Franchise Opportunities
under a trusted and well-known brand, especially at a time when people are making the most important financial decision of their lives. “In any business, reputation is everything,” he says. “But even more so in real estate. Real estate agents don’t always enjoy the best of reputations you know!
“Running your own business is a big step,” says Wright. “One thing to really consider is if you get along well with your franchisor as you’ll be working relatively closely for a significant portion of time and relying on them for support when you run into challenges.”
“Due diligence is the most important consideration when venturing into any sort of business relationship.” “I could see that the business had done all the hard work for me,” says Burgoyne. “Years of building the reputation of the brand, working with the real estate institutes to establish the brand as an industry leader – you could spend years trying to do that yourself and not get anywhere close.” Rault points also to the national television, radio and billboard advertising campaigns, which would normally be out of reach, but which are paid for by the company under the terms of his particular franchise agreement. The issue of brand integrity is a double-edged sword, say Burgoyne and Rault. Other franchisees building good reputations can add to the reputation of your business, but franchisees creating bad reputations can also reflect poorly on yours. That’s why, say Burgoyne and Rault, choosing a business that has a thorough and genuine dispute resolution mechanism is vital. One of the most important things to consider when choosing a franchise is the issue of territory, says Rault, which is so necessary in a reputationbased industry like real estate.
out of the woodwork.”), and currently owning a franchise operation of a company for which he has a lot of respect and which is flourishing financially. At 37 and having risen through the ranks of the real estate agent for which he worked, Rault felt it was time to go into business for himself. Around this time, he was contacted by Century 21 ‘franchise scouts’, who explained to him the benefits of buying a franchise, in particular theirs, and he hasn’t looked back. Terry Burgoyne, a Barry Plant franchise owner, had also reached a stage in his life when he wanted to branch out on his own, but unlike Rault, Burgoyne had already worked as an employee for Barry Plant for five years before he decided to buy a franchise. This provided him with an intimate knowledge of the workings of the organisation, and allowed him to see first hand, the advantages of operating
“Most franchises allow you to operate within a certain area,” he explains. “For real estate agents, that means they can only sell properties within particular suburbs. So, say someone has heard of my reputation and wants me to sell their property. Or, if my grandmother wanted me to sell her property. My franchise agreement says that you can sell where ever you like, but not all are like that.” Terry Burgoyne’s franchise also allows him to sell property anywhere and he says this is a reflection on a greater selling point of any franchise – a culture of cooperation. “There is a real culture of knowledge-sharing,” he explains. “That was really important to me.” “One of the biggest considerations for me,” he continues. “Was that the business had to offer excellent support and mentoring. I wanted to have access to the best people in the business – people with years of experience and proven success, who offer advice and training, and I wanted the franchise I chose to have that.” The Franchise Council of Australia agrees that a good relationship with the franchisor is vital.
For Rault, the size of the business was also an important consideration. “Century 21 is one of the largest franchises in the world, with around 250 offices in Australia alone,” says Rault. “For me that meant security.” Burgoyne advises, though, that size should be considered in context. “You can have a hundred franchises but if fifty of them are run by clowns, you’re in trouble.” Above all, says Wright, remember that a franchise is a business. “The most important thing to do when thinking of purchasing a franchise is not to let emotion rule your decision making,” he says. “Many people fall in love with a brand or a product and deduce that everything on the business side of things must be great for the company to produce such a brand/product. But this can be a trap. Due diligence is the most important consideration when venturing into any sort of business relationship.” Nothing replaces doing your homework, says Wright. “Full disclosure of company information is a big indicator of how a franchisor values potential and current franchisees. If you feel that you are not getting the full picture, do your own research or back away slowly.”
The Franchise Council of Australia has a checklist of questions that they recommend all real estate agents read before making the decision which franchise to choose, which includes asking the following questions: • What are the distinct advantages that one business has over another? • Has the franchised business been thoroughly proved in practice to be successful? • What is the market area and what is the health of that market area? • How competitive is the market area? • Is there a strong, distinctive trade name?
The Australian Real Estate Review
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