Skip to main content

Should you buy a letting and estate agency franchise?

So you want to be your own boss, you love Homes under the Hammer and when you go on holiday, Rightmove checks if their website has gone down because the traffic to their site drops by a third? Sound familiar?

If you have thought of leaving your job and starting your own lettings/estate business, I bet you haven’t even considered a franchise. Why?  .. because they are a waste of money, you are shackled to something, your cant have freedom, your office has to look identical to brand .. the list goes on.
But its not all bad ... here are four thoughts on letting / estate agency franchising

1. You want to work for yourself. 

Becoming a franchise owner is a great way to avoid ever having to deal with a tough job market ever again, but it isn’t a bed of roses. You will have the Head Office to deal with. I have seen that this isn't a relationship that will be likely to work for someone who is stubborn and independent. For example, if you own a Martin and Co franchise, while you can do things like hire and fire employees, you change the logo to a nice shade of purple, but that is a good thing because you do not buy a franchise because you want to change it. You buy it because it's a tried and tested business model. So if you like to do things your own way and you keep questioning the underlying business model of whatever business you are considering, then franchising isn’t for you

2. Agency in a box

Many people buy a letting agency (or estate agency) franchise expect a "lettings agency in a box." They have  a mistaken  belief that when you open the doors, landlords and free valuations will come like a flood and it will run itself. I am sorry, it doesn’t work like that, you need to be motivated and willing to put time and energy into your franchised business, to make your investment pay off, and you must follow the franchisor's system down to the letter.

3. You don't want to take too much of a risk. 

The advantages of going into franchising are that you have the experience of the franchisor and the system's established franchisees that can guide and support you. A good franchisor will offer ongoing training and support and you have buying power and efficiencies of scale in the franchise system. The franchisor can negotiate lower prices for things like Rightmove and Zoopla, vital things you need to run your agency business.

4. It may be less risky than starting your own business, but it is still a risk

Starting your own agency franchise is not without risk. It is true the banks will lend up to 70% of the venture to fund a lettings franchise at decent loan rates. If you are a one man band, you are looking at no more than 40% to 50% at eye watering rates that would make Wonga purse its lips. Franchises do fail though .. it’s quite rare but they do fail though. Be aware of that.

Too many of us get caught up in what we are supposed to be doing that we lose sight of what we are meant to do. I have met over 200 estate and letting agency franchisees over  the past few years. I have met exceptional ones, good ones, average ones and damn right poor ones. The best franchise owners are exceptional operators, who work ON the business, not IN the business. That is not to say that is all you need to do, to be successful in franchising.

Don’t buy a franchise because you think the brand itself will drive punters to your door. Brand is important, very important in the success or failure of a lettings/estate agency business, but so is your location, market strength, service and your employees. But the biggest by a country is the  courage, determination and resilience  of the  business owner. If you haven’t got the fire in your belly and balls made of Uranium, whether you have a franchise or not, you won’t succeed.

So should you franchise? I say both yes and no. It depends on you.

PS The people that fail with franchises would have failed without a franchise... it’s as simple as that.

Popular posts from this blog

One tip to get better Conversion Rates

Some Estate agents boast about having really high conversion rates of 75% to 85%. These listers consider themselves the daddy listers, the big cheese valuers, the mutts-nutts of Valuers. Other Estate Agents have really low conversion rates of 20% to 25% of the free vals / mkt appraisals they go to. These listers/valuers wish their conversion rates were higher Recognise anyone that fall into those two groups? Which group of those would you rather

Are Countrywide becoming the Tesco's of UK Estate Agency?

10 years ago – Tesco’s could do no wrong, the darling of the stock market, huge profits, they were invincible ..  but now, still huge – Tesco’s are not the force they once were. Tesco’s Senior executives were pushed out of the business which also suffered a culture change which was "not for the better". .. and that made me think, the of the possible similarities between what happened at Tesco’s and what appears to be happening now at Countrywide
For years, anyone who had dealings with Countrywide would come away with respect for the apparent clinical efficiency of its business model. One company, many brands. The senior management team had so much depth of experience .. both a mile wide and a mile deep. Countrywide played hard but

Cheap Fees in Estate Agency

My good lady wife loves shopping online. In fact, Amazon, they rang her last week to check she was Ok as she hadn’t ordered anything for three days (only kidding .. they rang after two days)
She ordered some Gin glasses (not from Amazon) from the internet – you know the ones that look like a goldfish bowl on a stick. The glass seller put the box of six glasses (the box being quite flimsy in the first place) in another brown cardboard box. This brown cardboard box was a couple of inches bigger around the sides of glass box, but the same height as the