What is a property development franchise?

A franchise is a business model in which a person can operate and manage their own business under an established brand name and business model.

This person (the franchisee) can utilise the broad business model that the parent brand has already proven can be successful, and run their own business without having to build it entirely from the ground up, meaning it’s much easier, faster, and cheaper to gain public trust and start generating good money.

The franchisee can make their own decisions on researching new properties, scheduling meetings and viewings, communicating with customers, and business development.

The benefits of working with a property franchise

While the parent brand will usually dictate the overarching business model that a franchisee utilises, a huge benefit of being a franchisee is that they often have autonomy over the day-to-day running of the business.

The big benefits of operating a franchise are being your own boss and taking a good split of the profits generated.

Another advantage is that due to the parent brand, set-up fees for a franchise are significantly lower than starting an entirely new business from scratch.

The ongoing monthly cost of running a franchise is also significantly cheaper than going it completely alone.

•   Property investors face 'huge risk' of stranded assets if they fail to decarbonise
•   The housing decline: how will the next PM tackle it?
•   Funding 365 launches into ground-up development finance

How much money could a property franchise make?

According to Sourced, the expectation for a new property development franchise is that the business will trade on around 11 property deals in the first year.

If there is an average profit of £3,000 per deal, there could be an expected first year turnover of £33,000.

The opportunity to add ‘flips’ to the pipeline could bring an average profit of £25,000 per deal.

At an achievable four flips in the first year, this would be an additional income of £100,000.

The franchisee can also add conversion projects to their pipeline, as just one small conversion project could create a profit of £80,000.

With 11 traditional deals, four flips, and one conversion, the franchise has the potential to make £213,000 in the first year.

Chris Kirkwood, director at Sourced (pictured above), commented: “The ability to work to our own tune and increase our work life balance for the better is one pandemic influence that has remained of great importance today, and this quest for freedom has led many to go and be their own boss in their respective industries.

“But going for it alone carries significant risk and that’s where franchises come into their own.

“They provide the earning potential, autonomy, and flexibility of self-employment combined with the ready-made brand awareness, marketing resources, and trust of a well-established business.

“Particularly in the world of property development — that can seem a daunting one from the outside looking in — the ability to draw on decades of experience is often the differentiator that allows for success.”