Began franchising: 1993
Number of franchises: More than 100 franchises in all states but Western Australia and the Northern Territory
Investment required: $60,000 to 95,000 plus GST.
As managing director or
Hotondo Homes, Michael Renwick believes that the business of home building is one of the hardest.
"It's the biggest transaction anyone ever makes," he says. "Each project takes around a year and you have a very close relationship with your customer over the whole period – if it's not a good relationship from start to finish, it will reflect on the overall experience for the customer and can potentially damage the brand and future business."
Independent builders must also struggle against the might of the big players. 10 years ago, the top 100 builders in Australia held 26 per cent of the market. Today they hold 40 per cent.
"Big builders are overwhelmingly dominant in the building industry," Renwick says. "What a franchise does is provide an opportunity to fight back."
The
building and utilities company founded in 1953, by Michael's father Kevin, Hotondo Homes
building franchise is Australia's largest national network of local builders, ranking in the top 10 across Australia and the top five in the eastern states.
"When you get it right and work together, each member has the purchasing power and marketing power of a top 10 company," says Renwick. "That's what franchising is about."
Hotondo Homes franchisees are either builders or running the business in partnership with a builder – someone who signs the contract has to have a builders' license. Business experience, particularly financial and estimating skills, is also important.
Renwick says that, despite the economic gloom, inquiries are, currently running hot.
"It's not pretty looking at a downturn but there are also a lot of pluses," he says. "You can work harder on the basics, you're able to get better people and they're more likely to stick with you. It also teaches you that every job is very important and that every lead is valuable – things you might otherwise take for granted. It's easier to sell a lot of houses in good times but maybe harder to deliver the right outcomes. As long as things aren't so bad that you can't get any work, it does ease up a few things. If you take advantage of them then you'll do well.
"At times like these you've got to focus on micro parts of your business – the things which are always important but which tend to take a back seat when things are easy."
13-Oct-2008