Consumer Products

P&G Looks to Franchise Tide Dry Cleaning


(Editor's Note: An earlier version of this story incorrectly said Procter & Gamble's car wash businesses carried Tide branding.)

Procter & Gamble (PG), long dominant in detergents to wash clothes, wants to dry clean them, too. The world's largest consumer products company plans to roll out franchised Tide Dry Cleaners across America. Some franchising vets say the strategy could be a hit. Andrew Cherng, founder of Panda Restaurant Group, which operates Chinese fast-food outlets in U.S. malls, plans to open about 150 Tide-branded dry cleaners over the next four years. "I wasn't around when McDonald's (MCD) was taking franchisees," he says. "I'm not going to miss this one."

P&G wants to put its brands to work selling services to boost U.S. revenue and promote its products. Three years ago the company launched Mr. Clean Car Wash; nine franchisees are now in business. In 2008, P&G opened three test Tide Dry Cleaners in Kansas City. Having fine-tuned the concept, the company is now going national. P&G is moving into services "that are virtually unbranded," says Michael Stone, head of The Beanstalk Group, a brand-consulting firm. "One would think consumers would trust a Tide Dry Cleaners because they know P&G is behind it."

The Tide and Mr. Clean ideas sprang from P&G's FutureWorks unit, which identifies and develops new businesses. Nathan Estruth, who runs the division, says his staff must get "comfortable with ambiguity" and accept that most projects "get shut down." P&G says not just any brand can be hitched to a service. It looks for a fragmented market where consumer expectations aren't high. (Don't expect Pampers Day Care centers.) Its research showed that both cleaners and car washes fit the bill.

P&G lacked franchising experience so it broke its decades-old practice of internal promotions and hired William Van Epps, who had managed franchising at Pepsico (PEP). P&G set up a company called Agile Pursuit Franchising with Van Epps in charge. His team put a premium on consumer convenience. Each dry cleaner features a double-lane drive-through and lockers accessible for after-hours pickup. There are lollipops for kids and Iams biscuits—yes, a P&G product—for the family dog. The company hopes to lure eco-conscious consumers with proprietary technology that doesn't use the solvent perchloroethylene. P&G says its stores will charge about the same to dry clean clothes as the industry average ($2.25 for a man's shirt; $11.50 for a dress).

Opening a Tide Dry Cleaners costs a franchisee about $950,000; a Mr. Clean Car Wash up to $5 million. Don Nix, a former accountant, operates a Mr. Clean Car Wash in Marietta, Ga., and plans to open a second one next year. People won't necessarily identify with "Don's Car Wash," he says. "The brand and the logo of Mr. Clean [has] huge value for attracting new customers."

While franchising allows P&G to off- load much of the financial burden, the model is still risky. Corporate parents and owner-operators don't always agree. And dirty stores or lousy service could hurt Tide, which consulting firm Millward Brown ranks fifth globally as measured by value derived purely from brand equity. "If we did anything to damage that," says Chief Technology Officer Bruce Brown, "we'd stop."

The bottom line: P&G is putting its Tide and Mr. Clean brands on dry cleaners and car washes. The risk is that franchising could tarnish their reputations.

Coleman-Lochner is a reporter for Bloomberg News in New York.
Clothier is a reporter for Bloomberg News in Detroit.

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