State Attorney General Bob Ferguson has filed a consumer protection lawsuit against janitorial services company National Maintenance Contractors, which has 17 affiliate franchisees in the Tri-Cities.

National took advantage of immigrants with limited English proficiency and promised them the independence of business ownership, Ferguson said in a news release. But instead, National, a Delaware-based limited liability corporation, locked its franchisees into contracts that often left them earning less than minimum wage, paying exorbitant fees and with little ability to advocate for themselves.

“These hardworking immigrants thought they were signing up for the American dream,” Ferguson said. “Instead, National Maintenance Contractors deceived them into signing contracts that prevented them from ever realizing that dream.”

National provides cleaning services contracts. It then enters into franchise agreements with janitors – largely non-English-speaking immigrants – to do the work. Many of these franchisees are native Spanish and Russian speakers.

National tells these franchisees that they will be independent business owners and earn a certain amount each month depending on the amount of money they invest up front. For example, to earn $1,000 per month, franchisees would buy one $5,000 “business unit.”

Court documents include a list of current affiliate franchisees and affiliate franchisees – including 17 from the Tri-Cities – who have had a business terminated, cancelled, not renewed or otherwise voluntarily or involuntarily ceased to do business under a franchise agreement (including failures, sales, resales to unaffiliated predecessors and transfers) during its most recently completed fiscal year or who have not communicated with franchisor within 10 weeks of the application date.

The Tri-City franchisees are:

• From Kennewick: KPR Janitorial Service LLC, Vicky’s Cleaning Services LLC, Dependable Janitor LLC, Rocio Jurado, FLM Cleaning Service LLC, Mighty Broom LLC and Tri_R Services LLC.
• From Pasco: AC&R Cleaning Company Limited, Daily Cleaning LLC, Angel Janitor Integrity Services LLC, C&C Cleaning Service LLC, Benjamin’s Cleaning LLC, Family Key Cleaning Services, Leave It To My Hands, Noemi Cleaning Services LLC, Renteria Clean Services LLC and Three Rivers Cleaning LLC.

The lawsuit, filed April 6 in King County Superior Court, asserts National violated the law in multiple ways:

• National deceived franchisees about the amount of income franchisees would earn, in violation of Washington’s Consumer Protection Act. National promised – and its franchisees paid for – a certain level of earnings. However, in reality, National often did not provide access to enough accounts to meet that level, or deceived franchisees as to the amount of work required to obtain that level of promised earnings. Nationals unrealistic work demands and gross underbidding of contracts compounded these issues. National’s conduct left many workers earning less than minimum wage.
• National unlawfully withheld information from franchisees. For example, National did not disclose to franchisees the amount businesses were paying National for the services. Additionally, National did not disclose that the company kept as much as
  30% of that amount. National’s failure to disclose information to franchisees violates the Franchise Investment Protection Act.
• National charged unreasonably excessive fees, in violation of the Consumer Protection Act. For example, National charged a 14% monthly fee for basic billing services. It also claimed the fee would cover collections services, although it rarely, if ever, actually provided them.

The lawsuit seeks restitution for National’s approximately 250 Washington franchisees and civil penalties against National.

Many franchisees were unaware that the work required to earn their desired gross revenue would mean that, in many instances, they would be earning less than the hourly minimum wage.

For example, National offered an account to franchisees to clean a 1,700-square-foot office space six times a week. After National took its fees, the franchisee earned about $6.59 per cleaning. At that time, Washington’s minimum wage was $9.32 per hour.

National’s practice of underbidding for contracts created unrealistic demands on franchisees, court documents said.

National’s agents persuaded prospective franchisees to invest thousands of dollars to enroll in its system. National knew these franchisees spoke little to no English, had limited formal education, and no prior franchise experience, according to court documents. National promised that they would be their own boss and could build their own profitable franchise business.

The reality was very different, according to Ferguson’s office.

Many National clients require that cleaning work be performed during specific hours, sometimes in a specific two- to four-hour window, and on call and available to National and its clients every day, including their days off and holidays.

National also allegedly conceals from franchisees the amount of money it actually receives from clients. National essentially pays itself twice. It pockets as much as 30% of the amount it receives from a client for a contract. Then, it deducts fees and royalties from the portion of the contract that actually goes to franchisees. It does not disclose this practice to franchisees, violating the Franchise Investment Protection Act, said the AG.