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Rawson Property Group’s expansion plans

26 Jun 2015

The Rawson Property Group’s goal is to have 400 franchises up and running across the length and breadth of South Africa, as well as in certain neighbouring African countries by 2020. The possibility of overseas expansion has also not been ruled out.

Rawson says right now, his group is expanding at an approximate rate of one new franchise established every two weeks.

This is according to Bill Rawson, Chairman of the Rawson Property Group, who says right now, his group is expanding at an approximate rate of one new franchise established every two weeks.

He says this expansion rate is not quite as high as that of last year, but it is satisfactory in view of the care being taken to select suitable franchisees; on average, only one in 12 applicants is accepted.

To date, the Rawson Property Group has set up 238 franchises, and although the vast majority of these are involved in residential sales, the group is also active in the rental, commercial and auction fields, and the franchises here are also being regularly expanded.

Asked why, apart from increasing the group’s profits, ongoing growth of this kind is seen to be necessary, Rawson said the wider the group can cast its referral net, the more valued and respected it will become.

“We want to end up in a situation where, no matter what part of the country a buyer or seller is interested in, we can refer him to a local franchisee.”

Rawson says a countrywide footprint will raise the awareness of the Rawson brand further, and this is a primary goal.

He says in his group, no less than 50% of all the royalties collected from franchisees are channelled into marketing and branding. This is quite likely the highest percentage allocation of this kind in any real estate marketing group, but it has, in his view, paid handsome dividends.

As in most businesses, the 80/20 principle is seen to be operating clearly throughout his group: 80% of the turnover is achieved by 20% of the franchises and the top 10% of franchises are much in a league of their own.

“What this means is that we have to give extra special care to the smaller, less effective franchises,” he says.

“Many good franchisees and estate agents are mildly or severely technophobic; they dislike IT in all its forms. However, if a group does develop simple IT systems, agents soon learn to appreciate the labour savings and the increased efficiencies that these bring about.”

Asked what input his management have to make to ensure adequate support, Rawson said they employ some 70 head and regional office staff members whose primary goal is support of one kind.

He says what is more, regional management staff have to be available on a 24/7 basis to franchisees and estate agents and on average, every agent goes through 50 to 60 hours training per annum.

One has to realise that the number of agents employed in South Africa today is only 28 000, says Rawson. This is a huge drop from the 90 000 plus figure of 2007, and this has come about because today extensive state regulation and fairly arduous educational requirements have made it necessary for estate agents to be well trained.

“In my view, the regulation can now be excessive and it certainly has not helped transformation in our industry. However, it does mean that today’s estate agents are a relatively small group and we have to ensure that our estate agents are among the best of what is already a small profession,” says Rawson.

He says these professional qualifications slant the franchise selection process in favour of those who are already qualified and have experience in this field. However, it remains true that for a relatively small investment, the returns that a franchisee can earn are substantial.

“We have sold some franchises for as little as R100 000 and others have cost over R2 million, but in all cases, the upfront outlay is relatively small in relation to the return that a good franchisee can achieve within the first 12 to 24 months.”

Successful franchisees had quite often added another franchise to their portfolio or cordoned off a section of their franchise and sold it to another person. All of these tactics can help the franchisee to improve his profit situation radically, says Rawson.
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