Anago franchise: how the unit and master model works, costs and the independent option

What is Anago Cleaning Systems and who owns it?

Anago Cleaning Systems is a commercial cleaning franchisor founded in 1989 by David R. Povlitz, with Adam D. Povlitz now CEO and president (Anago about us); its master FAQ calls it a family-owned and operated business (Anago master FAQ). Its corporate entities are Anago Cleaning Systems, Inc. and Anago Franchising, Inc., and neither of them cleans buildings. The site’s own disclaimer says all cleaning is done by unit franchisees or other licensed independent contractors, each licensed by an Anago subfranchisor, and that unit franchises are offered only by those licensed subfranchisors (Anago unit franchises).

Anago describes itself as a three-tiered franchise structure: the corporate office, regional master franchisees (which Anago also calls subfranchisors), and unit franchisees who do the work. Povlitz built it that way on purpose, according to the company history, to let executives build regional businesses while everyday people become small cleaning business owners (Anago). Anago is a member of the Canadian Franchise Association and sells both tiers in Canada.

That structure is the single most important thing to understand before you look at an Anago cleaning franchise. If you buy a unit, your contract, your accounts, your billing and your support all come from a regional master, which is itself a franchisee. Our overview of cleaning franchises explains the general rules; this page covers what is specific to Anago.

How does the Anago franchise model work at each level?

Masters buy an exclusive territory, sell unit franchises inside it, win cleaning contracts and assign those contracts to their unit franchisees. Unit franchisees clean the accounts and pay the master a royalty and fees. Anago’s own master FAQ states it plainly: the master earns from selling unit franchises and from royalties on every contract the units service, and there is no limit to the number of units a master can sell in a territory (Anago master franchise FAQ).

The unit franchise

• Guaranteed initial business. Anago says you choose an investment level, complete orientation, and receive guaranteed initial client contracts, with no cold calling required (Anago unit franchises).
• Back office by the regional office. Billing, collections, invoicing and customer service are handled by your master, which also offers financing for the franchise fee and for buying additional accounts.
• Insurance and bonding packages sold through the regional office, with availability varying by market.
• Growth by buying accounts. You add clients “at your pace” with financing available for the acquisition of additional accounts.

The master franchise

Anago describes the master owner as a white-collar executive who does not clean or manage crews. The master needs about 1,000 square feet of office space and five roles (administration, customer service, unit franchise sales, telemarketing and client sales), some of which the owner can fill at first (Anago master investment requirements). Anago lists seven revenue streams for masters: unit franchise sales and notes, recurring royalties and administrative fees, revenue on one-time jobs and commissions, recurring insurance fees, a guaranteed payment option, advertising fees, and a margin on supplies, equipment, apparel and promotional purchases made by unit franchisees (Anago master FAQ).

Read that list from the unit side and it becomes your cost list. Every one of those streams is paid by the people doing the cleaning: the royalty, the admin fee, the insurance, the financing note, the advertising fee and the markup on supplies. The master page puts the royalty at 10% plus administrative fees collected from unit franchisees (Anago master franchising). Anago headquarters in turn takes a 5% royalty on collected janitorial revenue, a flat $400 per unit sold and an administrative support fee, all collected from the units through the master (Anago master FAQ).

How much does an Anago franchise cost?

For a master franchise, Anago posts a $98,000 franchise fee in most US and Canadian territories and a total start-up cost of $219,000 to $339,000 including the fee (Anago master investment requirements). For a unit franchise, Anago does not post a price: it says the investment varies by package and territory and that your regional office will walk you through the levels (Anago unit franchises).

What the unit side will cost you is in the regional master’s FDD, which is a different document from the one Anago Franchising issues to masters. The ranking Anago cites suggests unit packages start below $50,000, but the low end of a package is usually a small set of accounts. California’s DFPI describes the usual arithmetic: the fee is often about half of the gross income the accounts are supposed to generate in a year, so $10,000 would buy accounts billing about $20,000 a year (California DFPI: Janitorial Service Franchises).

A hypothetical unit example

Say your regional office sells you a package of accounts billing $2,500 a month ($30,000 a year) and the royalty, admin fee, insurance and advertising fee together take 20% of collections, with a financing note on top. These are illustrative figures, not Anago’s. You would see about $24,000 a year before supplies, your own insurance top-ups and any helper. That is a part-time income, which fits how Anago pitches the unit: a way to supplement your income, full- or part-time, alongside an existing job. To grow beyond it you buy more accounts, each with its own fee and note. Use the commercial cleaning calculator to see what billing you need for the hours you plan to work.

Which FDD items matter most for an Anago buyer?

Under the FTC Franchise Rule, 16 CFR Part 436, whoever sells you the franchise must give you a disclosure document at least 14 calendar days before you sign or pay (16 CFR Part 436 on eCFR). For a unit, that seller is your regional master, so ask for the master’s FDD and read these items:

• Item 1. Who the franchisor is. For a unit buyer this is the regional subfranchisor, with Anago Franchising described as its franchisor. Note how long the master has held the territory and whether it has changed hands.
• Items 5 and 6. The package prices, then the royalty, administrative fee, insurance program, advertising fee, financing terms and any charge for additional accounts. Add them up as a percentage of collections.
• Item 7. The investment table by package, including equipment and the additional funds you need before revenue starts.
• Item 8. Required purchases. Anago lists a margin on supplies, equipment and apparel as master revenue, so check what you must buy and from whom.
• Item 11. The initial business guarantee: how much monthly billing, by when, what happens if you decline an account, and whether lost accounts are replaced.
• Item 19. Any financial performance representation. If the master’s FDD has none, nobody in the regional office may quote you earnings.
• Item 20. Units opened, closed, transferred and terminated in the territory over three years, with the contact list. A fast-growing master with many terminations is selling packages faster than it keeps owners.
• Item 21. The master’s audited financials. A unit buyer depends on the master’s solvency, because the master collects the money.

For a master buyer, the same items apply to Anago Franchising’s FDD, plus Item 12 (territory and whether Anago can place national accounts in it) and the development schedule you must meet.

What do public records and regulators document about Anago and this model?

A search of CourtListener’s published opinions for “Anago” and franchise turns up one case with Anago as a party (CourtListener search): Anago Franchising, Inc. v. Shaz, LLC (11th Cir., April 23, 2012). Anago had terminated its Utah subfranchisor for missing the minimum annual performance requirement in its agreement, the two sides settled, and the appeal turned on whether the court could still enforce that settlement, not on how the system treats unit franchisees (Eleventh Circuit opinion, PDF). Most other hits only cite that case on civil procedure. That is a search of published opinions, not of every docket, and it does not mean no franchisee has ever sued. Item 3 of each FDD lists the litigation that must be disclosed.

The model itself is documented by regulators and the press, and Anago’s own disclaimer places it in that model. Two sources are worth reading in full:

• California DFPI. The state regulator’s page on janitorial service franchises explains that the initial fee usually buys accounts promised for one year, that lost accounts often need not be replaced, that the franchisor controls billing so you are not paid if the customer does not pay, that non-competes often bind your immediate family, and that the level of control these systems exert makes them “especially susceptible to employee misclassification claims” under California’s AB 5 (DFPI). It also notes that janitorial franchise companies often market to immigrants and non-English speakers, and it recommends getting every promise in writing in the agreement itself.
• ABA Journal, September 2014. The article reports on suits against Coverall, Jani-King and CleanNet in which franchisees argued they were employees, including a 2010 Massachusetts ruling against Coverall and a $7.5 million CleanNet settlement, and names Jan-Pro among the systems that market to immigrants (ABA Journal). Anago is not named in it. The legal question it covers, whether a unit franchisee is an independent business or an employee of the system, applies to every master-and-unit cleaning franchise.

The practical lesson is that the courts and regulators look at control: who finds the customer, who sets the price, who bills, who can reassign the work. In the Anago system all four sit with the master. That is the service you are paying for, and also the reason to weigh a unit purchase as carefully as you would a job offer that requires a buy-in.

What should you ask Anago unit and master franchisees?

Ask at least five current and five former unit franchisees in the territory you would join, from the Item 20 list, and at least two masters in other territories if you are considering the master level.

1. How much did you pay, what monthly billing came with it, and how long after orientation did the accounts arrive?
2. What percentage of your collections goes to the regional office each month, every fee included? Can I see a statement?
3. Have you lost an account? Was it replaced, and how long did that take?
4. Do you buy supplies and insurance through the office, and have you compared the prices with a janitorial supplier?
5. How quickly does the office pay you after the customer pays, and what happens when a customer is late?
6. Have you ever brought in your own client? How was the pricing and contract handled?
7. How many hours a week do you and your family clean, and what is left after fees and supplies?
8. For masters: how many units have you sold, how many are still active, and what is your churn each year?
9. For former owners: why did you leave, and did you get any of your investment back?

Anago calls itself the technology leader in franchised commercial cleaning, with cloud software for proposals, billing and cash flow reporting (Anago master FAQ). Ask unit owners what they actually see in it: a schedule, invoices, inspection results, or only a statement.

Anago unit franchise vs starting an independent commercial cleaning company

An Anago unit gives you starting accounts, a name, orientation and a billing office. An independent company gives you the customer relationship, your own prices, and every dollar of collections, in exchange for finding the clients yourself. The second path is slower at the start and cheaper every month after.

The independent route is described step by step in our guide to starting a commercial cleaning company. For the back office a master would run, cleaning software covers bookings, recurring schedules, client records, reminders and card-on-file billing. Broombook is one option, free for an owner who cleans with up to 2 cleaners, and $39 a month on Pro for a bigger crew (pricing, features). No software will hand you accounts; that is the one thing a master sells that you cannot subscribe to.

A fair test: if the unit package you are offered costs $15,000 and comes with $2,500 a month in billing, ask whether six months of your own evenings, a janitorial bond, a website and a hundred cold visits to office parks could win the same $2,500 a month. If yes, you keep the 10% and the customer. If you honestly would not make those visits, the package is buying you something real.

Who is an Anago franchise right for?

The unit fits a cleaner who wants accounts handed over and billing handled, usually part-time at first, and who accepts paying a tenth of collections plus fees for that. The master fits an executive with $219,000 to $339,000 who wants to run a sales office, not a cleaning crew. Neither fits someone who wants to own the customer relationship or set prices.

• Unit, good fit: a couple or a cleaner with a day job, comfortable with evening work, no sales appetite, who will read the master’s Item 6 and 11 before paying.
• Unit, poor fit: an experienced cleaner with referrals, or anyone whose budget depends on income beyond the first guaranteed year.
• Master, good fit: a B2B sales manager who understands that unit churn is the business risk, and who will ask other masters how many units they have terminated.
• Either level: take the full 14 days, have a franchise lawyer read the agreement, and check your state’s rules on independent contractor status. This guide is not legal or financial advice.