How has the downturn of the housing market influenced the way you recruit prospective franchisees?
Our comprehensive recruitment process has not changed because Mortgage Choice will not compromise quality for quantity to meet recruitment targets. The mix of low employment, a competitive franchise marketplace and an unsettled housing market, have contributed to a slowing down of recruitment nationally. That said, it is important to state that the Western Australian housing market is very robust and recruitment is very positive there, as it is in Queensland. Victoria and South Australia have been steady while the NSW housing market is experiencing some early signs of a recovery albeit slow. This augurs well for the future.
Has the end of the property boom changed the way you structure the pricing of your upfront licensing and ongoing fee payments to franchisees?
We always said that there would be a correction in the housing market not a crash and that has proven to be the case. Nationally, residential property loan approvals are at similar levels to those that existed during the so-called height of the property boom in November 2003. We have seen the dynamics of the market change with less reliance on NSW and a greater contribution from Western Australia and Queensland. Therefore, there has been no reason to increase the upfront fee of $35,200 required to buy a Mortgage Choice franchise.
What makes your franchise model more appealing than that of competing mortgage finance franchises?
Mortgage Choice was established in 1992 and commenced franchising in 1994. We have a proven model that has received many industry awards recognising it as quality and standing in the industry. The strengths of the Mortgage Choice model include its industry approved two week induction program; reputable brand; ethics; consumer advocacy stance; its franchise system; the support provided in marketing and business development from both group and state offices and, mentoring by experienced franchise owners.
What kind of personality and work ethic does a prospective franchisee of yours require to succeed?
A successful Mortgage Choice franchise owner is one of any age who has the “fire in the belly” to succeed, is strongly customer focused and entrepreneurial, but able to work in a franchise system.
There is no pressing need to have a sales or banking and finance background, indeed only around 35 per cent of all our franchise owners fall into this latter category. The overriding requirement is for the successful candidate to “treat every customer like it is their first” and develop referral points so the repeat and referral business will follow.
Given the current economic climate, what is in store for the mortgage finance market within the next 2 to 5 years?
In a survey conducted in 2005 Mortgage Choice found that over 55 per cent of borrowers were confused about the mortgage process and this was regardless of whether they were first time or subsequent buyers. The concept of mortgage broking is very much consumer driven and given the increasingly competitive nature of the home loan market there is no doubt that consumers will continue to seek the services of mortgage brokers. At the same time, data provided by the Australian Bureau of Statistics continues to show a solid pattern in home loan approvals and in particular, a good growth curve in first home buyers. Therefore, the prospects for the future are excellent.
Read about buying a franchise and running a franchise.
26-May-2006