“Property trend watchers are now almost universally in favour of the franchise system being used to market and sell residential property,” says Tony Clarke, Managing Director of the Rawson Property Group.
“The advantages of the franchising system are now there for all to see,” he added, “and it tends to attract a more independent, more motivated and more skilled individual than the average employer/employee system can produce - and the new breed of franchisee in the industry has taken the property market to new levels of professionalism and success.”
The respected South African economist, Mike Schüssler, speaking recently at the release of the small and medium enterprises (SME) index for South Africa, compiled by the Absa Group, said that franchises are, it seems, able to stay in business longer than other enterprises. Eighty percent of new start-ups in South Africa, said Schüssler, last less than five years.
According to Schüssler, in 2012 707,000 people were employed by South African franchises and the average franchise had 17 people working for it – which is 36% higher than the figure for business in general and 62% higher if one discounts the mining and utilities sectors.
Absa, said Schüssler, is now giving businesses run on the franchise system a lower risk rating than general businesses in South Africa.
“These statements from Mr Schüssler,” said Clarke, “appear to confirm what we have been saying from the start at the Rawson Property Group, which is that franchise operations have a higher success rate than non-franchise operations.”
The Rawson Property Group, said Clarke, has succeeded solely and exclusively on the franchise model because:
a. We believe that for franchising to be successful, the group’s management should be focused on this and this alone, and
b. We believe that where a group operates with both branches and franchises, the branches will, to an extent, benefit from fairly large sums of money paid in by franchises towards corporate advertising, promotions, training and the development of systems – and this is not fair to the franchises.
“Much of the remaining scepticism about franchising in the property sector,” said Clarke, “is, I believe, the result of certain groups cashing in on the system but not providing adequate support to their franchises. They give them very few systems, minimal training and very little corporate advertising. Where a franchise is given 24/7 support, as is done by the Rawson Property Group and many similar groups, they will tend to function well. This support is particularly important in the first year of the franchise’s operation.”
