Lawn Franchises - good or bad?

Discussion in 'Starting a Lawn Care Business' started by Zimbo, Aug 23, 2008.

  1. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670

    Park city UT? Ha I almost took the park and rec director position there not that long ago.

    Pay system on the employee owned company was based on the guys getting paid $8.00/hr.

    Of course they never actually got paid that. Their ownership was based on their truck, equipment, and route.

    Let's say you run a route for me. That route consists of 60 man hours of work so your weekly billing is $3000.

    As the crew leader you got $1500 of it.

    But here's the catch you have a route, with fuel, expendables etc figured into it. Go OVER the assinged expenditures it comes out of your $1500 (so basically dont go off route, floor the gas pedal for fun, do lawns on the side etc and you come out even. IF you actually came in under your alottment you got to keep half the difference.

    Wreck a truck? loose apeice of equipment? All came out of the $1500. (of course by lawn you got paid a minimum of your $8.00 per hour)

    Basically MOST of the guys went home with $1000 to $1600 per week (weeks always varied, flat tires, rain, PIA homewoners, etc.
    Where th guys made the most bank was always on the athletic fields, they wouldnt take a helper (helpers ran at $10 per hour andcame out of your $1500 if you needed one) they would put in 12-14 hour days (4 days per week and the mowers had headlights on them) and go home with $1600 for a single week of work.

    It worked well, everyone took care of everything, never lost equipment had very little damage.

    Its more complicated than Im explaining, Im just giving you the run down of how it worked.
  2. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 17,020

    I am just interested
  3. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    Sounds a lot like piece work to me. I'm sure you had the legalities worked out but I don't like the gov't involved anyway. If two people want to enter into a business agreement the gov't should stay out as far as I'm concerned. As long as the work is legal and tax's are being paid I don't see a problem. BTW I like your plan better than mine.
  4. Manicured

    Manicured LawnSite Member
    Posts: 18


    I have looked at this website for several years and never thought about becoming a member but I joined tonight because I thought your question and my experience was too important.

    After owning a lawncare business for 7 years I bought a franchise from USlawns. I sold the franchise six months later. I've since told people like yourself that getting into USlawns was the second best decision I have made and getting out of USlawns was the best decision I've made!

    I too was very excited about being associated with a national company. I loved the thought of buying equipment at discounted prices. Inaddition, I was looking foward to belonging to a family of fellow business owners that I could bounce ideas off of.

    Unfortunately, for me, the view from the inside was vastly different than from the outside. I did not own or want any of the equipment they wanted me to buy. They wanted me to drop all of my loyal residental customers. I quickly discovered that if I continued with them that I was going to be in a lot of debt. They were only concerned with my expansion without any reguard to money to support my family.

    I did find however, that the owners of the other franchises were very supportive and often worked and helped eachother. I still consider them my friends and often pray for their families.

    Please understand that the salesman on the phone will always sound as if he has all the answers. My suggestion to you my friend is to walk away. No, on second thought RUN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    P.S. 5% of your gross is alot bigger than 5% of your net! l
  5. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    Manicured I'm so glad you spoke up. :clapping: I have always wondered about them, I am a residential guy myself so would never even consider something like us lawns. So what are you up to these days? Did the franchise experience help your business education? You must have been doing pretty well on your own to afford a franchise (I think) Spill it man, we want to know :laugh::laugh: Welcome to lawn site.
  6. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670

    Az, yes it is based on a peice work concept. The legality of it is that they have to earn at least minimum wage (including OT) no matter what.
    They are also listed as officers of the company and, as such there are differnt rules that apply to them (i.e. you can't get into trouble for not paying yourself, right?)
    There were also some other stretches and things to consider, taxes were confusing at times and it took hiring out to get it done.

    I just like running things right now with the 2-5 guys we have now.
    Simpler, smaller, more manageable. Less gross almost (maybe next year) as much net.
  7. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    As officers they were board members I am guessing? With no shares, or did you have a process for them to earn shares? This is some of the best thinking outside the box info I have received. Thank you!
  8. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670

    As "Officers" I mean "members" as we were speaking of an LLC.

    If you had an LLP it would be "partners" I'm not aware of what the real legal difference is, Im sure it varies state to state.

    As Members they were associated with a certain percentage of "ownership"

    For example, they "owned" 50% of their route.
    With 4 "routes" consisting of 80% of the company (the other 20% was construction) a single route represented 20% of the company and therefor they were 10% owners.

    I was the "managing member" and as such held 60% interest in my company (well actually 40% with my then spouse having 10% and my father having 10%) but the point is the employee-owners couldnt gang up on me and run the show.

    They were paid their $8.00 per hour, plus their 'dividend' or draw on a bi weekly basis.
    They were also given the option to "bank" their draw to buy new equipment for their route.
    (some guys actually decided they wanted another weed whacker, or a faster mower and put their money...not all of it, but a good amount toward things like thus)
    Most of the guys enjoyed the fact that they could earn a grand or more a week (and on good weeks considerably more) and only work 4 days of the week. We had half the crews (2) run monday to thursday and the other half run Tuesday to friday. This way there was two days a week (monday and friday) where there were extra trucks and equipment "just in case" and they were availbale for service as well.
    This also allowed us to stay on a weekly schedule even if there was down time or rain. We had the extra days/hours to make it up and never fell behind.

    It was a pretty sweet operation.

    There are really no laws I know of in any state against paying a worker MORE than he is supposed to get paid, as long as it is all reported on taxes and within the same pay period. (for example if worker X earned a draw or peice work in july, he has to pay the taxes in july, even if say he only pulled the draw at the end of the quarter, as some companies do it.)
    But I'd check on AZ laws and get your labor/tax attorney to go over everything.
    When I was doing my thing, no one could find jack on what I was trying to do (Maybe I was the first guy to try it)
    But as you pointed out, it's really no different than peice work, which has been carried out successfully by the auto industry since, well before I was born.

    I didnt invent the idea, I stole it from Glenn Zior of Clip fame and modified it to make it work for us.

    We don't use this model right now in idaho, there isnt enough steady work for the guys to make it attractive for them.
    So right now we are paying hourly like 99% of the rest of the industry.

    I havent even required any help in the last week and a half (they are all on "on call basis") most of these guys right now bounce between two or three companies trying to get a months wages.
    Work has really ground to a halt around here.
    IT will pick up next year though, several companies have just packed it in and left town.
    I'm forcasting three times the blowouts this year than I did last year.
    Blow outs are huge for a month and half up here. I'll do 8 to 10k in blow outs and another 15k in firewood and hope that plus some snow removal will get me to next may.:rolleyes:
  9. Albery's Lawn & Tractor

    Albery's Lawn & Tractor LawnSite Bronze Member
    Posts: 1,674

    I thought about doing the US Lawns thing, but like Manicured said they wanted me to drop all of my residental customers. In my area that would have been the dumbest move to make. My area is a military town, we have alot of turnover here and are expecting around 20K more military here withing 1-3 years. We do not have large commercial complexes. We have roughly 400 businesses here but most have little to no landscape to maintain. The start up fee if I remember correctly was only around $29K, so it wasn't that bad of an initial investment, but you have to buy what they want. They want you to use exmark, great but the only exmark dealer near me is brand new, and doesn't carry any real commercial mowers in stock, not to mention he has no full time mechanic, and is constantly sending work over to our repair shop. So for me it was the little details like that that really turned me off. Plus I didn't like how they wanted a percentage of the gross, that 5% will really be around 10% or more of your net.
  10. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 17,020

    Dropping accounts to get one of their franchises...........I think the run fast from US lawns might be a good idea

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