Every event is an opportunity to strengthen and grow a franchisee’s business

April 25, 2025

When Rachel Reeves announced the changes to Employer NI and the numbers were crunched showing the resulting huge tax hike, like all businesses we took a rather deep intake of breath at the potential magnitude of the impact on our Franchisees. I say ‘potential’ because like everything that has happened over the past five years stretching back to COVID, it is only a ‘potential impact’ if you don’t look at the situation like an opportunity to strengthen a Franchisee’s business and help it to grow.

How in the world does a tax hike represent an opportunity to strengthen and grow your business? Some experience with similar increases in the past helped but far more important was boldness in setting a new pricing strategy that worked in tandem with changes to how we pay our cleaners, and speed of execution in working with Franchisees to implement the necessary changes.

We don’t take the decision to raise the cost of our cleaning fees lightly and in fact would rather not have to do this, but when the government increases costs there is little that businesses can do but raise prices. But this isn’t a negative – embrace the window of opportunity to do so. Changes to government policy invariably bring extensive media coverage (surrounding the change), helping to do some ‘heavy lifting’ in terms of making customers aware of the changes. We looked at the increase in Employer NI, just like the increase in the national living wage; as a window of opportunity that we needed to capitalise on to implement necessary price increases. And they are absolutely necessary because if you don’t, then a Franchisee will have lower profit and potentially business value too – protecting both should be absolutely sacrosanct to any Franchisor and critical to our role.

The change in employer NI though was very unique to other increases in costs that we have had recently because it also eroded the profitability of our Franchisees’ businesses. We calculated that the hit to profit margins could be as high as 1.5%. Things (like this) that have the potential to reduce profitability, erode the long-term viability of your business model which means your business is not as strong. To therefore say that this change was critical to both the short and long-term success of our Franchisees’ businesses would be an understatement.

With over 40-years of experience we are fortunate to have gone through somewhat similar events in the past and drew upon a plan that we rolled out years ago when the government increased the number of paid holidays, which in effect had the same impact on our business – adding costs and reducing profitability. Within one week of Reeves’ tax hike our Franchisees were sharing detailed reports to help us to craft individual price increase recommendations for every Franchise and a change to how our teams of cleaners are paid. This led to a series of virtual meetings on Zoom & Teams in the lead up to Christmas, reviews of our employment contract with outside solicitors, templates for price increases to our valued customers and materials for our Franchisees to hold staff meetings to get them on board with the necessary changes.

There is always a huge sense of urgency on anything that happens externally that can negatively impact our Franchisees. Holding Franchisee meetings in the lead up to Christmas when, like everyone else they are busy juggling the demands of the season, is clearly not ideal. Nor was arranging reviews of employment contracts with solicitors, or having our internal support team work late hours to develop individual spreadsheets for every Franchisee. But, when the profit and profitability of a Franchisee’s business is threatened, we move heaven and earth to respond. It is events like these where the true nature of our support and our culture of helping Franchisees either reflects in what we do – or it doesn’t.

The results are just now coming in and though it is early days, we can unequivocally say that our plan and strategy has been a huge success. Passing on cost increases to our customers is never an enjoyable activity but they have been so very understanding, as much because of the care and attention we show each and every visit but especially during this period. Despite price increases some by as much as 10%, very few have decided to look elsewhere to have their home cleaned. And when combined with the internal change in how we pay our teams of cleaners, we have helped our Franchisees to grow their business, increase their annual profits and make their business more profitable going forward. All of which makes their business and indeed our business, even stronger.

We never wish for events like COVID, the cost of living or the Employer NI tax hike, which can negatively impact our business. But when these events come along (and there will be more in the future of that we can guarantee) it helps to look at them as opportunities to make a Franchisee’s business stronger. Doing so will in turn make your entire organisation stronger.

For more information about new and resale opportunities at Molly Maid, contact Aaron Watson, Director of Franchise Development, by email awatson@mollymaid.co.uk or by phone 01628 583765.