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Franchise advice


Joining the ‘100 Plus Club’: franchising in the growing property sector


If you already have a foothold in the property or lettings world, why invest in a franchise business? What a franchise brand offers can see your investment grow and leave you with a valuable business asset


E


state agency and letting, along with other property-based businesses, has grown tremendously of late,


reflecting current fluctuations in society and their effects on housing. It’s unlikely, for the foreseeable future at least, that we will see house prices dip, or wages increase, to a level where home ownership once again dominates the landscape. The lettings market, therefore, could be seen as one that has ongoing stability. Take for instance four major names within the sector – Martin & Co, Belvoir, Northwood and EweMove – that have grown to generate real wealth for their investors and founders. In recent times, Belvoir and Martin & Co


floated, Martin & Co acquired EweMove, and Northwood was acquired by Belvoir; so, consolidation has occurred in the sector as can happen in established markets. Did these businesses set off with a vision to be this substantial or have they responded to opportunity accordingly? Only the original founders could answer that question. We can, however, draw a clear message about what it takes to create sizable franchise networks… The foundations of success are, unsurprisingly, the same by and large whatever the sector: 1) A solid business plan, with vision, and allowing for flexibility


2) A successful, profitable business model 3) Some systems, and the capability to further systemise as the business expands


4) A strong brand identity with appeal to clients and customers, and that will, in turn, appeal to potential franchisees


5) Resilient, caring management 6) Great communications with all in the network


Taking these step by step is the work of a


consultancy to help the potential franchisor business prepare deep foundations, on which can be built a successfully scalable business. Carrying out due diligence into business opportunities should highlight the franchisors that take their time when putting the first foundational franchisees in place, as well as recruiting the right type of investor who will be there for the long term and for the benefit of the brand. Note, too, that their business plan can show slow growth in years one and two, for example, but with the ability to then accelerate expansion from year three. The originating business must be


profitable at the operating level – clearly, a growing company will consume cash in infrastructure – and so we always want to see that the business will work successfully on a day-to-day basis… Truly, franchising is a people business (not just a bricks and mortar one). Franchisees need leadership, support


and understanding, the franchisor needs franchisees with determination, common sense and a willingness to follow the system. These are crucial factors to success. By joining a property (or any sector) franchise you become part of a supportive network and benefit from the tried-and-tested business model that you are investing in. A good franchisor will fully understand the importance of keeping people informed, creating a culture of sharing and of enjoyment. Communication should always be a two-way street and it makes sense that the franchisor listens to feedback and new ideas from the network, reflects on this and then acts appropriately.


So, growing a large business is purely an output of starting with a successful small business! Who knows who the next 100 Plus Club member will be – could it be you? l


Nick Williams is managing consultant at Ashtons Franchise Consulting


BUSINESSFRANCHISE.COM 47


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