ServiceMaster Franchisees

To all ServiceMaster Stakeholders:

This is the second of a series of letters to the ServiceMaster Community giving a review of 2015 as well as my vision for the future, including heartfelt appeal for all ServiceMaster owners to support the SMFOA and for corporate leadership to embrace a collaborative relationship that will empower our shared success. This month we look back at the accomplishments of the SMFOA during our brief two-year history!

SERVING SINCE 2014

In early 2014, with the vision of several influential ServiceMaster Franchisees, and with strong leadership from Jerry Winkley, the SMFOA was launched with an ambitious mission:

“. . . to provide a positive proactive voice of the members to work with the franchisor to promote the financial growth and stability of all our franchises. This association will adhere to the ServiceMaster Objectives of Honoring God In All We Do, Helping People Develop, Excelling with Customers, and Growing Profitably. We will work with our franchisor to grow the brand while maintaining the equity in the franchises and providing for the opportunity for financial growth within the franchise organization. We will work with our franchisor and our National Franchise Council to develop stronger, financially rewarding relationships with our customers, insurance partners and vendors that provide the products and equipment necessary to perform our services.”

Scores of courageous owners rallied quickly to build a critical mass of membership, and we achieved more than 200 owners as members from all service lines, and more than 50 % of Total Customer Level Revenue, within a few short months of the SMFOA launch. From inception, our leadership has sought a collaborative win-win relationship with ServiceMaster.

AAFD Chairman, Bob Purvin, has advised that for a large organization, the SMFOA has been one of the most organized and faster AAFD chapter to take hold. Within a short six-months, brand leaders took elected office, recruited owners at an unprecedented scale, achieving one of the most successful and wide-scale chapter formations the AAFD has ever experienced.

SOLID ACCOMPLISHMENTS WITH SAVINGS FOR ALL OWNERS

Perhaps our greatest accomplishment has been the establishment of the SMFOA Legal Trust Fund. We are well on our way to raise a million dollars to support our ability to advocate for franchisee rights, as well as the ability to secure legal representation needed to protect our interests.

Following an extensive interview process, our Legal Fund Trustees engaged one of the nation’s leading franchise law specialists, Michael Garner, of Garner & Ginsburg, P.A. Mr. Garner has reviewed our current agreements, and has worked with the NAC to negotiate significant improvements in the ServiceMaster franchise agreement.

Make no mistake, there was (and is) much work to do. ServiceMaster’s actions that spawned the formation of the SMFOA affected all the owners’ equity. In 2014 a NPS survey was created by the SMFOA asking the question: How likely is it that you would recommend purchasing a ServiceMaster Franchise, based on you last two years of ownership to a friend or colleague? (Survey Monkey’s global NPS score for service organizations is a 30 NPS)

• July 2014 Results
• 460 owners responded.
• -73 NPS score for ServiceMaster Corporate (Negative Seventy Three!)
• July 2015 Results
• 385 owners Responded
• -71 NPS score for ServiceMaster Corporate (Negative Seventy One!).

A poor NPS score for this question affects all ServiceMaster Owners.  Equity in our businesses has much to do with the selling price.  If owners won’t recommend purchasing a ServiceMaster franchise than our business values are diminished.

The SMFOA Legal Trust has already saved the franchise owners millions of dollars in contract negotiations.  Here are a few improvements to note:
[I AM NOT SURE I UNDERSTAND THESE STATS, SO NEED SOME HELP REWRITING THIS PART]

• 1. Renewal fees removed:
• First Contract – $2000 every 5 years
• Additional Contracts – $1500 every 5 years
• 2. Savings
• 1 license = $2000 /5 years (Saved $400/year)
• 2 licenses = $3500/5 years (Saved $ 700/year)
• 5 licenses = $ 8000/5 years (Saved $1600/year)
• 3. How did these savings occur for everyone in our Brand?’
• Entrepreneur.com reported ServiceMaster represented 3,100 US franchise units in 2014; if each owner averaged two licenses each, this savings equates to $700 per owner per year.
• $10,850,000 savings
• $2.17 Million per year to the owners
• 4. Owners that need legal advice do not have to pay an attorney to read the ServiceMaster Contract and to get familiar with SM operations  – this huge savings is a minimum of 20 billable attorney hours.

WHY JOIN THE SMFOA?

All owners are needed to help the SMFOA work with our National Franchise Council to get the real voice of the customer to the ServiceMaster home office. Help to be part of the powerful influence to change the dismal NPS score.

SMFOA HAS BENEFITTED EVERYONE – AT THE EXPENSE OF THOSE WHO PAID THEIR DUES AND SUPPORTED THE LEGAL TRUST FUND. Joining and Supporting the SMFOA is a responsibility that shouldn’t be left to some of the owners while being a recipient of the hard work, financing and dedication of the owners standing together to protect everyone’s equity.

The combined efforts of the NFC (most who are SMFOA members) and the SMFOA have resulted in a significant change in corporate thinking and direction. Only the continuation of a strong NFC leadership and the strong support of the SMFOA with growing membership investing in the legal trust will we be able to continue to impact change and influence the direction of ServiceMaster Clean and Restore. Remember, days of Mike and Doug are gone. Leadership changes and direction can happen at the corporate level with just another sale of the ServiceMaster family of Brands.

Please step up, and join today.

Your President,
Bill Barbee