Interview with Bill Rawson, chairman of the Rawson Property Group, on the subject of franchising in property marketing.
Franchising has given the residential property market new ‘legs’, says Rawson Property Group Chairman.
SA Franchise Brands: Thank you for agreeing to be one of our interviewees. You were known at one stage to be not that enthusiastic about the whole idea of franchising residential property marketing. However today your group is a leading exponent of this system and you are now a total convert to it. What were the factors that most caused you to change your mind?
Bill Rawson: My initial reluctance to adopt franchising was based on the fear that it would destroy the family spirit in our group. We have now been operating for some 30 years and we had, on the whole successfully, sold property through branches and most of our branch managers and their senior staff saw themselves as members of a cohesive unified family group. Many were friends not only with myself and other directors but also with each other – and they liked it that way.
When we made the move into franchising we set up the whole system to try and preserve this family ambience and, I am grateful to say, we have by-and-large succeeded in doing this.
SA Franchise Brands: How did you manage that?
Bill Rawson: From an early stage we have appointed development managers in the three main regions from which we operate: Cape Town, Johannesburg and Durban. In addition we have a head office franchise expansion development manager. These people all have in-depth experience of property selling, most having been agents themselves at some stage, but they also know how we like to organize and structure our operations and they can advise the new franchisees on that. They are available 24 hours a day, seven days a week to support and help the new franchisees whenever they encounter a problem. Our experience is that in the first six months of a new franchisee’s life – possibly even longer – this support can make all the difference to a franchisee, helping them to come through the very difficult initial periods when their earnings are likely to be minimal and they are still possibly unknown in their territory.
SA Franchise Brands: What is your package offer to the new franchisee?
Bill Rawson: It includes, first and foremost, on-going training, not only for the franchisee himself but also for all members of his staff, some of whom may still have to qualify for the now compulsory Estate Agency Affairs Board’s NQF4 examination. The Rawson Property Group probably provides more training to its franchisees, agents and administrators than other real estate marketer – it is something we believe in totally.
The training comes in many shapes and guises – sales-related, legal and contract information, accounting, IT and other matters. IT is, in fact, very much part of the package today and includes the systems on which we like our franchisees to operate. These have the big advantage of simplifying the accounting and report back processes, thereby allowing the staff the maximum time to focus on the core activity of client cultivation and liaison. The systems also have the advantage of keeping the head office informed as to how the new operation is performing and of showing where things might be going wrong.
Every franchisee will to a greater or lesser extent also benefit from the group’s on-going advertising and promotional work and, more directly, from the referral network which enables them to pass on or take up clients to and from other areas, earning a fee in the process. The franchisee can also make available to his clients, our in-house bond origination service, Rawson Finance.
SA Franchise Brands: Do you find that the franchise offering attracts a ‘good type’?
Bill Rawson: The sort of person attracted to franchising is usually an independent, go-getter who is confident that he can shape his own future if given the chance to do so. In this respect he is, perhaps, sometimes a cut or two above the branch manager type who has worked his way up steadily from being an agent but still sees himself as an employee rather than an entrepreneur. However, having said that, it is also true that the vast majority of our first franchisees were former branch managers, almost all of whom have performed very well as franchisees.
Since the introduction of the new compulsory and stringent educational requirements, most new franchisees have already had experience. It is preferable for new franchisees these days to have already had property experience and if possible to have passed the necessary examinations. However, under the mentoring system, we can arrange for a new franchisee to work under the wing of a qualified person until he or she has qualified.
In general, apart from property experience (which may not always be that crucial), we like it if our franchisees have had exposure to business – they are, after all, now managing a business and some previous experience is essential.
SA Franchise Brands: What areas now offer the best opportunities to new franchisees?
Bill Rawson: Our goal is to have 400 franchises countrywide, covering all areas of South Africa. At the moment we are about halfway there, with just over 200 franchises. In the Greater Cape Town area we are well covered today but in Johannesburg, Tshwane and Durban, and of course the outlying areas, many good opportunities still abound. One has only to look at certain of the national groups to realize that the small country towns these days can support viable real estate agencies, e.g. in Mpumalanga or in the Karoo.
SA Franchise Brands: Are you limited to residential selling?
Bill Rawson: By no means: today we can offer franchises in commercial property, rentals and auctions. Some of the new operations here have proved surprisingly successful. Our Western Cape auction franchise, for example, is now very busy indeed.
SA Franchise Brands: Some property groups have managed to introduce franchising while still holding onto their better performing branches.
Bill Rawson: We have a problem with that concept. As we see it, the franchisee fee includes a big contribution towards advertising. If the branches benefit from that (as they will), this is not, in our view, fair to the franchisees. In general, however, we think being focused on franchising is the right way to go – we do not want to be distracted by branded operations.
SA Franchise Brands: Supposing the new franchisee is successful, what extra awards can he look forward to?
Bill Rawson: Successful franchisees tend either to take on extra franchises – for example our Blaauwberg franchisee is now also running a commercial franchise – or they can hive off part of their territory to be sold as a new sub-franchise, they being the prime beneficiaries from such sales. Alternatively, they can retire and sell their entire franchise once it has proved successful. There is no need to slog on into old age if he has created a successful franchise operation.