‘Franchised branches performing better than head office operated ones’

Paul Hardy has been at the helm of the LSL sales and lettings businesses during a turbulent time for the company, to put it mildly.

He’s helped move it to an entirely franchised model and played a part in selling off Marsh & Parsons to rival Dexters for £29 million.

But his next big job is, almost a year to the day since he kicked off the franchising changeover, to grow it – he tells The Neg.

Changing over to a franchised model was no small beer – he oversaw and helped plan the move from an almost wholly company-owned network of agent branches to one of 61 franchisees operating in 308 territories.

“It’s been a busy 12 months,” he says. “We’ve had to transfer a lot things over to the now franchised operations and spent a lot of time getting things bedded down. But a year down the line, our focus is now very much on growth.”

Growth

By growth, Hardy means helping existing franchisees grow market share but also find new people with solid estate agency backgrounds to set up new franchisees for its existing brands. He also says there will be ‘head office’ financial support for franchisees who want to buy local competitors or lettings books.

“The way we’ve structured the franchise businesses means they appeal to entrepreneurial people because, as well as running their own enterprises free of ‘head office’ constraints, they have some skin in the game in the form of equity,” he says.

“And we wanted to ensure that as many people as possible in terms of management have that skin in the game and not just the lead franchise partners.

Contingent

“That was contingent as part of the contracts we signed when the businesses were transferred over. There has to be long term value for both the staff in the branches, the franchisees and us, the franchisor – and I believe we’ve managed to achieve that with the model we have implemented.”

But LSL is not alone in embracing the franchise model – many other competitors including Belvoir and TPFG (recently merged) have also put it at the centre of their agency businesses.

Hardy explains that, when you have big firms like LSL which cover mortgages, surveying, conveyancing, lettings, sales and often much more, it’s all about simplifying the business model.

“There has to be long term value for both the staff in the branches, the franchisees and us, the franchisor

“For franchisees, it brings the best of both worlds because franchisees are one step away from being independent agents, but can operator under a well-known brand name,” he says.

“They also get the corresponding marketing and IT systems support and expertise that means we can offer a ‘business in a box’.”

Pondering why has franchising has now taken off within the industry, Hardy adds that: “operating as an employee and manager within a large corporate environment becomes quite onerous because decision making is slow.

“What a franchisee wants is to be left alone to run their business but also have us provide a  good service and a great proposition including deals on tech and revenue streams including referral commissions particularly from our mortgage broking business Primus, because of our scale.”

Key test

Hardy says one key test for the franchise changeover has been passed – namely that the businesses are trading better and more efficiently than they did under direct LSL control and ownership.

“Some are doing better than others, but all our franchisees are ahead year-on-year and several are ahead of the market so it’s going to be exciting times as we develop all that,” he says.

Paul Hardy – bio

Hardy has been at LSL 31 years, joining General Accident as it then was in 1993. He became Your Move’s Finance Director in 2008 and then Finance Director of the Estate Agency Division in 2015.

On the retirement of fellow director Helen Buck (pictured) in April last year, he was promoted to her role and now heads up LSL’s overall franchised estate agency business which includes Your Move, Reeds Rains and eight other smaller agency businesses.

Find out more about LSL’s franchised agency offering.