The property sector is changing – on that, almost all sector professionals will probably agree. However, it seems that the industry franchises are leading the way in not only providing estate agents with a lower risk, higher return business model to follow, but one that is increasingly less rigid than before.
Property franchises in their traditional form have been around for decades, there is no longer a one size fits all model. In fact, there are so many variations of a property franchise that even we are hard pressed to find they key differences. At one end of the scale, you have the likes of Belvoir, Century 21, Martin & Co and Hunters – historically traditional agents focused on having a strong high-street presence and attracting ambitious agents. These top-level management franchises also appeal to the more distant business owner types – people who might have little or no property experience but will benefit from an experienced team around them and, of course, the profits.
At the other end of the scale, you have ‘officeless’ broker-style franchises, like Meyers and Moveli, which are less about having the awareness of the brand or a physical branch and more about personal profile.
It begs the question, what do the traditional franchisors offer that corporate chains don’t and how are self-employed franchisee models any different to independents?
Unlimited earning potential
With a plethora of operating structures now available, franchises have helped to pave the way for a range of people – property background or not – to be a successful agent. Compared to being employed by a corporate, this gives an agent unlimited earning potential and a level of freedom to run the business how they want.
Gareth Samples, CEO of The Property Franchise Group, which owns brands including Hunters and Martin & Co, says it’s about the freedom and removal of that glass ceiling: “Being part of a franchise means that you are the boss and in control of your own business and future. You make the decisions and are not tied to the corporate structure.
The harder you work, the more you will benefit, and you will also have an asset to sell in the future, or can build a business that you can pass onto family members. Gareth Samples, CEO, The Property Franchise Group.
“The harder you work, the more you will benefit, and you will also have an asset to sell in the future, or can build a business that you can pass onto family members.” Belvoir’s Head of Franchise Recruitment, Martin Bunney, agrees, “Earnings potential is limited only by time served and ambition. Many of our franchisees exceed £1 million turnover and have sold their franchises, after reaching their goals, for more than £1.7 million.
“Although we compete with corporate businesses, being an employee is not what most persons approaching us look for. They look for a supported business model as entrepreneurs – the security of the business is engendered in the robust franchise model aligned to the drive of the owners.”
The support that Martin talks of is of course available at corporate level, but something that independent agents don’t benefit from and a key motivation behind Dan Pennington’s reason for joining the Century 21 franchise.
“I considered the independent route, and it was only once I met with the Century 21 UK team that I decided to take the franchise opportunity,” said Dan, Owner and Manager of Century 21 Liverpool South. “It felt right, the branding was on point, the flexibility was there, and I would have the added support as and when I need it.”
Marketing support is a huge plus for franchisees, particularly as Ben Littlewood, Co-Founder of self-employed model, Moveli, claims that lead generation is currently one of the biggest challenges in the property sector. “As with all agencies, the biggest challenge is lead generation,” says Ben. “Just because an agent leaves the high street, it doesn’t mean that the competition from the high street disappears. This is why we invest heavily in marketing to generate leads for our agents and build the Moveli brand.”
As with all agencies, the biggest challenge is lead generation. This is why we invest heavily in marketing to generate leads for our agents and build the Moveli brand. Ben Littlewood, Co-Founder, Moveli.
This may be the single biggest reason why agents choose franchising over the independent route, as Managing Director of EweMove, Nick Neill, explains. “An independent not only has to deploy marketing but they have to design and commission it,” says Nick. “Due to our franchisees’ very low operating overheads, this leaves free cash to spend on more marketing and our reliable, repeatable marketing plan generates a consistent flow of new leads.”
An independent not only has to deploy marketing but they have to design and commission it. Our marketing plan generates a consistent flow of new leads. Nick Neill, Managing Director, EweMove.
This approach has recently led to the franchise’s market share increasing from four per cent to seven per cent in areas where they operate. But more than marketing, agents are also faced with a constantly changing landscape of legislation and compliance, which is becoming increasingly difficult to keep up with.
“Initially agents used to join a franchise for the marketing expertise that could be offered to facilitate growth,” says Glynis Frew, Managing Director of Hunters, which has over 200 branches nationally. “Whilst this is still important, increasingly there is concern from agents about compliance and training too.” She adds, “Regulation and compliance requirements can be digested by the centre and converted into practical steps for the franchisees, saving them time and providing a level of security that the independent would not have time or resources to do.”
Regulation and compliance requirements can be digested by the centre and converted into practical steps for the franchisees, saving them time. Glynis Frew, Managing Director, Hunters.
The value in this centralised support was certainly felt during the pandemic. Hunters took all their training online, hosting weekly webinars covering several themes including compliance, understanding the ever-changing COVID-19 regulations and how to adapt business operations.
Bolstered by the brand
Of course, another huge selling point of going down the franchise route is the brand recognition. As the old adage goes, you can be in business for yourself but not by yourself, enjoying a certain level of autonomy but with an established infrastructure and recognisable name behind you.
Andrew Gibbs, Business Development Manager at Century 21, says, “Franchising is the right direction for anyone looking to run their own business with the security of a tried and tested business model, a network of support, best practices and training, and a brand that customers are already familiar with.”
Franchising is the right direction for anyone looking to run their own business with the security of a tried and tested business model. Andrew Gibb, Business Development Manager, Century 21.
This, however, is one of the major shifts happening in the property market right now. Even before the pandemic, there had been a surge in the number of broker-type franchise models springing up and now the industry is seeing a huge uptake in new joiners.
EweMove, which was formed in 2013, is just one of the self-employed franchise models and in 2021 alone, they have signed up 45 new franchisees, taking the firm over the 150 mark. This is a clear indicator that the low entry price of £4995+VAT is appealing to agents and that consumers are far more open to dealing with ‘officeless’ agents.
Hunters also developed their Personal Agent model after the financial crisis of 2008/9 and more recently, Century 21 added a third ‘Solo’ self-employed offering to their traditional premises-based Max and Flex models.
But while these are known ‘brands’ with equity and big marketing machines generating leads, smaller franchises are pushing the personal approach. Moveli, which was launched in March 2018, works hard to create a powerful consumer brand to support its network of agents, but also empowers the individual.
Franchisee, James Giblin, says: “A high street agent is much more brand focused, concentrating on quantity over quality, but Moveli is more about building the brand around you, your face and your name and nurturing relationships.
“Buyers and sellers are starting to warm to the broker model, which is much more like how real estate works in the US, because they love the personal service, having one point of contact and a mobile number. “So we are essentially part of the community we work in, selling ourselves as brands, working less and earning more but with the support of HQ – which varies depending on the commission structure you choose.”
A high street agent is much more brand focused, concentrating on quantity over quality, but Moveli is more about building the brand around you. James Giblin, Franchisee, Moveli.
A level playing field
Digital disruption is also helping to democratise the market and enabling smaller, lesser-known agencies to compete, reaching for a bigger chunk of the pie without breaking the bank. Alongside proptech innovation and the realisation that property sales and lettings can work without a physical premises, financial barriers to entry are diminishing. Agents can now opt to have a traditionally run high-street branch for between £20,000 and £100,000 while brokers can choose to start remotely without making any upfront investment at all in some cases, all under the comfort blanket of a franchise – many owned by the same parent company.
The role of an office does give off a sense of security, credibility and longevity, says Century 21 franchisee, Dan Pennington, but others have always championed the remote working model, even before the pandemic.
Meyers Estate Agents was launched seven years ago and now has 11 franchisees across Dorset and Hampshire. CEO, Mark Meyer, says: “We believe that the traditional high street estate agency location is no longer necessary. With no high street location, overheads are reduced. Our franchisees work from home and savings are redeployed on better digital marketing and ‘going the extra mile’ for customers, to achieve a higher price and faster sale for clients.”
We talk about what success is with each Partner – this may be to hit a certain financial target, or it might be to work around children and live a happy life. Paul Clarke, Director, Meyers.
London-based agent, Harding Green, has only just launched its franchise model and has opted for the middle ground – one office based ‘partner’ per prime location who will then build a team of self-employed ‘brokers’ around them.
“We have taken the decision to create ‘partner offices’, and in doing so, will be creating wealth and equity for our franchisees,” says Nick Carter, Founder and CEO. “We are in effect giving up equity, providing the brand, administration and support whilst allowing agents at the peak of their careers to launch a broker model of their own, in turn creating a tradable asset which could grow significantly in value and be sold at any point.” In this instance, franchisees will have an office base, but low overheads of no staff and the flexibility to work when they want. Helping to level this playing field is the changing buying habits of consumers.
Ben Littlewood comments, “The major change over the last 10 years has been a growing acceptance from homeowners that an agent without a high street branch can still be a great estate agent. In fact, they might even be a better, more forward-thinking and dynamic.”
Nick Neill agrees but believes that Covid has been the major influencer. “COVID-19 lockdowns have underpinned EweMove’s belief and experience that the key driver for success in this market is the people on the ground – the franchisees who become trusted partners of their seller and landlord customers,” says Nick. “It’s the criticality of this relationship that matters, not the location from which the franchisee trades, be it working from home, a serviced office or high street shop.”
Flexible models for personal goals
Personal goals have also been revisited. Some agents aren’t content with going back to the office and would even sacrifice earnings in return for a better work life balance. Mark Meyer comments: “For our franchisees, the agency is set up so they can achieve a better work life balance. Whether it’s the school run or taking the dogs for a walk, franchisees fit their working hours around whatever else matters to them. “It can be a particularly rewarding career and for some of our franchisees, success means they can earn a very healthy income working on a part time basis. For our more ambitious franchisees, some are now running huge businesses from home.”
Mr and Mrs Clarke, which was set up at the start of the pandemic and already has 15 franchisees in the network, also focuses on helping their agents achieve a lifestyle as well as a living. Director, Paul Clarke, says, “We talk about what success is with each Partner when they start – this may be to hit a certain financial target, or it might be to work around children and live a happy life. The ‘why’ of our Partners is more important than KPIs that we set.” In fact, Paul and his wife and co-founder, Alex, don’t come from an agency background themselves, proving that it’s not just skill and experience that franchising works for.
Although some of our franchisees are ex-agents, we have trained an ex-hairdresser and firefighter to become successful franchised home-based agents. Mark Meyer, CEO, Clarke.
No experience necessary?
While some property franchises are very particular in their franchisee credentials, Meyers feels the industry is missing a trick – quite apt since there appears to be recruitment crisis from within the sector. “It might be controversial, but we believe there really is no need for previous experience to become a franchised estate agent as the necessary skills can be acquired through our training programme,” says Mark.
“Although some of our franchisees are ex-traditional estate agents, we have trained an ex-hairdresser and firefighter to become successful franchised home-based agents. We use a proven and detailed 21 step process which is more about overcoming obstacles rather than selling. We also provide training on marketing, virtual viewings, social media and all the aspects needed to run a successful home-based agency.”
EweMove only stared recruiting franchisees from within the industry in 2017, before focussing on bringing in capable professionals with different backgrounds. TPFG has a high proportion of franchisees with no experience, and Century 21 only require those taking on their new Solo model to have one year also.
However, Neil McDonald, Partner at Town and Country, would ‘think very carefully’ about welcoming anyone to its auction franchise without an established background. “The ideal franchisee or licence holder would be an established, motivated multi-branch estate or letting agent with a passion for auctions,” comments Neil. Even the firm’s new ‘fast, no fuss and free’ model is designed to attract only top property professionals.
Neil adds, “Our new offer of no set up costs is designed to attract only the highest calibre of agent. We are essentially willing to invest our own capital to set the right agent up. We know we have a superb model and brand and with the right agent, can offer a first-class auction solution for clients with significant cross sales opportunities and financial benefits for the operator.”
For anyone entering or operating in the property sector, they do so for the buzz and enjoyment that comes from the sale or let – getting that deal over the line. In the independent world, you may have limited resources and have to wear several hats. In the corporate one, as you take steps up the career ladder, while actually doing less of what you love. And with so many flexible and affordable franchise options now available, there’s sure to be one that ticks the boxes.
THE POWER OF PROTECH
There’s been an explosion of software products coming to the market of late, and in particular, big investment in live streaming software for auctioneers. Town and Country’s Neil McDonald accelerated the franchise’s use of technology during the pandemic to facilitate the virtual auction sales and intends to continue embracing these changes, even committing to creating a ‘state-of-the-art’ website. Although he remains convinced that “service will always be a main driver for clients whatever technological development we see in the future.”
The other proptech solutions claiming to save agents time and increase revenue through streamlined and digital processes, are still lacking though, says Harding Green’s Nick Carter. “Every database has its strengths, but none are perfect,” comments Nick. “The market is saturated making it a little frustrating when it comes to knowing which one to pick, and even then, you always wish it would do something differently.”
Nick revealed that the company is even considering building their own in-house software in the future – something which supports agents on the sales and lettings side, but also the franchising side, showing their achieved and projected income. It seems this is a growing trend in the sector.
We have taken the decision to create ‘partner offices’ … in doing so we are in effect giving up equity, providing the brand, administration and support. Nick Carter, Founder & CEO, Harding Green.
Both the Moveli and Mr and Mrs Clarke franchises are actively developing mobile tech that will allow broker-style agents to work remotely all of the time, without even a laptop. Earlier this year, Century 21 was the first agency to white-label the Moovshack app which allows continuous communication with clients throughout the entire property transaction. The group is also covering the cost for its franchisees for the first two years. Gnomen is one proptech provider which provides a platform so you can create your own franchise, to duplicate your own success for others. The firm, which has over 800 clients, offers estate and letting agents an all-encompassing platform that gives them everything they need under one cloud-based roof – and with an a la carte modular menu, you can extend as your grow, or rather, your franchisees can. The property sales, marketing and management tool covers most bases and if it doesn’t, it integrates with another platform that does – and removes the need for any duplicate data entry. Property website design is part of the offering.