The CLEANNET USA franchise is a scam, warns Chicago attorney Christopher Williams.
Williams contends that the claim that those who pay Cleannet USA vast sums for the privilege of cleaning toilets and mopping floors are business owners is a cruel ruse.
Williams has filed a class-action lawsuit against Cleannet USA, claiming the company misclassifies its janitorial work force as franchise owners rather than employees in order to duck such employer obligations as unemployment insurance, workers-comp, social security and payroll tax obligations.
He claims that Cleannet USA franchisees “need public assistance because they’re making so little money. They can’t afford health care. If they get injured on the job, they have no workers compensation insurance.”
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Class Action Lawsuit Attorney Calls Cleannet USA Franchise a Scam
A National Public Radio (NPR) news report from radio station WBEZ in Chicago by Chip Mitchell and Shannon Heffernan (Bigger than burgers and fries, franchising blamed for low wages) features both Christopher Williams comments as well as the sad story of a Cleannet USA franchisee with the pseudonym Gloria Pérez:
As franchising has spread, some industries have pushed the model to the extreme. In commercial-cleaning franchising, the customers that need the service usually come through the franchisor. They also make their payments to the franchisor. The franchisee gets just a portion of the payments in periodic checks from the franchisor — after deductions for insurance, royalties, management and so on.
In Chicago, the commercial-cleaning franchisees include hundreds of Mexican immigrants. One of them is a woman we will call Gloria Pérez. We agreed not to use her real name because she fears retribution from her franchisor. Pérez entered the commercial-cleaning business four years ago.
Back then, she and her husband were both unemployed, they had three kids at home and a mortgage, and they were burning through their savings. Pérez saw a newspaper ad placed by CleanNet of Illinois, part of CleanNet USA, based in McLean, Virginia.
The ad said she could have her “own business.” Pérez, interviewed by WBEZ in Spanish, said it seemed like “a good opportunity because we did not have any other work.”
Pérez went in for an appointment. CleanNet gave her more than 150 pages of legal disclosures — all in English, she said. She did not understand much except some numbers on a chart the company gave her. “It said I could make $6,000 a month if I bought a franchise for $21,000,” she said.
After a discount, Pérez said, she managed to put in $19,000. Since then, she says, she has never come close to earning the monthly $6,000. “Every month they take out 20 percent of what I earn,” Pérez says, and she does not get enough assignments within driving distance.
“It’s a scam,” said Chicago attorney Christopher Williams, who filed a class-action lawsuit against the company in March for janitors such as Pérez. “CleanNet is trying to say, ‘We have no unemployment obligation to them. We have no workers-comp obligations to them. We do not pay payroll taxes. We are not their employer. And these are people who need public assistance because they’re making so little money. They can’t afford health care. If they get injured on the job, they have no workers compensation insurance.”
If a customer falls behind on its payments, CleanNet warns it could deduct that money from paychecks too.
Another way CleanNet makes money off its janitors is by loaning them money when they cannot afford the franchise fee — the upfront payment from the workers. Paying off that loan means yet more paycheck deductions.
“All they’re left with after that agreement is debt,” Williams said.
The suit against CleanNet, filed in federal court, claims hundreds of the company’s Illinois janitors are not franchisees but employees. It accuses the company of violating state and federal laws regulating wages and work hours.
CleanNet officials did not respond to our requests for comment about the suit. When janitors in Massachusetts filed a similar claim against the company, CleanNet denied any liability or wrongdoing. It did settle with those janitors last November, agreeing to pay out $7.5 million.
In Illinois, CleanNet is among at least eight commercial-cleaning firms registered to offer franchises, according to the state attorney general’s office. The biggest is Jani-King International, based in Addison, Texas….
…In the cleaning industry, it is not just the “franchisees” who are vulnerable to wage-and-hour violations. Those workers often bring other people to help them with jobs. Pérez gets part-time help from her husband, a son and a neighborhood friend. “I can’t afford to pay them minimum wage,” she said.
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