Corporate giants reduced to mass redundancies, closures and scaling down of their operations. And many small independents, not all I hasten to add, are simply treading water.
If you were only looking one way down the crossroads, the future for estate agency is looking bleaker than a UK singer’s hopes of success in the next Eurovision Song contest.
But the industry isn’t dying, it’s just changing.
And leading that change is the estate agency franchising model. Just look at the last round of annual financial reports from the big franchising companies.
The Property Franchise Group, of which EweMove is part of, returned strong numbers despite the current economic and political climate. As in fairness, did the other big players in this sector.
Buy why are estate agency franchises succeeding when other models in the industry struggling? I believe it’s down to five fundamental factors that enable hard working franchisees to succeed.
1) Cost – Simply by applying economies of scale, franchisees save thanks to the franchisor’s buying power. Setting up an independent estate agency from scratch is very expensive, especially when compared to investing in a franchise.
Corporates are often burdened by expensive premises and bloated staff rosters which hits them hard when the market gets tough.
2) Motivation – Good office managers, senior valuers and negotiators are often wasted within corporate structures. That sense of frustration for not being recognised or suitably financially rewarded, quite understandably, gnaws away at motivation levels.
Franchisees haven’t just bought a job they’ve backed themselves to succeed and that leap of faith is often accompanied by a surge in drive and focus which leads to winning more instructions.
3) Money – Most franchise models are geared up so that the franchisee takes a far bigger cut of any sales commission than they would if they were working for a company as an employee.
This drives up the levels of client care and service which feeds into the cycle of success by winning more instructions via referrals because of those high standards.
4) Expertise – A good franchisor offers a team of experts across numerous aspects of running an agency including marketing, finance, compliance, HR, operations best practice and software systems. And this support team allows good, experienced agents to focus solely on what they are best at and that’s meeting vendors and landlords, sharing their expertise and winning instructions.
Rather than getting bogged down in general business functional tasks that would normally sap sales productivity.
5) Freedom – An often-underrated benefit of franchising is being your own boss but with the support umbrella mentioned above. Franchisees ultimately march to their own tune, albeit with backing music from their franchisor.
This newfound freedom is a reinvigorating factor for experienced agents who have spent years under the watch of a regional or national agency. Ultimately it means being your own boss, setting your own schedule and building your own business.
I strongly believe there is far more financial security in being a franchisee than there is being an employee. You may quite fairly think ‘well he would say that wouldn’t he? He’s the boss of a franchise company.’
But just five years ago I set up as a franchisee with EweMove after a successful career in the corporate world. I saw back then that being part of a franchise would give me a much better chance of building a successful agency.
In June 2017 I took over at the helm of EweMove. My franchise is still going strong and now run by my wife. So, yes I am biased when it comes to estate agency franchises. But it’s not blind faith, it’s because I know from personal experience that it works.
I see our best franchisees who have taken a leap of faith earning great money which reflects their true worth. And I see the direction the industry is taking as franchise companies continue to buck the current financial trends.
I can’t see a bright future for most online only agencies or large corporates. But I can a see a prosperous future for quality independents. And I see a very bright, opportunity filled future for franchises and their franchisees.
To see a copy of EweMove’s Estate Agency is Changing - Are You Ready? guide, email: email@example.com or Call 01274 888 788
*Nick Neill is Managing Director of EweMove