Is this Oven Clean Franchisee Trying to Go Out of Business on Groupon?

By Graham Rogers | Uncategorized

Aug 02
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In the Bristol area we have had two OvenClean franchisees start up in the last year. From what I can see one is based to the North of Bristol and one is to the East and so covers a bit of Bath too. The one in the East is a very new franchisee and I guess he started in March 2012 he lives a few doors down from where one of our guys’ mum lives. And our van is there every night as it is where our guy ‘heats his van up’ or I should say ‘heats his dip tank up which is in his van’. As our tank is electric he uses a cable and his mum has a drive  (he lives in a flat where it is difficult to plug in his cable to dip tank in). So we seem to be seeing a lot of the Oven Clean van and he followed our Oven Gleam van out of the estate the other day.  Two oven cleaning business vans in one street. Really I don’t mind as I know they have small areas and if they do some marketing then it just adds to peoples awareness that oven cleaning as a service exists.

Yesterday we saw the OvenClean Groupon deal! At first thoughts we thought “well that is it he has put himself out of business!” As if you remember last November the independent oven cleaning company in Bristol put a deal on Living Social, sold hundreds in a day and put himself out of business as it pretty obvious that he wasn’t going to be able to work for 3 months with no income (Living Social pay you on conclusion of the deal – so you get your 40% or whatever you have agreed with Living Social soon after the deal finishes) as he would have spent this  payment really quickly  it would have been a case of working flat out everyday, doing four jobs a day, for no money.
We have noticed  in our household that all the deals of Groupon and Living Social aren’t getting many sales – it looks like people have had enough of both Groupon and Living Social deals -I think it has been also a sign of the times, that a few months back, when the sales were still high, people starting a business with no knowledge of getting leads or setting up a web presence etc were doing a deal just to get the work, got overwhelmed, and then went out of business and then couldn’t fulfil the deal. Because of this Groupon and Living Social Clients got frustrated as they didn’t get the deal and because of this they have lost faith in the quality of the deals. Though saying that we, as a family,  seem to be still buying the farm visits, zoo visits to take my son to and our friends who run a photographers in Bristol have done okay with their deals as they have been able to upsell quite a lot.

 

So because of that things have panned out differently with the OvenClean Groupon deal though. He hasn’t sold that many; I think it is largely to do with the fact that there are only three postcodes on the deal with the best one being the centre of Bath the BA1 postcode, and as I said the number of sales on Groupon has fallen for all the businesses on there.   Though the deal is really good timing for getting student cleans in Bath central though who will really love this deal, so I’d guess a lot of them are for that. Although we are in Bath too doing jobs at the full price for landlords. Why only three postcode areas? Well I guess that is the size of his Franchisee Area. Though I’m not sure why this would stop him targeting a bigger area unless there is an Oven Clean franchisee in Bath. Anyway he sold 53 cleans in the first three days and has extended the deal. I looked this morning and the figure is now 71 with 15 hours to go. So five days on Groupon and I guess he’ll get to about 90 cleans. So 90 cleans will take him approximately 30 days of cleaning and he will get paid half of the deal price minus VAT so about £7 a clean – £21 a day. And because it is Groupon he doesn’t get paid until he puts in the slip so in dribs and drabs. I guess he is thinking that he’ll get repeat business and he’ll be able to upsell on cleaning pans etc and referrals. So it’ll be interesting to see what happens.

 

We have been a bit quiet recently but I know that this month things will start heating up a bit as landlords have to get the student accommodation ready for the returning students and we will be doing the ovens at full price with our average job price of £80. For me when you charge cheap you really get the dirty ones! I noticed that OvenClean has put an extra charge on cleans that take over 2.5 hours for a standard single oven. I can’t remember the last time it took me that long to clean a single oven, – I did do a standard double the day before Christmas last year that was a killer but other than it was years ago. I’m guessing with OvenClean’s slow system that their average clean time might be this high and therefore they can get some extra cash on each clean.

 

Our experience with Living Social is that we sold 400 in our deal over two days (300 in Bristol, 100 in Cardiff) and only two people have become regular customers. In fact I booked in a range cooker and extractor at £130 (discounted on our regular price of £168) a few weeks ago as I was training Nick our East Devon oven cleaning franchisee.

 

I know OvenClean franchisees have business mentors when they start but really this sort of deal it isn’t something I’d recommend to one of our franchisees as the risk is to high of it going wrong. There is a risk that you’ll get overwhelmed with the deal and then you are stuffed. Lead generation in lots of other ways is the way to go and when you work at it it will start working and you’ll get the rewards down the line. Currently one of our lead generation ideas is working very well for our franchisees. I might let you know what it is… 🙂
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