positive growth of the franchise owners. We don’t sell products to our franchise owners to make money. When we negotiate pricing with our vendors, the franchise owners see the savings. Our income is from royalties. That forces us into a position of being interested and motivated to do everything possible to help the franchise owner grow his business.
However, the Fish Window Cleaning FDD contradicts CEO Merrick’s statement that the franchisor does not make money selling products to franchisees:
During our last fiscal year ending December 31,2011, we received consideration in the amount of $15,286.26 from vendors.
…we and FWCD derived revenues of $233, 206 from the sale of products and supplies, or 3.85% of our total revenues of $6,056,211. based on our Consolidated Statement of Income for the year ended December 31. 2011 and attached as part of Exhibit E. We and FWCD derive revenue from the sale of products and supplies by selling some of these items at a price higher than our purchase price. Other items we and FWCD sell to you at our own cost.
We estimate that your purchase of products, supplies, and marketing materials from us or that meet our specifications and standards will represent approximately 80% to 90% or more of the cost to establish the franchise business and 8% to 14% or more of the cost to operate the franchise business on an ongoing basis.
Franchise Marketing Red Flag #2
The Fish Window Cleaning franchise advertisement on the FranchiseGator.com website contains deceptive and blatantly untrue statements that the U.S. Department of Commerce statistics indicate that franchise ownership is nearly risk-free compared to independent business ownership. On Franchise Gator, Fish Window Cleaning claims:
The United States Department of Commerce offers the following statistics regarding business venture successes and failures:
Franchise Operations –
96% success rate after 1 year
92% success rate after 5 years
62% still in operation after 1 year
25% still in operation after 5 years
The “statistics” have been widely proven to be bogus and untrue. In fact, the International Franchise Association (IFA) has issued memos specifically directing its members to discontinue dissemination of these specific claims. The use of these statistics is troubling, and prospective franchisees should question Fish Window Cleaning franchise sales representatives about their accuracy and use.
Investigate Before Investing!
In closing, the franchise due diligence process is not simple, but critically important to making the right investment decision. Our comments are just quick observations after a cursory review of Fish Window Cleaning’s FDD and marketing. Always consult (and pay) a franchise attorney or franchise industry professional (not a broker who calls him/herself a “free consultant”) for a due diligence review and consultation. Feel free to contact us for a recommendation.
ARE YOU A FISH WINDOW CLEANING FRANCHISE OWNER OR FRANCHISEE?
ARE YOU FAMILIAR WITH THE FISH WINDOW CLEANING FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
April 25, 2012
Fish Window Cleaning franchise company contends that “The demand for professional window cleaning companies has never been higher and FISH Window Cleaning fills that niche.”
Are you familiar with the Fish Window Cleaning franchise opportunity? Please share a comment below.
“FISH now has over 200 franchise owners and is actively seeking quality franchisees coast to coast.”
According to Fish Window Cleaning’s franchise marketing:
“FISH owners experience a business that gives them a great lifestyle immediately (no work on nights, weekends, or holidays) and the ability to go out every day and grow their business in a market with fragmented competition.
“Most importantly, the owner is not the window cleaner, but the business professional who is dedicated to following the complete franchise system.”
Fish Window Cleaning claims:
FISH is a smart business decision because:
- Residual Income
- Low Overhead
- Fast Break-even
- Niche Market
- Strong Corporate Support
- Low Investment
- Huge Growth Potential
- Owner is not the window cleaner
- Monday – Friday daytime hours
- Minimal number of employees
- High customer retention
- Over 30 years of experience
FISH WINDOW CLEANING Franchise Complaints
On FranchisePundit.com, March, 2012, That Guy wrote:
I am a former Fish employee, and a current Fish competitor.
Fish operates as a franchise with virtually no “support” from the home office.
They charge high fees to their franchisees, and push the philosophy of “undercutting” their competition.
Problem is, even with all the cheap, inexperienced labor in the world, if you are not charging enough for your services, you will not break even… especially with all the fees adding up.
As an employee… Fish pays their employees as contractors, which enables them to pay far less than minimum wage. I was making roughly $6 an hour with them in 2004, using my own car, and paying for my own gas.
Here’s the kicker… The franchises rarely last more than a year or 2. When they finally close down, the Fish corporate complex already has that particular franchise “established”. The address is kept, the phone number is kept, and the next sucker who comes along is told that the business is established in the area, while never asking where the current business comes from and what happened to the last guy.
Fish Window Cleaning is a classic pyramid / MLM scheme.
But, its not my money to spend, so do what you will.
On FranchisePundit.com, FuwaFuwaUsagi wrote
Fish is one of the few “zors” that makes an earnings claim, and frankly it is among the most entertaining I have ever read (in a good way). Did you examine it?
How do you feel about a franchisor that does not actually operate the business they franchise?
Do you think that 13-16k is a lot to pay for invoices, estimate sheets, brochures and a computer system. Come to think of it what type of computer system is needed for a window cleaning service anyways?
The royalty is 6-8%…The success of this business is tied to the idea of hiring temp sales reps to generate accounts using the FISH system (which basically amounts to cold calling, leaving brochures and business cards); given that does the 6-8% seem reasonable?
Note the brand building fee is 1%…then look at geographic dispersement; I suspect you are not going to get much brand building done. Then again this is corp to corp in a commodity market so branding may be a moot point so then it begs the question why the 1% fee. Then again they reserve the right to jack it to 2%.
What do you think of the punitive minimum performance standard?
How do you feel about the weekly “technology fee”…apparently this loosely worded fee can be used for everything for brand building to supporting you for the snazzy window cleaning software that the technology intensive window washing business demands.
How do you feel about letting the “zor” have carte blanche electronic access to your bank account?
How do you feel about having to have an office outside your home for this type of business? Last I knew ServPro, Service Master and others did not require this.
How do you feel about the compulsory nature of whom you buy your supplies from?
Does it bother you that 80-90% of your start up materials are purchased from the “zor”?
What is the USP for this concept?
At any rate, these are just a few questions for you to mull over and get you started.
A commenter on Ripoff Report, Friday, November 11, 2011, wrote:
I am not happy at all at how many fish franchise have failed. I am not happy most weeks and I am usually fed up by midweek.
You need strong $$ accounts (not $12-$20 jobs), the majority of the your accounts need to be above $40 and only great employees on your staff in order to make this venture work. That is a red flag.
You should be able to make this business work with good employees at the middle of the bell curve. Not every window cleaner can be a rock star. You maybe able find one rock star per year if you are lucky.
if you buy a franchise from fish make sure you don’t have a lot of industrial or all older homes with triple track windows in your territory. You need homes across all income ranges if you even want a chance at making it in this franchise. You need someone out selling everyday to get new accounts. Most of all, you need strong business communities in your territory.
… prayer is the only thing keeping me going has a fish franchise while I push myself to the limit everyday. I go home and ask God sometimes, who did I get myself involved with. The profit margin are way under what I was told it would be.
On ripoffreport, Thursday, January 19, 2012, WindowGuy wrote:
As a former operations manager at a Fish location I read the posts about employee compensation and do agree with the people saying it is by far inadequate…
Yes they do $10-$20 dollar jobs which to get those jobs a lot hire a salesman who gets paid nothing unless he sells and even then it isnt worth anything so they quit. So that causes the well underpaid Operations manager to have to do all the sales or spend his time interviewing more sales man….
I would not recommend franchising or working for this company to my worst enemy!!
ARE YOU A FISH WINDOW CLEANING FRANCHISE OWNER OR FRANCHISEE? ARE YOU FAMILIAR WITH THE FISH WINDOW CLEANING FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.