Coverall Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$17,917 - $64,048
Franchise Fee
$11,678
Total US Locations
5,588
Business Summary
Coverall is a commercial cleaning franchise that licenses independent businesses to use its tradenames, trademarks, and the proprietary Coverall Program. Coverall franchisees typically provide commercial janitorial services such as floor care, trash and waste removal, sanitizing surfaces and equipment, dusting, restroom cleaning, vacuuming, and light maintenance. They can also offer special services like day porter services, special event cleanup, blind cleaning, light bulb changing, deep cleaning, upholstery cleaning, machine scrub and rinse, strip and finish, scrub and recoat, windows, carpet extraction, carpet encapsulation, and electrostatic disinfection. Coverall distinguishes itself from competitors with its proprietary Coverall Program.
Corporate History
Coverall North America, Inc. was incorporated in Delaware on February 26, 1985. The company has been offering commercial cleaning and related special services franchises since July 1985. In 2021, Wellspring Capital Management LLC purchased Coverall's parent company, CNA Holding Corporation, bringing Coverall under its umbrella of subsidiaries. Other former affiliates or subsidiaries like Majco, Inc., Triesler Company, Inc., and Coverall of Boston, Inc. merged into Coverall or were dissolved over the years, some serving as predecessors at their former locations. Coverall currently focuses on offering and awarding Commercial Cleaning Franchises.
Financial Overview
Investment Range
$17,917 - $64,048
Franchise Fee (Low)
$11,678
Franchise Fee (High)
$40,320
Royalty %
5%
Equipment Costs (Low)
$990
Equipment Costs (High)
$2,550
Working Capital
$1,907
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Coverall's financial statements have received an unqualified opinion from its independent auditor. Management states that the company is vigorously defending ongoing litigation, and while it cannot estimate the range of loss for one specific case, it believes the ultimate outcome of all litigation should not have a material adverse effect on the company's consolidated financial statements. The company has no loss contingencies recorded as of December 31, 2024 and 2023.
Financing Details
Coverall offers direct financing for a portion of the Initial Franchise Fee, which can range from $11,570.00 to $18,063.36, depending on the franchise package. The interest rates are 6%, 9%, or 12% per annum, varying with the package and financing term, which can be from 1 year up to 30 months. Equipment purchases can also be financed up to 100% at an 18% interest rate, payable over up to 24 months. Additionally, Coverall may finance up to 80% of the sales and marketing fee for Additional Business, with a 12% APR, payable over up to 12 months. All financed amounts are typically evidenced by a Promissory Note and require a personal guarantee from the franchisee's shareholders or members. Payments are deducted monthly from customer collections. In case of default, Coverall can accelerate amounts due and collect attorney's fees. Coverall also provides a Cash Flow Protection Program as a short-term, interest-free loan, advancing amounts billed to customers for up to 60 days.
Performance Metrics
Total US Locations
5,588
Franchised Units
5,588
Corporate Units
0
Franchising Since
1985
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
14
Litigation Summary
Coverall has been involved in several litigation cases, both pending and concluded. Two significant pending cases are Carlos Rivas vs. Coverall North America, Inc. and Sergio Gonzalez v. Coverall North America, Inc., both filed in California in 2018 and 2016 respectively. These putative class action lawsuits allege that Coverall misclassified its franchisees as independent contractors, leading to various violations of the California Labor Code, including issues with wages, deductions, and payroll records. Coverall disputes these claims and is vigorously defending both actions, which have involved appeals to the Ninth Circuit and the U.S. Supreme Court, and are currently in arbitration or have pending motions. A case in New Jersey, Erika Richardson and Luis Silva vs. Coverall North America, Inc., alleging similar misclassification under New Jersey Wage Payment Law, was settled in May 2022 with payments to the plaintiffs without admission of liability by Coverall. Several other similar arbitration demands from former franchisees in New Jersey (Cinthia Yarleque, Ivett Alcazar, Jose Munoz, Miguel Yamunaque, Jimmy Soto) were settled in late 2021 and early 2022, also without admission of liability. Additionally, a class action in Massachusetts (Pius Awuah, et al v. Coverall North America, Inc., and related Cooks and AAA claims), alleging misclassification and wage violations, was settled in 2015 for $5.5 million, leading to Coverall withdrawing from Massachusetts. Another class action in Georgia (Randall Richardson and Janitorial Tech, LLC v. Coverall North America, Inc.) alleging Fair Labor Standards Act and Georgia law violations, was settled in 2018 with a payment and cancellation of franchisee debt. A case involving a former master franchisee, Pacific Commercial Services, LLC vs. Coverall North America, Inc., alleging breach of agreement, was settled in August 2021. A civil penalty of $100,000 was paid to the U.S. Federal Trade Commission in 1994 related to disclosure practices. A recent case in Connecticut, Caribe Billie and Quincy Reeves vs. Coverall North America, Inc., also alleging wage act violations, was settled with Reeves in November 2023 and Flores in April 2023.
Bankruptcy History
Coverall's Item 4 discloses personal bankruptcy filings by two of its General Managers. James F. Bellante, Jr., General Manager of the Pittsburgh Support Center, filed for Chapter 13 bankruptcy in October 2011 and received a discharge in November 2016. Chris Taylor, another General Manager, filed for Chapter 13 bankruptcy in July 2015 and received a discharge in July 2020. Both cases are now closed. Coverall itself has no bankruptcy history to disclose.
Agreement Terms
Initial Term
20 years
Renewal Conditions
To renew a Coverall franchise, franchisees must be in good standing and satisfy all contractual conditions for a successor term. They must sign Coverall's then-current Franchise Agreement for the successor term, which may have materially different terms and conditions, including potentially higher royalty and/or support fees. Additionally, franchisees will be required to sign a general release in favor of Coverall as a condition of any Successor Term Franchise agreement.
Training & Support Program
Franchisor Assistance
Coverall provides comprehensive support to its franchisees. Before opening, Coverall licenses franchisees to use its names and service marks, offers a starter-kit of equipment and supplies for purchase, and provides a mandatory Initial Training Program. The Initial Training Program consists of 33 to 46 combined hours of classroom and hands-on instruction covering cleaning techniques, customer service, and business management basics. It also provides manuals and online access to training materials. After opening, Coverall offers ongoing support including answering routine business questions, providing additional training and new methods through updated manuals and seminars. Franchisees can participate in Coverall's optional Business Protection Plan for general liability insurance and fidelity bonding, and an optional Franchise Owner On-the-Job Accident Insurance Program. Coverall periodically conducts site surveys of customer locations to maintain service quality and helps promote and solicit new business for franchisees, for which a sales and marketing fee may apply. Coverall does not operate an advertising fund but may advertise in various media. Franchisees are required to have access to a cell phone and a personal computer or hand-held device with internet access. Coverall may also assist with bidding for potential customers for a fee.
Initial Training Hours
46
Training Location
Regional Support Center, Customer Facility, and/or virtually
Ongoing Support
After opening, Coverall franchisees receive ongoing support including access to routine business questions, additional training and new methods through updated manuals, personal consultations, and group seminars. Franchisees can opt into Coverall's Business Protection Plan for general liability insurance and fidelity bonding, and a Franchise Owner On-the-Job Accident Insurance Program. Coverall also conducts periodic site surveys of customer locations to ensure quality and brand protection. The franchisor assists with promoting and soliciting additional new business. While there is no advertising fund, Coverall may advertise in various media and provides marketing materials for purchase or approval. Franchisees are required to have internet-connected devices and may receive assistance with bidding for potential customers for a fee.
Franchise Requirements
Ideal Candidate Profile
Coverall is seeking independent business owners who are capable of operating a commercial cleaning franchise as a corporation or limited liability company. While not required, Coverall strongly recommends that franchisees directly participate in the management, supervision, and operation of their business. Veterans are considered qualified applicants, with specific discounts offered. Franchisees must meet requirements related to business entity formation, obtaining a Federal Employer Identification Number, a business license, and opening a business bank account.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Staff Count
2
Territory Size Requirements
Coverall franchisees do not receive an exclusive territory. Coverall states that it endeavors to offer customers within no more than a 30-mile radius from the franchisee's designated location, but this is not a protected or exclusive territory. Franchisees may operate only within the areas where their designated Coverall Support Center conducts business. Coverall will award numerous other franchises within these same areas, and Coverall and its affiliates retain the right to operate other businesses, use the Coverall Marks and system to sell similar products or services through alternate distribution channels (including the internet), and compete with franchisees in any location. There are no specific defined territory size requirements in terms of exclusive geographic boundaries, population, or square mileage for Coverall franchisees.
Staffing Notes
Coverall franchisees are responsible for all their own employment decisions, including hiring, firing, training, wage and hour compliance, and supervision. While many Coverall franchisees do not have employees during the startup phase, if they do hire staff, they must obtain workers' compensation insurance regardless of state law. Employee Confidentiality/Non-Solicitation Agreements are required for all employees. The typical staff count for a Coverall franchise ranges from one to three employees.