Are letting and estate agency franchises worth the money?

January 7, 2015

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.

Christopher Watkin

I teach, guide, support, mentor, consult, counsel, partner many hundreds of UK Estate and Letting Agents in their quest to grow their estate and lettings agencies business. Old school techniques of touting, landlords wanted leaflets, ring us for a free valuation, we have sold this in your street leaflets don't work anymore. There are too many competitor agents .. meaning cheap fees are epidemic, overvaluing is almost a norm to get the stock and don’t even mention about the online/hybrid threat. So a few years ago, I set about looking around the UK and spotted that certain agents (not many mind you) in certain towns were still seen as the ‘go to person on property’, the person the newspaper editor rang up every week for a comment and I looked at what they did and they were doing some thing quite remarkable…. Only one thing but they were doing it so well .. and reaping the reward in terms of decent listings and decent fees, happy staff, decent sales pipeline and exchange income, managed lettings portfolios in the many hundreds .. but more importantly, they really enjoyed the job… they enjoyed getting up in the morning and people looked up to them Over 400 agents around the UK are on a mission to change the way our Estate and Lettings agency profession is perceived and looked upon, doing it town by town, city by city. I guide these 400 agents, teach them, mentor them and support them to be seen in a different light, to be seen as the ‘go to person for property’, actually be the ‘local property expert’ and prove it. Christopher Watkin 07950 147 572 christopher@christopherwatkin.co.uk

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