Franchisees in The Property Franchise Group have been busy buying up colleagues’ businesses, it has been revealed.
Without going on the open market, over 20 offices and 2,500 managed properties have changed hands between franchisees in a 12-month period.
The figures relate only to The Property Franchise Group’s high street brands, and do not include EweMove.
The purchase of other franchisees’ businesses is on top of the acquisitions of unrelated high street competitors, and comes at a time when average franchise turnover among the high street firms has risen to £445,000 a year.
Chief executive Ian Wilson said it was a case of already-successful business owners in the group growing even more successful “at the expense of less successful colleagues and their completion”.
He said: “Nine franchise businesses have been added to our £500,000 annual turnover club with revenues across the club now averaging £841,000 per business, up from £815,000 one year ago.
“We now have 58 franchisees in this club.
“We are very active supporting franchisees to acquire competitors’ businesses but what is less visible is that we also help franchisees to buy their neighbours when it’s time for them to cash in and retire.
“These businesses are not sold on the open market as it’s a condition of sale that the franchise must continue.
“However, we look at each case on its merits, and in some cases we permit the closure and rebranding of the existing business so that the lettings portfolio can be folded into a bigger operation and the outgoing franchisee is able to exit at a time to suit.”
He went on: “In the 12 months to May our traditional high street franchisee turnover was up 6% with a new record being set with average franchisee turnover hitting £445,000 per annum.
“The network has shrunk from 264 to 255 trading high street offices at the end of May, and 22 offices have been purchased by franchise neighbours in the period.
“A total of 2,582 managed properties have changed hands between franchisees and Martin & Co has been the net gainer.
“No offices stopped trading unexpectedly – all closures in the period have been controlled disposals, which is a very good result in view of the challenging trading conditions.
“The trend of bigger franchisees buying up smaller players will continue, and we will soon be providing a trading update to the market on the progress we have made to the June half-year, particularly with our acquisitions programme.
“We have a network of very motivated buyers and, as these facts demonstrate, the financial firepower to pay buyers their price and get deals over the line.”
Comments (11)
Very worrying losses by a large number of Ewemove branches explained about by other posters above.
A major problem seems to be that Ewemove does not have senior leadership with enough property experience to turn around this shambles.
Also noticeable is the lack of response from the Ewemove so called Head Shepherd on these disastrous losses by numerous franchisees. Good leaders don’t run away and hide issues like these Ewemove failures !!!
The fact is it is much harder to sell a franchise than buy one, so a franchisee with the opportunity to sell to a neighbour will invariably take it – even if that means getting less money. It can take years to sell a franchise in the open market whereas selling to a neighbour should at least give the seller a quick exit. Given the very apt quote yesterday of ‘£1 letting income equals £3 of stress’ I would think most selling franchises have reached the end of their emotional tether and just want out! I always enjoy reading TPFG’s positive spin on the world but did have to chuckle at the average turnover figure of £445k. Strip out the ‘Super Club’ as they’re called and what’s the average for the remainder? And in any event who gives two figs for turnover, PBT is the only measure of success.
Ah yes the conflict between turnover and profit continues to rage between franchisor and franchisee. Franchisors should encourage profitability in terms of longevity as those without borrowing and with a healthy profit will continue to thrive in any market. A good franchisor should care about franchisee profits as these do withstand the test of time. But then again a franchisor makes money when businesses change hands.
This press release shows exactly what is going on at TPFG. They are gradually weeding out the small franchisees or the ones that do not toe the company line. If I was a single office owner, who was just ticking along, but not necessarily moving the earth, I would be very worried. The plan is to end up with just a hand full of ‘super’ franchisee’s and they will stop at nothing to get rid of people that do not fit in.
Any franchisee’s need to make sure they have all their books in order, otherwise they may well get a visit from an auditor and suddenly find all sorts of threats of legal action are being made by the ‘Head Shepherd’!
EWEMOVE -THE ELEPHANT IN THE ROOM
Yes unfortuately that hasn’t been the case with the black sheep in the TPFG group -Ewemove some franchisees migrataed to Martins and Whitegates
Far from being “bought up” the number of failed franchisees at Ewemove shows no signs of stopping.More than 1 a month so far this year
The personal losses suffered by some failed franchisees in such a short space of time is quite staggering.Its clear in many cases that management should have stepped in much earlier to have mitigated this
A shepherd’s role is ensuring the welfare of the whole flock not just the prize rams
They certainly have a case to answer enticing many in with zero experience into the fold on the strength of a few successes
EXPERIENCE IS A HARD SCHOOL .SOME NEVER STOOD A CHANCE WITH THEIR CAREER HISTORIES.WHAT ASSISTANCE DID THEY GET ?
A quick romp through Companies House of the last accounts of some of the failed franchisees. It would be safe to say when they threw in the towel that their financial predicament had deteriorated even further as these are slightly historic
The key metric is the colossal amount that creditors were due in12 months where it was clear lack of instructions were never going to meet let alone make any inroads into the deficit being carried over
This list below of dead sheep is by no means exhaustive with some who didn’t get as far as submitting any accounts at all
Furthermore there are many trading with very few instructions today where the position looks very vunerable indeed Some with less than 10 instructions and some under 5
Many currently trading carrying over £50k deficits
Even in the Ewemove script beckoning in franchisees they say poor estate agents only achieve 52 pa when less than half of Ewemove franchises do
“Industry statistics show that even a very poorly performing sales agent can comfortably sell one property per week and most established businesses sell at least two or three times that.” !!!!!!
DEFICIT CREDITORS DUEIN 12 MONTHS !! LENGTH DEATH
KIDDERMINSTER (£43,305) £52,156 4 YEARS 2018/9
LINCOLN (£22,561) £33.291 5 YEARS 2019
CHELMSFORD (£49,625) £65,348 3 YEARS 2018
NORTH
WATERLOOVILLE (£32,556) £52,469 5 YEARS FEB 2019
OXFORD EAST (£55,815) £55,815 3 YEARS 2018
REIGATE&
REDHILL (£71.809) £80,005 3 YEARS 2018
DONCASTER (£57,053) £74.031 3 YEARS 2018
SOUTH
ALTRINCHAM (£35.536) £49.276 4 YEARS 2019
CARDIFF
NORTH (£14,811) £25.076 5 YEARS 2019
MAIDSTONE ( £42,740) £58,813 3 YEARS 2017
GLEADLESS ( £15,639) £23,900 3 YEARS 2017
STEVENAGE (£15055) £31,060 2 YEARS 2019
STAINES&
ASHFORD (£34,632) £47,934 2 YEARS 2019
Hundreds and Thousands of debt incurred by that lot alone. Many of the franchsiees are late in life with very little opportunity of getting back on their feet after their experience
Many others with debts over £15k and some didnt even manage to submit any accounts.
The lucky duo who waltzed off into the sunset having filled their pockets I hope they can sleep at night !!!!!!!!!!!!!!
Some really insightful comments and figures there HOW.
Come on Ros, the leg work has been done for you, sculpt it into a story. You must get bored of all the press releases that you end up writing.
The industry needs to know about this.
Just above you can see almost a dozen examples of individuals with life changing debt (does not include their start up capital / life savings lost).
Another informative and entertaining post. I think you would make a great guest author on this website.
I still laugh every time I see “Sporting Ken”!
On that note Sporting will be donning his Kiss me Quick hat tomorrow 2 of his hosses under the care of trainer ” Sumo” Quinn are due to run at Yarmouth where there will be a holiday crowd atmosphere
Princess Keira and Mrs Discombe. They stand half a chance !
Very interesting info there. Thank you
Hillofwad71 Please share us your Companies House performance so that we can see what ‘ good looks like ‘ we can all learn. Hopefully you are not too shy as you try to embarrass others you have tried their best.
A better story would be the diminishing flock at Ewemove and the debt a number of the franchises are in.