The South African residential property sector was recently surprised to learn that the Managing Director of Rawson Properties, Tony Clarke, will, in the year ahead, be focusing his attention on the growth of the Group through the sale of franchises in all sectors – residential, rental, commercial and auctioning – while his second in command, Sean McCauley, Executive Director of Rawson Properties, will focus on, to an extent, reducing the segregation of duties at the top level in the Group.
Discussing this change in the Group’s modus operandi recently, McCauley said that franchising has become ‘wildly popular’ and appeals to a wider and wider cross-section of the South African public, not least those who in the current economic conditions now find themselves redundant, often after many years of faithful service to big corporations and organisations; or are looking for an improved lifestyle, one which gives a better work/life balance, greater flexibility and much improved autonomy.
McCauley warned, however, that the last two years have shown very clearly that many applicants for Rawson (and other) franchises have a number of misconceptions about which they have to be rapidly disillusioned if they are to be allowed to purchase a franchise and if they are to make a success of it.
“Quite often,” said McCauley, “franchise applicants or, indeed, those seeking to become estate agents, assume that real estate will enable them to make money easily and to live a less arduous working life – one with shorter hours and plenty of free time. They have to have it explained to them that in estate agency work, at least 20% of your time is put in after the normal working day, e.g. in the evenings and over weekends – and they also have to be told that they have to be prepared to answer telephone calls and emails on a round-the-clock, 24/7 basis. This is the nature of the industry, due to the expectations of buyers and sellers.
“Then, too, they have to understand that, unlike running a dry cleaners or any retail business, in real estate there is minimal walk-in trade: the agent or franchisee has to get out there and find his own stock, his sellers and his buyers. Such irksome tasks as door-to-door canvassing, knock-and-drops, random telephoning and manning show houses are an essential part of the job.
“In addition, the potential new agent/franchisee has to accept that he will almost certainly need educating. No amount of negotiating ability or sales skills will compensate for a basic lack of property knowledge, an inability to draw up an accurate valuation, ignorance of property law and/or a lack of information on how property finance works. All this has to be learned and in today’s dispensation, spending several hundred hours on preparing for the NQF4 and NQF5 examinations is also a very necessary part of the deal.”
“The new agent or trainee franchisee has for at least one year to be a very willing pupil.”
McCauley added that today’s tough economy is, ironically, leading to growth in property franchising, not only as indicated because more people are now jobless and looking for a new means of supporting themselves, but also because many of the smaller agencies increasingly appreciate the advantages of linking in with a big brand which will give them credibility in the market, a nationwide referral system, ongoing advertising back-up, good management, accounting, report-back systems and sound advice, again on a round-the-clock basis – as well as regular training.
“The value of this support,” said McCauley, “cannot be overestimated. It can and does often make the difference between an almost successful operation and one which really is successful and takes off. I would even go so far as to say that in all the major groups which provide ongoing franchise support, it is almost always the reluctance on the part of the franchisee to stick to the tried and tested systems that leads to their failure. Thankfully very few do indeed fail.”
McCauley commented that the potential for franchisees serving black areas is especially good at the moment because there is a growing appreciation in these areas of the wealth creation potential in property ownership and a desire to provide for their children; and because the black areas have often been served by agents operating illegally, i.e. without Fidelity Fund Certificates, and with minimal training.
