The Swing To Franchising Is Transforming The Sector, Says Rawson Property Group MD

Although the general public are only aware of one of the factors, there have, in reality, been two factors in the South African residential property sector which have transformed the entire playing field – and made the whole operation more efficient and customer-friendly.

This was said recently by Tony Clarke, Managing Director of the Rawson Property Group. Clarke added that the two factors to which he was referring are:

  1. The insistence on new educational qualifications for all estate agents – a subject that has had considerable exposure, and
  2. The swing among estate agencies to franchise rather than branch operations – an aspect that has received very little coverage.

“I am convinced,” he said, “that the introduction of franchising will come to be recognised as even more important than the imposing of property-related educational qualifications.”

Franchising estate agencies, he said, has resulted in go-ahead, independent, entrepreneurial people being attracted to the sector from the outset. These are, he said, “the sort of personalities who like to take command of their own futures and are only too willing to be given full responsibility for them”.

Clarke said that a good franchisee will always be a self-sufficient, self-motivated person who wants to make the decisions affecting their business.

Why then, Clarke was asked, do not all property franchises succeed?

Clarke said that regrettably it is true that a small percentage of those allowed to establish franchises under big brand names are simply not up to the job. Nevertheless, the most common reason for franchise failures, he said, is an initial lack of sufficient support.

“The best franchisors offer comprehensive back-up such as on-going training and workable systems that make it very difficult for the franchisee to fail. This support does, of course, cost the franchisor, which he has to pass on to the franchisee.  However, it is a fact that the more comprehensive, more expensive systems have been shown to succeed, time and again, while those in which the franchisee is simply given the right to use the brand name and marketing material have been less successful.”

Particularly crucial to the success of a new franchisee, said Clarke, is the regional sales managers – and, he added, such people have to be on hand for franchisees on a 24/7 basis.

“In good groups the national sales managers will always be, I believe, among the most dedicated, willing and experienced people in the entire property sector,” said Clarke.

Asked to comment on the systems that a franchisor might provide to the franchisee, Clarke said that these have to be simplified as far as is humanly possible if they are to achieve their aims of making the clerical aspects of the agents’ tasks more efficient and freeing them up to get on with client liaison and the actual job of selling.

“Those franchisors who are working steadily to be among the front runners in the IT systems they make available to their franchisees, we have found, give them a head start over their competition.”

Looking ahead, said Clarke, it will, he predicts, become more difficult for big estate agency groups to run franchises and branches side by side. The reason for this, he said, is that franchisees are likely to object to the money they pay for their franchise.

“This is not yet a major issue and there are ways around it. Nevertheless, it is clear that, in the long run, most estate agencies are swinging over to full time franchises rather than a mixed branch/franchise operation.”

Contributor: The Rawson Property Group

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