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Can Coldwell Banker crack the UK?

The US-based franchise network has its sights on the UK prime property market so should the blue-chips be worried? Coldwell Banker GB’s Director Stuart White talks to Nigel Lewis.

Nigel Lewis

Coldwell Banker image

It is now six months since Coldwell Banker officially launched in the UK at last November’s Negotiator Conference, claiming to be bigger than Countrywide, better connected than Savills and offering an improved deal to franchisees than its counterparts, Century 21 and Remax. The first two of these claims are easy to substantiate, although the latter less so. Coldwell Banker operates in over 40 countries, has 3,000 offices and over 80,000 employees. Countrywide by comparison has 400 offices. Savills, on the other hand, operates in more countries but it has only 700 offices and 30,000 people across its associate network.

Despite these impressive comparisons, Coldwell Banker’s UK master franchise holder GBRE Ltd has its work cut out to establish the brand in the UK, particularly as many in the industry are, at best, sceptical of franchises. Winkworth and Belvoir are the only other high-profile success stories so far. So what’s the team behind the Coldwell Banker launch like?

THE LEADER

Stuart White imageOne of the GBRE directors leading the charge is Stuart White, who has 20 years’ experience working in the property industry including an eight-year spell at Countrywide.

“I joined Countrywide when estate agency was the part that lost money and financial services was the part that made it – which was quite an interesting learning curve,” he says.

“I was there all through the Harry Hill era. He used to directly manage the financial services subsidiary I worked in, so we were exposed to the nuances of Harry’s mind on a regular basis.”

Franchising can be an exceptional tool for business if there’s lots of help, support and the network is properly inter-connected. Stuart White, Coldwell Banker GB.

Stuart and Countrywide then parted company and he moved into franchising, including a brief spell at Remax followed by eight years at Century 21, where in his final role he was managing director.

Stuart says that what attracted him to franchising was the way, while the blue-chips were expanding via acquisition during the noughties, companies like Remax and Century 21 were growing by opening offices. “Remax looked like a very credible kind of solution to the challenges of quick expansion but the minute I got through the front door I realised it was a brilliant idea badly executed – too many people were in charge of the same thing and it was the type of franchise system that, when you bought a licence, you were pretty much on your own, but franchising can be an exceptional tool for being in business if there’s a lot of help, support and the network is properly inter-connected.”

He then realised Century 21 didn’t have a presence in the UK and he spent nine months negotiating to buy the master franchise for the UK. After signing up he then opened offices in England, Scotland and Northern Ireland.

“I had a decent journey at Century 21 including surviving the recession – which was interesting because it was then that I learned first-hand about partnerships and how the minute there’s a little bit of stress, they start to fracture,” he says.

“Century 21 came out of the recession, started opening up offices again and then had interest from a range of services companies who wanted to buy the master franchise, which they were attracted to because it doesn’t involve property leases, pensions funds and a huge staff.

“That’s controlled by the individual franchisees – so the master franchise is always going to be attractive to companies who want to use the network to sell in their products.”

MOVING ON

Coldwell Bankers UK imageIn 2013 the Century 21 master franchise was sold to property services company SDL and Stuart moved on, spending eighteen months preparing to launch Coldwell Banker in the UK. It now has four offices here and aims to have 50 within five years, the same number that Century 21 has. So far all those are in London in Borough, Kensington, Notting Hill and The Strand. The three planks of Stuart’s sales pitch to agents, he says, are the financial structure of franchises, the back-up support Coldwell Banker gives its franchisees and the international nature of the company.

The prime market in the UK is dominated by a few players such as Savills and Knight Frank; there are not hundreds of competitors.

Those joining “the family” pay a joining fee of £25,000 to secure a franchise and then £5,000 every five years to remain within it. Stuart says there are no monthly ‘office fees’ but that franchisees pay a ‘royalty’ on each sale – although he didn’t reveal how much that is.

Coldwell Banker UK is also promising to support its franchises and their staff with a five-day training programme and monthly back-up visits to help the franchisee make the most of their investment “You can’t really change the ‘product’ that agents offer, or the buyers, sellers, and landlords who interact with it – but you can make the journey very service orientated, whereas in the past it’s been more about getting people through the branch door,” he says.

Stuart also claims that franchisees will get “at least one sale from the wider Coldwell Banker network to justify the joining fee.

“The international, high-net worth nature of our clients, and the properties we deal with worldwide, mean the commission rates make it very worthwhile, if you are good at what you do,” he says.

“The first four listings we had at our South Bank office came from an Egyptian who had walked into our Cairo office and asked for his apartments in the UK to be put on the market. That’s what a franchise brand can bring to you.”

LOOKING AHEAD

Agents reading this might wonder whether there’s room for another network like this here, but Stuart says he’s spotted a gap in the market for an international estate agent brand that deals with some of the world’s most expensive properties.

“The prime market in the UK is pretty closed, and dominated by a few players such as Savills and Knight Frank; it’s not a market where there are hundreds of competitors looking to take a slice of the action,” he says.

Stuart is convinced that the prime market is a cosy club of agents who don’t have the international prime market connections that Coldwell Banker has and that this puts his UK franchisees in a strong position to benefit from the international trade in property that has made London’s prime central market so successful in recent years.

“Coldwell Banker for me is a brand that’s middle to top end. That’s where it operates almost exclusively – we won’t open up across the UK; it will be in the prime markets only – the top ten to 15 per cent by price.”

One unusual aspect of Coldwell Banker is that unlike many of its prime competitor agents its franchisees only list with Zoopla or OnTheMarket at the moment. “It’s up to our owner-operator franchisees who they list with but we help them analyse their local markets and then decide which portal is working best for them,” says Stuart.

“We felt that Zoopla and OnTheMarket wanted to do business with us and came to the franchise office openings – whereas Rightmove didn’t and passed us around when we enquired.”

Whether this is a wise approach to take given Rightmove’s continuing dominance of online sales and lettings marketing and leads generation remains to be seen. But Coldwell Banker can at least claim to one of the few agents in the UK to be part of a organisation with a larger turnover than Rightmove.

Realogy is its US parent company which also owns Century 21 as well as Sotheby’s International Realty and it turned over $1.1 billion during the first three months of this year.

www.coldwellbanker.co.uk

Coldwell Banker GB helps the X-Men

It’s an unusual pairing, but everybody needs a place to live and it seems that Coldwell Banker is working with the X-Men.

Stuart White, master franchisee of Coldwell Banker UK, who recently attended the premiere of the latest X-men film in London said, “I can say that Coldwell Banker is the Official Real Estate Partner of the X-Men Apocalypse movie, but I cannot confirm or deny that the X-men have enlisted our help in finding a multi-million-pound mansion in the UK. What I would say however, is if anyone has a large property with an underground private jet hanger… please get in touch!”

“We are looking for ambitious individuals to join from who have a property or financial services background and who are looking to become their own boss. We provide industryleading training and support to enable franchisees to run a successful and profitable estate agency specialising in the sale, rental and management of luxury property.”

July 24, 2016

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