How has the downturn of the housing market influenced the way you recruit prospective Smartline
franchisees?
One needs to keep in mind that when we refer to a downturn in the housing market, we are actually referring to a growth factor of 12 to 14 per cent: decrease from the 2003 peak where growth was at around 22 to 25 per cent. In fact over the past 30 years the housing market has not fallen below double digit growth.
We have found that during slower periods of housing growth, we are more likely going to recruit a more successful franchisee, as they understand the importance of joining a group who has a robust platform and a strong customer service proposition which is clearly demonstrated and delivered. Quality always rises to the top in a slower market.
Has the end of the property boom changed the way you structure the pricing of your upfront licensing and ongoing fee payments to franchisees?
The slow down in growth has not affected our franchise fee or our commission payments. What we have noticed, is that we are investing more in developing training programs and marketing collateral to helping our franchisee’s grow their business.
This centres around the fundamentals in business development so that they can continue to focus on identifying good business partners, and building a referral business from happy content customers who become advocates of their service.
Given the current economic climate, what is in store for the mortgage finance market within the next 2 to 5 years?
In Australia mortgage brokers originate between 35 to 40 per cent of all residential loans. This trend continues to grow, and is in line with the trend overseas, where mortgage brokers in the UK originate between 65 to 70 per cent and between 70 to 75 per cent in the USA.
We expect that the use of mortgage brokers will continue to grow to around 50 to 60 per cent in the next two years and this is supported by the experience in the Western Australia, the first state to use mortgage brokers, where mortgage brokers now originate over 50 per cent of all mortgages.
As the market has slowed recently, what we are seeing is the emergence of commercial finance opportunities, to supplement the residential side of the business. Banks are now developing similar commission payments for the introduction of commercial and asset loans.
What makes your franchise model more appealing than that of competing mortgage finance franchises?
Smartline strives to create the ideal environment to build a successful business, our aim is to see all our franchise owners succeed both financially and emotionally.
We will arm our franchise owners with an exceptional reputation for quality and client service, comprehensive training and support to help you build your business, state of the art software systems, innovative marketing tools to give you a competitive edge and unlimited earning potential.
This along with decades of combined experience in back office proves to be truly a great business opportunity.
What kind of personality and work ethic does a prospective franchisee of yours require to succeed?
All Smartline franchise owners meet our stringent criteria. Franchise owners must have a strong work ethic, be a great communicators, dedicated to client service and prepared to undertake the hard work necessary to run a successful small business. You may be experienced in lending like many of our franchise owners, but it isn’t a prerequisite. Your business acumen and life experience may make you exactly the kind of person we’re looking for.
Smartline recently gained Accreditation with FIQA (Franchise Industry Quality Accreditation Process). What is this and why Smartline applied for accreditation was because we wanted to benchmark our business against others across industry and gain an independent validation of our franchise.
It’s a holistic audit of the franchise and makes recommendations of what needs to be done and how that can be carried out.
The process was a consulting and diagnostic one that looks at management competencies, external business positioning, strategies and culture.
It also considers marketing, HR and financial health.
We know our strengths and the process confirmed this for us, but more importantly it benchmarked us and helped to highlight areas of weakness that were not obvious to insiders which will enable us to focus on going forward.
The pleasing aspect was that Smartline exceeded each benchmark and was awarded FIQA in March 2006.
Read more about buying a franchise and running a franchise.
20-Jun-2006