Are letting and estate agency franchises worth the money?
Why dont many letting agents or estate agents who decide to set up themselves go with a franchise. You could be missing a trick?
Forget the upfront fee which is between £10k and £25k, how do you feel about handing over between 8% and 12% of your turnover (not profit .. turnover) to Head office .. that’s probably half your profit. If you ask some existing franchisees, they will say no.
But here lies the problem .. if you asked Turkeys if they thought Christmas was a good idea, most would say no.
I believe a lot of franchises see it as dead money but I think they are short sighted.
The best franchisees see paying the 8% to 12% as access to an exclusive club which gives its members lots of good things.
The good franchisees see this split down in this way..
• Quarter of the fee pays for the brand and what its stands for (club membership)
• Quarter of the fee pays the support and guidance of the franchisor together with legal helplines
• .. the remaining half pays for something money can’t buy (ironically it can but stay with me…..) is the ability to network with 10, 20, 80, 150, 200 competitors who are all part of the same franchise family, so any idea one franchisee has that works, can be rolled out to the franchise network. The price for access to the club, to all these ideas which will given to you by the bucket load, if you ask is priceless. Start by yourself and you won’t have any friends.. true you might be member of the local ARLA group, but these fellow agents are your competitors and therefore reluctant to share knowledge
… that could be priceless? So before you reject out of hand, just think before you do .. you might be surprised.
In a future article I will give the pros and cons of franchising in greater detail.