System4’s Franchise Model Gives Owners Room to Grow in Commercial Facility Services

Scott Kubec has been around franchising for most of his life. Long before he stepped into a leadership role at System4, he watched his father build a business in the cleaning industry. Today, as chief operating officer of System4, Kubec is helping grow a commercial facility services franchise built around long-term demand and practical support for franchise owners.

“My father started in franchising in 1986,” Kubec said. “He was Coverall Cleaning Concepts’ first master franchisee. So technically, I’ve been around franchising since I was 8 years old, one way or another.”

That early exposure gave Kubec a firsthand look at business ownership. While he originally studied literature and creative writing and planned to become a professor, his career took a different turn. After working in sales, he joined System4 in 2008 and has spent the last several years helping shape the company’s growth.

System4 provides commercial facility services for businesses through a one-stop model that simplifies how clients manage ongoing property needs. Kubec said customers can rely on one point of contact for janitorial work and a wide range of facility-related services, which has helped the brand stand out in the market.

“Our model is different from a lot of businesses in the space because we bring what we call the big-business facility solution to businesses of any size,” Kubec said.

The company currently operates in 66 markets with 42 franchise partners, many of whom have expanded into additional territories. System4 has remained intentional about expansion. Rather than adding units as quickly as possible, the company focuses on opening the right markets and making sure franchise partners are set up correctly from day one. Because territories are larger, each launch requires a strong foundation and close support from the corporate team.

“The industry that we’re in isn’t a fad,” Kubec said. “It’s not going anywhere. Our franchise partners only need to grab a very small slice of the pie in their local market to create a multimillion-dollar business.”

As System4 continues growing, the franchise remains focused on helping franchisees scale in a way that feels sustainable. 

Kubec joined 1851 Franchise Publisher Nick Powills on a recent episode of the “Meet the Franchise” podcast. A transcript of Kubec’s interview with Powills has been provided below. It has been edited for brevity, clarity and style.

Nick Powills: How did you accidentally fall into franchising? What’s your franchise backstory?

Scott Kubec: Sure. Actually, it’s an interesting backstory. My father started in franchising in 1986. He was Coverall Cleaning Concepts’ first master franchisee. So technically, I’ve been around franchising since I was 8 years old, one way or another. I started working with System4 in 2008, and I’ve been part of franchising ever since.

Powills: Go back to that. How old are you when your dad gets started?

Kubec: Eight years old.

Powills: I’m always fascinated by this. As an 8-year-old, you probably don’t completely understand it, but do you understand that your dad’s an entrepreneur? Do you understand that he bought into a business? What’s your awareness? At what point in life does awareness of what your dad was doing come into fruition?

Kubec: Yeah, good question. I was always pretty aware. I’m the oldest, so I definitely understood that he had a business and didn’t have a traditional job. I would go with him on weekends. Back then it was, “Hey, I’ve got to work. I need to go to the office. I’ve got to make follow-up calls,” because he was also selling unit franchises at the time under that model. So I had a pretty good grasp early on that he owned his own business and also helped others get into their own cleaning businesses.

Powills: So figuring this out and going through school, what’s your dream from a career standpoint? How much entrepreneur is inside you? Where does all that land with you?

Kubec: It started to come out a little when I was an undergrad. I actually operated a small cleaning company through my dad. But my original career aspirations had nothing to do with business or franchising. I was going to school to become a professor of literature and creative writing. That was my track.

Then life starts to happen, and I realized I needed to make a little more money than that field was likely to generate. So I completely pivoted right at the end of grad school. I got into sales first, doing B2B, door-to-door, old-school cold calling for about three and a half years in South Florida. Then I decided to move back to Cleveland, and that’s when I started working with my dad at System4 in 2008.

I always had the idea of trying to figure things out in terms of how to make money as a college student and grad student. There was always a need for money outside of taking out more loans. I was pretty entrepreneurial at times and was always able to figure out ways to generate what I needed.

Powills: Love that answer. It keeps unpacking my curiosity. A few things stand out. One is that I always had entrepreneur in me, I just didn’t know where it would find its way into business ownership. Oddly, I started our company in 2008, too.

I was a journalist, and looking back, journalism moving into sales gave me an edge because I could communicate differently. Frankly, on the writing side, I was never a great writer. I was more of a great interviewer. That was my skill set. I could talk to someone and build stories around interviews and listening.

I say that because your desire to teach and your creative writing background—even though you ended up in sales—I’m sure some of those fundamentals gave you an edge. Now fast forward into business, and you’re able to leverage that. Does that connect with you?

Kubec: Yeah, absolutely. In particular, the teaching side. When I was in graduate school, I had to teach classes independently. I’d say that’s probably the biggest through line. It taught me how to connect with different types of people and quickly identify how to tap into what interests them, even if it’s something they may not naturally be interested in.

I was teaching entry-level English courses at a university, so everyone had to take them, and not everyone was excited about that. That teaching aspect—connecting with people quickly and engaging them—has probably been the biggest skill set I’ve leaned on over the years.

Powills: Going back to working with your dad, when you made that shift, did you identify as an employee, a business partner or an entrepreneur? If you had to classify yourself, what would you say?

Kubec: It’s evolved. At first, I was definitely just an employee among a few other employees. In my mind, I probably thought a little differently, but the way I operated was as part of the team. I was there to do my job. I certainly wasn’t handed a high position at first. Now it’s much more of a partnership.

Powills: Give me a state of the union on the business. What is it? What are you doing? How are things going?

Kubec: Sure. What we do is provide a one-stop solution for facility services. Our model is different from a lot of businesses in the space because we bring what we call the big-business facility solution to businesses of any size. When a client works with us or one of our franchises, they’re able to pick up the phone, use our software application or send an email to request any service they need. We’re big on solutions and problem-solving for our clients.

Overall, the business is tracking quite well. We’re currently operating in 66 markets. We’re selective in terms of how many franchises we open each year because it takes a big lift from the team, and we want to make sure we’re doing it right. We also sell fairly large geographic territories, so there’s a lot that goes into launching them properly and getting our franchisees—or as we call them, our franchise partners—on the right path to succeed.

Powills: How many franchise partners do you have?

Kubec: We have 42 partners operating across 66 markets, so quite a few multi-city owners.

Powills: Obviously, you’ve been doing this for a while. I’d call that a win, but in franchising you always want more. How do you feel about having 42 with 60-plus markets? What’s the vision there?

Kubec: We feel really good about it. It’s always positive when owners want to expand within the brand and take on more territory. From our side, we love getting behind people who are succeeding in the model, understand the model and deliver a great partnership to us and to their clients. So we’re very happy with the direction the business has been going and where it will continue to go.

Powills: What headwinds do you see your industry facing right now? Maybe not franchising specifically, but specific to your business.

Kubec: Consolidation is a big one. There’s a lot of private equity money behind a couple of brands, and they’re doing a lot of rollups. That’s definitely very prevalent. And of course, artificial intelligence. We’re not seeing it so much in terms of labor displacement because the services we provide are very manual. You actually need people to go do the work.

But AI in the sense of predictive maintenance and being able to access and aggregate data at scales we haven’t been able to before—that’s very impactful. It helps us provide our franchise partners with insights into their business.

For example, if a sales rep is going out to cold call for two hours, what’s the best type of account to spend time pursuing? Now we can access years of data and say, here are the top three places you should be looking based on revenue and margin.

Powills: That’s interesting on the AI front. It can’t displace the labor. Could fancy robots eventually do some of it? Sure. But it’s not going to displace the actual work anytime soon because the cost is too upside down relative to the return.

Kubec: Correct. You hit the nail on the head. There’s obviously a specific niche market for those robotic applications, but with our customer base, we see a pretty long runway before—if ever—the technology gets to the point where a 3,000-square-foot urgent care facility can really leverage that type of technology.

Powills: Does this conversation come up with your franchisees? Are they avoiding it? What’s your responsibility as a franchisor to contribute back? What does AI mean to business in general?

Kubec: It’s funny you ask that because we’ve been having a series of meetings at our corporate office with smaller groups of franchise partners, and that’s actually one of the main roundtables we’re doing.

One is understanding how they’re using it in the field. And from a responsibility perspective, we look at part of our role as a franchisor as being the R&D department. There are lots of things we’re trying. Some hit dead ends and we scrap them and move on. But there are other approaches with AI that we feel will be very impactful to our franchise partner network.

That includes what I referenced earlier around sales insights, but also some interesting ways to analyze scopes of work against a large amount of production data. That lets us sit down with customers and explain that if we adjust frequency here or there, they’re still going to get the same result with a more competitive price point.

Powills: I have a weird question. What would an average client pay on a monthly basis?

Kubec: For us, our average janitorial client across the country is a little over $1,500 a month.

Powills: And that’s actually not awful. I think about the services you offer back to facility management at the commercial level. It’s next level.

What I’m always interested in is you handle repairs, carpet cleaning, janitorial and all the things that also happen in residential. So my gut response is residential won’t pay enough for it to make sense, which is why you don’t go there. But is that the real reason? Because it seems like you guys could dominate the residential space too.

Kubec: That’s a good question. We’ve never really done anything on the residential side and currently don’t have any plans to.

Part of it is our background has always been in the B2B world. We’re comfortable in that space. Also, the way we deliver services across the country is through local established companies that go through a vetting process. We really try to understand them, how they’re trying to grow and how they take care of their customer base. We feel that’s a much better fit in the B2B space versus residential. We’re much more comfortable there, and it continues to grow year over year from an outsourcing perspective.

Powills: That’s a big point. We’re seeing the business continue to climb, and there’s still plenty of market share to gain. There’s no reason to diversify into residential.

Kubec: Right.

Powills: Let’s close on this. If there’s a franchise buyer watching this who’s interested in the business, what do you want them to know?

Kubec: First of all, it’s highly scalable. We’ve designed the model so people can build teams and scale significantly without taking on a lot of overhead as they add customers. Also, we’re highly available as a support and management team. Every one of my partners has all of our cell phone numbers. They know they can reach out anytime they need to.

And the industry we’re in isn’t a fad. It’s not going anywhere. Our franchise partners only need to capture a very small slice of the pie in their local market to create a multimillion-dollar business they can own for as long as they’d like.

The last thing I’d note is that from a franchisor perspective, we view ourselves as true partners. Our royalty structure is unique in that we have a sliding-scale royalty structure for franchise partners. They close their books, and whatever their operating margin percentage is ties to the royalty percentage they pay on top-line sales.

So we’re very low in terms of fees and ongoing costs, which allows franchise partners to focus on growing their business and putting funds back into expansion.

Powills: Amazing. A franchisor who says let’s actually partner with franchisees, whether they’re profitable or not.

Kubec: Yeah, and that perspective comes from my dad having been on both sides of the table as a franchisee and a franchisor. That’s something we talk about a lot—how to continue bringing new things to the table and add value to the franchise partner network.

Powills: That last point is huge. Your dad having seen both sides creates such a value proposition. When someone knows what it feels like to pay royalties, knows what it feels like to be supported—or not supported—and knows where the gaps are, they can build a franchise brand with that in mind. That’s an invaluable tool to have as a franchisor.

Kubec: Yeah, I’d say that’s been one of our biggest topics of conversation over the last 18 years and will continue to be.

Powills: Well, Scott, thank you so much for sharing your story. Sorry you’re not a creative writing professor. Maybe they’ll figure out how to pay those jobs more one day.

Kubec: You never know. We’ll see what happens.

Powills: Scott, thanks again for joining us.

Watch the full episode above or on YouTube.