One benefit of running a franchise is that once you have proved to yourself that the system works and that the support is good, it is relatively low-risk to scale up, by acquiring other franchises and applying the same business principles that forged your earlier success.
Gary Everett is a case in point. Having run the Martin & Co franchise in Colchester for five years, the opportunity to acquire the neighbouring Ipswich franchise arose. Initially Gary had been looking to acquire competitor portfolios, but when he heard that the franchise itself was available he jumped at the opportunity without question. With it came the prized portfolio of 50 managed properties, and a good office location.
“The Ipswich acquisition is a classic economy of scale for my business,” said Gary. We have a thriving letting business in Colchester employing 10 support staff who have absorbed the accounts and management functions of the Ipswich operation into their office. The system is robust enough to input any number of cases, so the Ipswich office itself is effectively a low-cost satellite branch. Employing just two people at the branch makes it a very low cost yet well-exposed operation offering great personal service to anyone who walks through the door.”
“I see this approach to growth very much as the way forward. Lettings are currently thriving, with year on year growth. As property values fall, so the yields are effectively rising, and professional landlords are filling their boots – buying cheaply and letting quickly. We are seeing net returns of 7%-10% for many clients, so it’s a no-brainer for those with cash to invest (better than putting it in a bank, that’s for sure!). So I see a swing towards the larger scale landlord, which is exactly the type of client who appreciates the efficiency of our system, combined with the ability to speak to people who really have a deep understanding of the letting business. There are too many wannabe letting agents who just don’t cut the mustard, and you simply can’t entrust such a massive investment as a block of flats to someone who does lettings on the side,” he said.
Sharon Titchmarsh, formerly of Belvoir and Director of business brokerage Enable, and more recently employed as Portfolio Buyer at Countrywide Residential Lettings, has joined Martin & Co to develop the momentum for business acquisitions in 2009.
“It’s a busy market currently with many lettings businesses changing hands” commented Sharon. Martin & Co has access to substantial bank funding for expansion, so the year ahead is set to be an exciting time for the company. As well as specialist letting agencies our main opportunity is to acquire the letting portfolio of estate agents who are keen to add liquidity to their business during these turbulent times in the property market.
“My seven years experience in valuing and handling lettings business sales ensures that owners are getting a fair market price, and they can also rest easy knowing that their clients will be taken care of after the sale completes. As residential letting specialists with a well-proven franchise model, the company always has a dedicated team on hand to oversee a seamless transition”, Sharon continued.
Martin & Co grew its network revenue by 45% during 2008 and is confident of similar growth during 2009. Managing Director, Ian Wilson commented “Sharon is one of only a handful of experienced letting agency brokers operating in the UK, so we are privileged to secure her services. She understands the sensitivity of these transactions and the need for absolute confidentiality, along with a well-rehearsed process that gets the sale through quickly within minimal disruption”.
About the Author
Matthew Anderson is a franchise consultant and founder of The Franchise Shop, a UK business franchise directory featuring Estate Agency Franchises