Quality Franchise

Should you buy a resale estate agency or build upon a quality franchise opportunity?

Go cheap and go home? We explore whether you should pay a premium or take a risk.

A resale estate agency will have an existing customer base with its own cash flow. However, a quality franchise will be the cheaper option. There’s not necessarily a right or wrong answer. It will all depend on your situation. If you have the budget, a resale estate agency business would make sense to take over. However, you would have to pay a premium as it has an existing form of cash flow, unlike a quality franchise in its infancy.

A resale estate agency tends to be sold for a multiple of its revenue. For example, if a business has a net profit of £100,000 a year and it’s selling for £250,000 – that’s a 2.5 multiple. Every industry has its own suggested multiple ranges that make sense for that business.

Tip #1 | If an estate agent is cheap, it’s probably for a good reason.

99% of the time, these low-priced businesses are cash distressed and not making money.

Some can be easier to turn around than others, so it can be a good deal if you know how to turn around a business. Take, for example, a fast-food franchise. There’s not a whole lot that you can do to increase its business. This is because you’re limited by walk-in traffic and the terms of the company. However, an estate agent can get out there into the business community. You can start to network and proactively build that business back up. Depending on your skills and depending on the type of business you’ve got, ask yourself whether this is a business where you can control the outcome. Where I can do a turnaround. If so, do I have the skills to control that outcome?

In those cases, a distressed resale at that bargain price MIGHT make sense.

Most of the time, however, these resellers target buyers with little-to-no money. Hypnotised by the dream of being a business owner, they spend £30,000 on a struggling estate agency. They then lose all that money paying their rent, their employee salaries, advertising, etc. Then they sell that business again six months later to the same type of buyer – rinse and repeat. So, unless you have turnaround skills, it’s usually not a good deal when it’s that discount price. Unless, of course, it has recurring revenue. If you take it over and it does have an existing customer base, will you benefit from it? If not, you might be better off beginning a quality franchise from scratch because you’re not going to be paying that premium again.

Most of the businesses you see at these fire-sale prices are often cash strapped. Therefore, it can sometimes be easier to start a new franchise than to turn a failing business around – but why is that?

1. Negative Reviews

These struggling companies have dug themselves into a hole online, which is hard to get out of. It would make more sense to start fresh, build your credibility and your rapport with a quality franchise.

2. Online liability

When buying an existing business, you can end up owing the past debts of that business or even be liable for future lawsuits. Yet, with a quality franchise, there is no liability. There are no debts that you might be in trouble for, and there are no existing lawsuits that can come back to haunt you.

3. Company Culture

These struggling businesses often have poor employee/employer relationships. Such things can be tough to turn around when you’re dealing with plenty of different complex personality types. So why not build that culture from scratch?

Conversely, if you have the budget, you don’t have to buy a fire sale business. You can buy a well-run business – and that would make sense. The staff is in place, they’re long-term, there’s low attrition, the culture is great, their online reviews are good, and the customers are all happy. You buy that business and walk into an existing cash flow, but these businesses aren’t sold for £30,000 or £50,000. They’re successful, so they’re going to be asking for a LOT more money. Of course, you’re going to be paying a premium for these types of resale businesses. Therefore, the equity you would have made starting that business via a quality franchise opportunity would be lost.

So, as you can see, there’s no right or wrong answer. It’s going to depend on your skills, your budget, the type of business and several other factors as well. Unless, of course, you take us up on tip number 2 . . .

Tip #2 | Instead of tip toeing around giants, join them.

Be your own boss with readily available support.

Saxe Coburg is offering a quality franchise proposition for customers and a strong hybrid model. This combines the personal touch and knowledge of a local estate agent with the speed, accuracy and convenience of the online world.

It’s effectively a marriage of the old and the new and is operated through a national network of local franchisees.

The keyword here is local. A quality franchise is invested in finding local people on the ground in their locality. Not someone in a distant faraway office. Local franchisees are recruited, trained and supported by regional managers. Regional managers are the link between the franchisee and the directors on a day-to-day basis. Directors need only deal with a limited number of senior managers. This frees them up to oversee their quality franchise and move it forward. Both franchisees and regional managers are all self-employed business owners. They all run their businesses, and they’re responsible entirely for their costs and profits.

Franchisees are, therefore, by their nature, driven, business-like and responsible.

They create local relationships and strategic partnerships that benefit the Saxe Coburg brand. This encourages profitable growth within EVERY geographical area. Such an avenue allows you to enjoy access to other earnings streams that provide additional income for them and new moves.

Our model ensures that every local franchise can be a very profitable business.

Every single franchise is a business on a unique learning curve. However, new move franchisees are supported with systems and mentoring from regional management. We have created automated systems that are fast, avoid unnecessary double handling of data and repetition of tasks. This enables franchisees to do all their administration and upload everything to a cloud-based system.

This makes processes fast and accurate and saves a considerable amount of money on administration costs.

There is a culture of shared learning that provides not only support but also recognition for those with new solutions and ideas. It also provides the directors with valuable insight and creates a strong team with common goals.

Our real estate agent franchise opportunities provides . . .

Best in class training delivered by experienced professionals

The freedom to create a balanced life, tailored to you

Full autonomy and the space to run your own business

Operate under an award-winning, successful brand

Recover initial investments in the first few months of trading

Systems and processes to operate a proven business model

Uncapped earning potential and the chance to be your own boss

Here’s How We Turned a Real Estate Agent Franchise Into a Success

We are looking for branch directors, both in the UK and globally.

With over four decades dominating the Estate Agency world, Saxe Coburg is opening its doors. Our team’s unrivalled local knowledge and experience is one thing – our accolades are another. Branch by branch, we are creating an innovative hybrid of home-based, high end-estate agency across the UK. To continue to grow our network, we are seeking exceptional individuals who truly believe in the Saxe Coburg ethos and align with our brand.

This is a once in a lifetime opportunity to become a prospective Branch Director with our letting agent franchise possibilities.

Saxe Coburg will consider opening branches in any affluent town across the UK. We are also expanding our brand overseas. We’re also excited to speak to anyone who would like the opportunity to become a Branch Director in a country outside of the UK. Our franchise package differs slightly depending on your territory. Regardless of your destination across the globe, we would be delighted to discuss opportunities further with you.

If you want to learn more about our real estate agent franchise opportunities, get in touch. We would be delighted to join you on this exciting journey and look forward to starting the process.

Chief Operating Officer
🏡 | Louise Martin
📞 | 07754 658 585
📧 | Get in touch below

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Saxe Coburg is committed to ethical franchising and is an accredited member of the Quality Franchise Association, whereby we follow the QFA Code of Conduct.

 

 

‘Saxe Coburg is committed to ethical franchising and is an accredited member of the Quality Franchise Association, whereby we follow the QFA Code of Conduct.