A Way into the Property Market
Recently there has been an up surge in the franchising of estate agency branches, so why do so many people look at franchising as the way to get their foot into property. There are many benefits that are apparent for both the franchisor and the franchisee, if we begin by looking at the franchisor these are fairly self explanatory. The major benefits are that it allows them to accelerate the brand into the market place and get very fast expansion into new markets with very little risk. If the franchise is successful then it is a very easy way to obtain an increase in revenue for very little outlay. Not only this, but it is a very low cost to the franchisor that enables the rapid roll out of many franchises in a short space of time. Positively anyone who has invested money into a business will be keen to succeed; therefore it is more likely that the franchised branch will have a good chance to succeed with a motivated franchisee.
Benefits of a real estate franchise
If you are a franchisee then you will be of the many benefits, if you are looking to become one then you will be interested to learn. Franchises can a convenient way to start a business, the business that you buy into will no doubt be established and you will receive the guidance and support required for a start up. Within a franchise package you will be supplied with all the marketing materials and a proven business model. Within the business model will be other franchises and experienced people who can assist in making sure your business is a success. All of this may seem too good to be true and it is not all plain sailing, none of your customers will be aware that you are a small business especially if you are part of a country wide branch network. With this in mind all of the usual business factors still apply such as quality of service, brand differentiation and the burden of having to pay the monthly service charge. The surcharge can vary and often will be based on a percentage of the monthly gross income rather than a flat rate fee.
However franchising still remains very popular and provides an excellent way for people to get into an expensive market place. Many franchises have now become internet only which greatly reduces the overheads associated with the more traditional office style. The benefits of reduced costs can be of benefit to the business model and customers by being able to offer reduced rates on rent, smaller percentages on sales and great efficiency. The start-up costs of the franchises are also reduced, a traditional property franchise would be around £80,000 where as this can be reduced to less then £25.000 per branch. In the last 10 years alone there are estimated to be around 34,000 franchised branch offices, and out of those around 93% make a profit, goes to prove that there is money to be made for franchisees and franchisors if it is done correctly.
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