Paraserve managing director Galvin Bartlett has denied allegations that his company is selling contracts to vulnerable franchisees.
“Our franchise business and franchise agreements are fully compliant with Australian and Victorian law and we operate within the Franchise Council of Australia Code of Conduct,” Bartlett told INCLEAN.
“We believe Paraserve has consistently been one of the larger school cleaning businesses in Victoria for at least the last five years with many satisfied clients and franchisees. To describe our franchising business as a scam is incorrect, scurrilous and libellous.”
Bartlett says the Paraserve franchising model is a legitimate, lawful and common business model operating within Australian law. He agrees school cleaners do a very important job, deserve respect, fair pay – “or a fair return in the case of franchisees” – and a job and income they can count on.
“Paraserve does not on-sell contracts. Franchisees are licensed to service Paraserve clients – they do not own the clients. This is significant because Paraserve takes responsibility for many functions, including franchisee training, customer service support, invoicing and providing regular franchisee payments and providing public liability insurance cover.
“The agreements Paraserve have signed with our franchisees are not “purported”, they are legal documents. We advise all prospective franchisees to carefully consider whether franchising is right for them. We have at least three meetings with prospective franchisees over a number of weeks to explain how the franchise business works and to give them an opportunity to ask questions, fully understand the proposition and discuss it with their families.
“We require all prospective franchisees for their own protection to have independent legal advice before signing the agreement. Once the contract has been signed and the franchisee has started there is a “cooling off” period in which the franchisee can exit the agreement without penalty if they decide it is not for them after all.”
Bartlett also pointed out that in the article INCLEAN published last week on United Voice’s report, it is stated that “it is likely some of the cleaners voluntarily moved from an employment relationship to the franchise model”.
“In fact, this is the ONLY way Paraserve is interested in cleaners becoming franchisees and we work very hard to ensure this,” said Bartlett.
“Paraserve gives people – who would usually not otherwise be able to – the opportunity to own their own business. With Paraserve training and support our franchisees learn how to run a business, including managing staff and meeting client needs.”
“We are not interested in coercing employed cleaners to become franchisees”
In response to the claims made by a cleaner who wished to remain anonymous, Bartlett says if these claims are true, then this would most likely be a case of someone in Paraserve not following the company’s own processes, which “is concerning and which we will investigate further”.
“We are not interested in coercing employed cleaners to become franchisees, as unwilling people are highly unlikely to be able to run good franchise businesses. Equally we need to retain cleaners who wish to continue as employees of our franchisees, so issuing ultimatums like this is very poor business practice.
“Inevitably with 25 franchisees there have been a few issues but nothing out of the ordinary and we believe these are now largely resolved. By and large our franchisees love owning their own businesses and the independence this provides.”
“We are totally open that Paraserve is a franchise business”
Bartlett says the facts and figures published in INCLEAN’s article last week are essentially correct and that the revenues enable Paraserve to run the business including providing franchisor support such as customer services, cleaning services and training, business administration including invoicing, business training and, in some cases, financing.
“This is also common business practice and nothing out of the ordinary,” said Bartlett. “In just the same way, traditional cleaning companies (non-franchising) indirectly require a percentage of revenues from their employed cleaning staff to pay for managers and supervisors and all their back office costs.”
Bartlett says the requirement of franchisees wearing the Paraserve uniform is common practice as with the majority of franchise systems where the brand is important, such as Jim’s Mowing, McDonalds and the Coffee Club.
“We are totally open that Paraserve is a franchise business – we discuss it with clients and it’s all over our website. To say this is hidden from school principals is nonsense. Our franchisees are licensed to work for Paraserve, they do not own the contracts. If school principals are unaware of this it is because their main concern, rightly, is a cleaning job well done – and this is what they get.”
Bartlett says Paraserve’s sole interest is in having viable franchise businesses where franchisees are well rewarded, do not feel pressured and where clients are paying a fair amount for the services provided.
“Undervaluing of cleaning services is a chronic issue and Paraserve will always sit down with clients and franchisees (or Government representatives for that matter) to openly discuss the respective costs for the franchisee and the franchisor.”
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