RESIDENTIALlettings
So what iS the bottom line? Reeds Rains “The initial cost plus working capital requirement is usually between £100k-£130k depending on location. Likely to make a profit in year two – market conditions permitting – investment payback by end year three although cash positive month on month-by-month 10 or 11. Salary depends on whether it’s an owner-driver or managed franchise. Most owner-drivers take a salary in year two.” winkworth “Typically, working capital of circa £100,000 for the first year (more for a city, less for a small town). The biggest delay to cash flow, you are always 2-3 months away from payment after agreeing a sale and the pipeline starts from zero. With a brand like Winkworth you will be at an advantage to establish yourself more quickly, building the pipeline more quickly.” homeXperts “The franchise fees is £3,995 per territory with discounts for multiple territories, plus a marketing budget. “Franchising is not a get rich quick scheme, but without the expense of setting up a high street office our most successful
DATA FOR ENGLAND, IRELAND, SCOTLAND AND WALES
‘Salaries do vary, however we have some very successful
franchisees who have done very well financially out of our model.’ jameS tRimble winKwoRth
franchisees see a return on their investment quickly.” Your move “Normally between £50-60k depending on the location and office”. belvoir “£22,500 plus working capital. In return for this the franchise owner receives a great deal, including a five year renewable license, association with a powerful, established brand, exclusive territory, training, guidance, legal helpline and more.” hunters “A Personal Agent would need around £20k to include franchise fee (£2,995), marketing costs and living costs. Our top earner generated a net profit of £100k in year one and over £160k last year.
“Opening an office is more expensive with a minimum investment of £100k to cover franchise fee (£15,000), shop fit and cash flow until they get cash positive which should be after around 15 months. Mature profits should be around 40 per cent on turnover of £400k.” martin & Co “A new franchise owner would need a personal initial investment of £35,000 – this will include the franchise fee of £18,500 plus VAT. A minimal salary can be drawn out of the business from day one however the typical break even for a new office is mid to end of year two.” aspire “Typically £150k - £175k. Not cheap but rewards are commensurate with investment. Most take a salary or drawing from day 1 – the cost is built into the funding requirement. They should become cash positive after about month seven or eight; payback - three years. Thereafter the target is a 20% pre-tax profit margin after taking a salary.”
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sales@vizzihome.co.uk 20 MARCH 2011 PROPERTYdrum
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