This year, the Rawson Property Group expects to establish a further 38 new residential marketing franchises, in what they refer to as their Northern Region, i.e. all of South Africa except the Western and Eastern Cape andKZN. This means that by 2013 the Group will have in excess of 100 residential property franchises in this area.
“There is now an exceptionally strong demand for Rawson franchises,” says Chic Berkhout, the Rawson Property Group’s Northern Region Expansion Manager, “and the more we establish, the more the word gets around and the more demand grows. This is a business that appeals very much to the independent entrepreneurially minded person.”
Berkhout warned, however, that only one in perhaps 12 or 15 applicants is right for this sort of task and responsibility.
“Much the same guidelines that govern the National Credit Act and the Consumer Protection Act,” he said, “apply to the award of a franchise. We have to be responsible and take care that the applicant does not take on a commitment which might be costly or ruinous to him or which might tarnish our group’s reputation.”
It has to be appreciated, added Berkhout, that the actual cost of the franchise may be less than half the total sum required – because the new franchisee will need set-up costs and seven to eight months funding to see him through the initial no earnings period before the business starts to give returns and fees are paid.
“The mere fact that even once a sale has been achieved,” said Berkhout, “it may be as much as 24 weeks before the transfer is achieved and commissions are paid, is a major obstacle to any one with limited means wanting to go the property franchise route. However, it has been encouraging to find that there are still people in South Africa who do have the savings to tackle such a task.”
Berkhout added that some of their new franchisees are ‘conversions’ from independent agencies who now want to participate in being part of a major, well branded group. Others are ambitious, already qualified estate agents in other real estate companies who want to run their own businesses. The Rawson Property Group can, however, mentor rookies in their first year and help them to get the necessary NQF4 and NQF5 qualifications – so even those with no property experience are not necessarily debarred.
“It may surprise some people to know that the number one requirement for which we look,” said Berkhout, “is integrity. We are, to put it simply, looking for people who can be relied on to be honest at all times. As we all know, the estate agency sector’s image took a hammering last year but this has created a demand for squeaky clean enterprises – and I am glad to say that at this stage the Rawson Property Group fits into this perception.
A certain amount of previous business or real estate experience, said Berkhout, is valuable for an aspirant franchisee but, then again, the systems and training supplied by the Rawson Property Group will enable any, reasonably intelligent new franchisee to be successful and to develop his business rapidly in the first two years.
“Although we can be fairly discouraging to new applicants, especially if they see property as a quick road to riches and do not have the 24/7 work ethic, it can be said that the Rawson support system has resulted in a very high success rate. Countrywide, less than 15% of new start-up businesses survive, whereas up to 70% of new franchises become successful. However in the Rawson Property Group the failures are below 10% - and should a franchisee, after a certain period of time, decide that property selling is not for him, provided he has used our systems and stuck to our methods, we will always help him to sell his operation and recoup his costs.”
The Rawson Property Group’s goal, said Berkhout, is to have 400 residential branches up and running by mid-2015 – but at the present expansion rate this could well be achieved before the end of 2014. Residential property franchises, he said, will be complemented by franchises in the rapidly growing rental, commercial and auction divisions, all of which are expanding at present.
