Franchise profile: Property sales and lettings chain Belvoir
Belvoir is one of the UK’s largest property sales and lettings chains with highly visible, branded high street offices. It specialises in the management of residential properties on behalf of small to medium sized landlords. Franchisees source, let, manage and sell residential properties within their exclusive territory. A typical territory is a town or a city with some larger cities being sub-divided into multiple territories.
Q&A subject: Dorian Gonsalves, director of commercial and franchising at Belvoir
Franchised since: 1996
Number of franchisees: 193 – 31 new offices acquired in July 2015
Network turnover: £37m
Growth last year: 11 per cent increase in turnover, ten per cent increase in profits
(1) What’s the history of the business and its current standing in the marketplace?
Our very first franchise was launched in Elgin, Scotland, exactly 20 years ago. The first franchise owner took a leap of faith after leaving the forces and he believed in the business model and the integrity of the founder, Mike Goddard, who had also recently retired from his position as a wing commander in the RAF.
It’s fantastic that after that length of time our first franchisee is still going, and trading successfully with consistent growth each year. Our brand and system is based on three core principles: customer service, professionalism and specialism. Since our inception the business has grown from a standing start to a network of just short of 200 offices.
(2) How have you been able to establish Belvoir’s expertise in the wider property sector?
In housing, we are subject to around 100 pieces of legislation and it’s a complex industry. Our franchisees become property experts in their local areas and likewise our management team is composed of industry experts in their own right. Where possible, we raise standards and get involved with influencing policies which may affect our client base.
It was a real honour to be invited to join The Property Ombudsman and I’m now serving my third year as a director of TPO. Around 95 per cent of all estate and letting agencies in the UK use TPO as their preferred consumer redress scheme.
(3) You’re now a listed company, how has that impacted Belvoir?
We were the first lettings franchise to list on AIM. Our market capitalisation in 2012 at the time of the floatation was less than £20m – it’s now £35m and our shareholders and franchisees, some of whom are also shareholders, have benefitted from the IPO in a number of ways.
Firstly, we have paid a consistent dividend and our share price has increased from 75p to 128p. Secondly, we have deployed around £5m directly into franchisees’ businesses in the shape of short-term loans to help franchisees acquire competitors in local towns and cities.
To give an example, a franchise owner acquired an independent business in November 2014 which was subsequently brought under the Belvoir banner and fully rebranded by the franchisee. The business was purchased for £1.4m and we assisted with funding to make this life-changing deal happen.
(4) As well as Belvoir’s milestone anniversary this year, one of your franchisees has also set a new watermark for the network?
Terry Lucking is our most consistent and top-performing franchisee, and reached a turnover of over £1m from his outlet in Peterborough. Now operating in both Peterborough and Cambridge, his combined business is valued at over £1.5m.
Lucking started from scratch and has grown organically to become one of the largest and most respected lettings agencies in Peterborough. He is constantly exploring new opportunities and takes immense pride in his team, his business and from creating new initiatives that can be rolled out to the wider franchise network.
(5) Acquisitions are playing a key role in the growth of the business, at both a franchisor and franchisee level – why is that?
A lettings agency can only grow in two ways: by acquisition or by organic growth. Nearly all of our franchisees started life as a “cold start”, however later in their business lives some franchise owners catapult their turnover, and the value of their asset, by acquiring a competitor. We assist with sourcing a suitable acquisition, with funding and also with the operational side of taking over an existing business.
The same applies to acquisitions made by the franchisor. We recently acquired a network of 31 offices which, over time, will increase profits and provide access to further funding which will then be deployed back into our network to fuel further growth. It’s an exciting time for franchisees.
(6) What are the plans for Belvoir in the next five years?
With over 300 territories available, we still have a long way to go before we cover all major towns and cities. By 2020 we will have over 300 offices and our aim is to be the agent of choice for landlords and tenants.
(7) Name three key attributes you look for in your franchisees?
A passion for customer care and a desire to become a property specialist in their local area are key attributes, alongside absolute integrity in business which is key to building a loyal client base – a landlord may wish to keep an investment property for 20 years or more. Trust, predictability and reliability are the foundations of a successful property business. All of the required technical skills can be taught by mentoring and training.