All 180 franchisees of the lettings chain Martin & Co have been sent letters inviting them to take out an additional franchise in estate agency sales – for just £1.
The price is an enormous discount from the £4,000 at which Martin & Co values each franchise.
The letter warns: “If we do not offer an estate agency service then we risk a mass exodus of stock when the market improves.”
The letter is from Martin & Co boss Ian Wilson, who says: “I ran a lettings business in Sutton in Surrey in 1996/97 for GA Property Services and we lost one-third of our portfolio in 12 months because the price of flats shot up and reluctant landlords off-loaded.
“It’s true that these days the buyers would probably be investors as well as first-time buyers, but the principle remains that it’s the estate agent who sells the flat who will get the lettings instruction.”
In his letter, Wilson tells the franchisees: “We currently manage over 26,000 properties. The UK average house price is £163,000. This means we are sitting on £4.238bn worth of stock.
“It’s currently worth £0 to us in sale fees.
“If, however, we offered an estate agency service under the Martin & Co brand, this stock could be worth £53m to franchise owners in sales fees.”
Wilson, who made known his desire to go into sales when he said he would have been interested in purchasing Bairstow Eves from Countrywide but was never given the chance, outlines some compelling reasons for the lettings chain to go into sales.
He said that franchise owners used to be told to ‘buddy’ up to local estate agents. In return for passing sales leads on to estate agents, the agents would pass letting leads back to Martin & Co.
Now, says Wilson, things have changed, because so many estate agents have gone into lettings. “If you pass a sales lead to an estate agent nowadays, they will list it, fail to sell it, and persuade the owner to use their lettings department.”
He also says that estate agency is a very cyclical business, and he expresses no fears about launching into sales during a downturn: “If we started our estate agency business in the poor years and learned our trade, then we could do very well when the volume of transactions picks up again.”
Currently, Martin & Co’s strapline brands it as ‘The UK’s No 1 Letting Agent’. A creative agency is working on a new brand identity, the letter reveals.
The franchisees will pay just £1 for a Martin & Co estate agency licence as a one-off charge, although they could expect total entry costs of around £1,500.
This would include compulsory training courses; TPO membership; professional indemnity; new stationery (the franchisees would retain their existing fascias and car branding for the time being); For Sale and Sold boards; plus software in the form of Jupix upgrades.
The franchisees are being told there is no compulsion to go into estate agency, whilst franchisees who have already branched into estate agency under a separate brand will be given an undertaking that their businesses will not be undermined by selling a Martin & Co estate agency franchise in their areas.
In his letter, Wilson acknowledges possible problems: “If we divert our attention towards winning estate agency instructions which are over-priced and where the owner is not motivated to sell and will not consider lettings as an alternative route, then we will damage our business.
“We must remain first and foremost a letting agent, using estate agency to gain a tactical advantage in current market conditions.
“Banks regard estate agency as a toxic activity and will not provide start-up or expansion funding.”
Meetings are to be held regionally this week and next to discuss Martin & Co’s move into estate agency, which follows 15 years as a lettings-only specialist.
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Comments
Richard, I understand where you're coming from now (at least I think I do). You simply don't "get" why anyone would want to buy a franchise at all.
The point you miss (I think) is that buying a franchise is not necessarily about buying a brand - although that is sometimes a part of it. It is about buying the skills, experience, knowledge and support of the franchisor who (if they are a good franchisor) will assist you in learning your trade and developing your business every step of the way.
When I started (from scratch) in 2003 my CV would have told you that I was a hard-wrorking articulate and ambitious sort of chap with a proven track record in selling telecoms solutions to SMEs. Whilst those are all valuable transferable skills do you really think starting a lettings business is so easy that those skills alone would have been enough to make a success of it?
I like slightly off-the-wall analogies sometimes, so how about:
Asking why I need Martin & Co when I've built a successful lettings business is a bit like asking why I use Head and Shoulders but don't have dandruff.
Steve- sorry you actually support my arguement but slightly missing my poiint.
Why did you use their name in the first place, it is your own skill that has created what the barnd stands for in our area now, not them? I accept if you move into sales now you are probably stuck, but you didn't need to pay for another name when you fist openned, you seem far better than that.
Good luck in what ever choose to do in the future, I rather think you will win.
Richard - I'm afraid I don't understand your point. You ask "why pay Martin & Co fees for estate agency when the name isn' t an established estate agent?"
That would be a fair question if I was just setting up from scratch - I agree that its not immediately obvious why a new entrant to the brand would want to buy and cold start an estate agency franchise from Martin & Co.
However, in my case I have an established and profitable Martin & Co lettings business with two high street Martin & Co branded offices, 14 staff (several of whom have worked in estate agency - including the managers of both offices). I have Martin & Co branded Mini Coopers running around the city. I have the necessary IT and telecoms systems, and a client list of many hundreds of current landlords who may want to sell their current property or buy more. I refer business elsewhere every week from people who either want to buy or sell a house.
Sales is undoubtedly different to lettings - someone either on this thread or elsewhere compared it to the difference between selling cars and maintaining them, pointing out that you wouldn't ask a car salesman to fix your car, or the mechanic to sell it for you. Fair point but most garages seem to cope with having aboth showroom and a workshop without too much difficulty.
I have a funny feeling I might just have got down off the fence . . . . .
Martin and Co. a name the public isn't aware of? Next you will be saying the Battersea Power Station is something more than bricks :-)
Steve- sorry to offend, not my intention.
Agree on your reverse of agents into lettings, not in my opinion good or for many sustainable. But I stand by my point, why pay anyone your fees for using a name which means nothing to the public anyway. You are the business, not them. Now if you were selling burgers yep.
I am not a competitor of either Agents ot Lettings, just my open views. You appear better than this from your reasoned argument.
Those were two of Oliver's less well considered Tweets, being reminded of them will keep his feet on the ground and thus see that Jupix goes from strength to strength
I hope my sparring partner Industry Observer will forgive me for being a litttle late to this debate.
To be honest there's not much more to add. There's been some decent arguments both for and against.
I'm a Martin & Co franchisee who is genuinely on the fence and waiing for full details from Martin & Co UK before deciding which way to go.
Perhaps I should ask "Richard" who commented on here for his advice as apparently me and my fellow franchisees have no business acumen or real world property experience. Personally I make it a rule never to underestimate my competitors, but then, what would I know?
The self-same Richard also thinks its a disgrace that anyone without experience (including, in this context specialist letting agents) can set up as an estate agent. I trust that he also feels the same in reverse (i.e. about estate agents setting up a lettings department. If not, why not?
And how is this to do with m&c?!
@roger alder
Have you been on your social media training? Better not have any slip-ups. I know a few guys that could teach you the value of social media's ROI. You'll soon learn that being yourself is key even if you trip along the way. To err is human afterall.
No you've got that dead wrong cheap crap, he's Harry Enfields 'Loadsamoney'
@Roger Alder - Are you referring the estate agency industry's answer to Gerald Ratner?
Sounds like a load of children arguing about a their right to a particular piece of the pie.
I don't think that the property business is built on ethical foundations and not too deep down you'll agree. Sales and lettings are full of hidden costs for something that isn't really worth the money that's charged.
I think if M&CO are challenging with low prices for sales you're all within your rights to spread fear and loathing about their ability to provide such services but lets see you do better with competitive pricing. Maybe you'll find your 4x4 or convertable too expensive to run when you're forced to drop your prices to play fair in the market.
Finally, fair play to Jupix for getting their free advertising here too. Maybe they should hike their prices up to match the velocity of the 'Admin Fees' that the public get stung with day-to-day.
Wishing you all a lovely day.
pnce again even £1 is far to much to pay for someone elses name plus a %tage of profits etc. If you are good and believe in yourself do it on your own anf reap the full benefits.
Fun Boy Agent, are you still at school ? you come across as being about 14 years old.
From a training and knowledge perspective; I think it is easier for a letting agent to go into sales than fron a sales agent to start doing lettings. (And every sales agent has tried to get into lettings, so they should expect a bit of action in the other direction.)
MAC have good reason to do so: They already have a relationship with landlords who at some point will want to add to, or dispose of property. They also have a lot of customers (tenants) who will want to buy one day.
If they focus on investment property / FTB initially, they should build some confidence, market share and credibility.
This is no overnight revolution, but a really sensible medium term way to build the business.
I know Ian Wilson and he is nobody's fool. + Richard Martin is still in the background. - They are motivated to build their business and are prepared to invest to do so.
Compare with Belvoir, where Mike Goddard has cashed in sufficient shares to keep his castle heated and left a very average management team in place to continue playing catch up.
Good god,
Its getting a bit punchy isn’t it lads? Now I like a bit of fistycuffs as much as the next man but come on.
There has been a boom in lettings and some sales EA’s have taken advantage and switched to the ‘other side’, some just couldn’t cut it in sales with it being so hard and all that so got letting jobs and some firms have seen a shift in the % of lettings to sales where lettings make up more of the profits than it once did.
The thing about this article is that Martin & Co have identified a possible flaw by not being able to service the sales needs of their own landlords and as any EA on the high street with one drop of business sense has a lettings business as well they are potentially going to be feeding the competition if they don’t offer sales……………..seems fair enough to me, now lets all have a drink and calm down a bit eh?
Jonnie
No, No, Spartacus, look again...
Mr Mac Franchise OWNS a lettings manager and a lettings negotiator. Through his OWNERSHIP of these highly experienced individuals he can demonstrate 25 years of sales experience.
They cannot leave, they are slaves. They were very good sales agents, both earning over £75k pa. Mr Mac got them at a bargain price. They felt they would rather work for Makky boy for £16k pa in lettings (with all its grief) than continue a sales career.
We Sales EA's must fear Mac and his mates. very dangerous!
@MAC FRANCHISE
If you where that good you wouldnt need to have bought a franchise in the first place.
I am a Martin & Co Franchisee.
Some comments from some estate agents say that the MAC lettings staff are not up to speed with the sales market.....Just to kill off this huge inaccurate statement, my lettings manager and my negotiator alone have over 25 years experience in the sales market, more experience than quite often the combined experience of some sales offices. So a message to all of you that think we are no threat ....do us the favour and just keep thinking that way!!!. Just think 180 new estate agents in the market over night...Why would any one of you be worried eh!
Doubtless me old mucker and one time friend Steve from Leicester will put up a spirited counter argument to each of the following comments, but here goes.
The letter warns: “If we do not offer an estate agency service then we risk a mass exodus of stock when the market improves.”
Why – does M&Co only deal with ‘forced landlords’?
The letter is from Martin & Co boss Ian Wilson, who says: “I ran a lettings business in Sutton in Surrey in 1996/97 for GA Property Services and we lost one-third of our portfolio in 12 months because the price of flats shot up and reluctant landlords off-loaded.
Exactly – too many reluctant Landlords on the books. But at least now we know Ian Wilson’s lettings experience is 2 months, December 1996 and January 1997. Or being charitable maybe it is a year!!!
“In his letter, Wilson tells the franchisees: “We currently manage over 26,000 properties. The UK average house price is £163,000. This means we are sitting on £4.238bn worth of stock.”
Amazing what you can do with simple maths – and not worth zero if you have cultivated those ‘buddy up’ relationships referred to below so you got a nice little referral fee from the estate agent.
“He said that franchise owners used to be told to ‘buddy’ up to local estate agents. In return for passing sales leads on to estate agents, the agents would pass letting leads back to Martin & Co.”
This is so passé most lettings agents stopped doing this years ago.
“If, however, we offered an estate agency service under the Martin & Co brand, this stock could be worth £53m to franchise owners in sales fees.”
What a load of baloney - except for the word “could”
“Wilson, who made known his desire to go into sales when he said he would have been interested in purchasing Bairstow Eves from Countrywide but was never given the chance,”
Exactly and I wonder why that desire was not taken seriously. But M&Co have been into estate agency many years ago, though admittedly before Ian Wilson’s time.
“He also says that estate agency is a very cyclical business, and he expresses no fears about launching into sales during a downturn: “If we started our estate agency business in the poor years and learned our trade, then we could do very well when the volume of transactions picks up again.”
Brave man – or foolish.
Currently, Martin & Co’s strapline brands it as ‘The UK’s No 1 Letting Agent’.
Why no ASA challenge yet?
“We must remain first and foremost a letting agent, using estate agency to gain a tactical advantage in current market conditions.
So a half hearted attempt at estate agency to support lettings then? Or maybe just the reverse of what estates agents now in lettings have done?
“Banks regard estate agency as a toxic activity and will not provide start-up or expansion funding.”
Amazed no estate agent has yet posted taking offence at this comment!!
Can't we blame this on Rightmove?
£1? Expensive at that.
Shows how lacking in business acumen and real property experience these franchisees must be.
It also shows how the lack of regulation just means anyone without any experience can act as an agent and advise people on selling what is for most, the biggest asset they will ever own. Has to be wrong.
James (comment below) suggests Letting Agents nick estate agents stock, sell very little of it but spoil it for committed estate agents.
I'm not surprised. Estate Agents have been nicking our stock, letting very little of it but spoiling it for committed letting agents ever since the sales market went belly up.
Excuse me Kettle, Estate Agents dipping into Lettings and Management? Funny!
No doubt their income from lettings will cover the cost of running their existing business
They will only need a RM subscription and new letter heads etc and away they go
Lettings agents in this area who have turned to sales tend to do it on the cheap, pinch loads of stock and sell very little, but spoil it for the committed sales agents
Lets wait and see, but this was inevitable
at least he can spell!
SMARTagent on 2012-02-27 09:03:51
Odd, I thought the total value of stock based on those volumes and values should be £4.238 billion? Maybe the cost to franchisees has also been miscalculated. In a world where specialisation is increasingly important, a jack of all trades approach usually ends in someone's tears.
Read the text and do the maths
£4.238 Billion potential sales at 1.25% commission is potential income to the franchisees of £53,000,000.
The 1.25% wasn't quoted but I have a GCSE maths so could transpose the formula. Another reason this is a good idea is that some of the competion is a bit thick?
The fact that the Jupix software does both sales and Lettings in the same system means that it would be daft not to use functionality that is at the agent's finger tips, especially if it turns the tide against the agents who since 2007 haven't had many sleepless nights or concerns over whether it is right to horn in on Martin and Co's core business.
This is a smart move from a smart business man, Well done Ian.
Oh look , someone else mentioned Jupix. ( Just to join in the Sport du Jour)
This seems to be a money making ploy by the owners of Martin & Co. The Lettings business is highly lucrative at present, and there is no end in sight for a turn around in the market for more sales. Quite the opposite in fact. The Franchisees would be better advised to concentrate their efforts and maintaining their status on being top of the lettings field without distraction. Its also a highly competitive business world out there with many players in the market .
Good luck to the lattings experts who go into sales also. Room for another little one, roll over, roll over.
My word of advice as follows (not that I am a guru).
The only similarity between the two functions of sales and lettings is 'property'. It is like (I use them as examples a lot) car dealerships. Sales function, maintenance function.
If your car breaks down you wouldn't go see the salesman, if you want to buy a car from a showroom you wouldn't expect a chap in overalls to come and talk to you.
Building a sales pipeline takes a long time and a costs a lot of advertising money to create. The work you do today is an investment for 4 months hence. I doubt it will be £1500 investment , it will be much, much more than that. Beware.
Good luck to all of you, whatever you do!
Hans Langsdorf did not go down on the Graf Spee but did die as a result of the scuttling.
Please put it back Ros,
It is nice to see that someone is annoyed enough to post
"Trolls"
"Wake up and smell the coffee" If you want to be "the Whitbread of the software world" and "own the desktop" learn how to treat your customers, learn how to treat your staff but also have a bit of respect for your competition.
Oh so it is alright for someone to troll positive Jupix stories eg the one about Jupix beating GMG in last years ESTA supplier of the year award, but its not alright when anyone says anything against GMG, strange!
Maybe if they/you were still spending a shed load of cash with EAT they/you could get Ros to delete the posts that offend them/you.
P.S Did you like how I got another plug in for Jupix? (probably not, probably upset your ulcer)
P.P.S Actually Jupix (NB another mention of Jupix Ltd in Brackley, perveyors of GMG replacing software) have got two ex-GMG's trainers working for them. The very tall and good looking Mark (the ladies love)Bevan works there along side his old boss.
The funny thing about Jupix is that they never spend anything on advertising. I suppose they must have good software! Contact them on 08000 75 87 49 to see for yourself
Well "Just a Thought" your in for a shock then if you are in the indusdry
@Jupix Upgrades.
Don't give GMG the credit (or satisfaction) for getting rid of some very capable staff. Yes they got rid of the testing staff, but it was the inevitable consequence and repercussion s of that which was behind some of the others deciding to leave of their own accord.
I spoke with Mark D the other day, he is fine and working part time for them. The biggest irony is he is doing some of the work the testers used to do, he looks after compliance and functionality that doesn’t work quite as it should.
The other irony is that one of the senior trainers who left (Bev Stroud) is now working for…….. Jupix, but perhaps you knew that ;-) ?
Wasn't it Martin & Co that quite loudly shouted about "how they are so great because they specialise in Lettings.. and Lettings only"!?
Good luck to them though. I know most of their staff aren't very clued up when it comes to the sales side so I'm sure a lot of investment will have to go into training and systems.
:-)
Odd, I thought the total value of stock based on those volumes and values should be £4.238 billion? Maybe the cost to franchisees has also been miscalculated. In a world where specialisation is increasingly important, a jack of all trades approach usually ends in someone's tears.
An interesting and realtively low risk move - given the lack of actual stock moving in sales market place at present.
Will be interesting to see how the rebrand is acheived
Will be interesting to see if Belvoir follow suit and what impact on share price for them
Where is the astonished Smiley when you need it?
What is all that about then? Martin and Co use CFP!
Last week there was a story about Arun Estates switching to LetMC CFP.
Perhaps it wasn't such a good idea to get rid of; all the Testing staff, the Head of support, the General Manager, the best 3 trainers in the business, the training manager, the Sales Director and goodness knows what has happened to the MD
Convinced by reports of superior competition Hans Langsdorff, commander of the Graf Spee, ordered the ship to be scuttled. Langsdorff went down with his ship.