A franchise built on bricks and mortar Franchise Prospectus
What is franchising? Welcome to the Go Direct Lettings Franchise opportunity and thank you for your enquiry. Our prospectus will advise you on the many aspects of this fantastic opportunity, the benefits of this sector, our business model and of course, working with us. It will provide information on what we do to support, train and educate you in all aspects of the rental market. We will guide you on how you can best use the skills you already have and those we will train you in, in order for you to take advantage of this very exciting and dynamic business. Don Holmes Managing Director Contents 1 What is franchising? 2 Our unique selling points 4 About the lettings market 5 Testimonials 7 Why a Lettings Franchise? 9 Why go to High Street? 10 Our franchise package 11 Location, location, location 12 Working capital 14 Recruitment and growth 15 Training and support 16 The 3D s 17 The enquiry process 18 Be your own boss 19 Meet the team 20 Question space 21 Application form Franchising is a very resilient business model, developed off the back of an already proven successful business. Franchising will never work unless the model has proved successful before. There are about 1000 franchise models in the UK with an annual turnover, according to the NatWest Bank s 2012 report, of 13.4 billion. The principle of franchising is simple: the franchisor, in our case, Go Direct Lettings (Franchise) Ltd, grants you a licence to operate your business, using our name and brand, whilst giving you access to our proven business methods, techniques, practices and trade secrets, along with our ongoing support and guidance making sure your business has the absolute best chance of succeeding. Once you have qualified and the Go Direct Lettings licence has been granted and you have been welcomed to the team, the franchisee is then able to utilise all the Go Direct Lettings branding, marketing techniques and tried and tested systems and gives you access to all the ongoing support, training and know how to assist you to succeed. In addition, Go Direct Lettings will advise you on the selection of your branch location, premises, office layout and design, marketing, staff selection and training and many other aspects of business, which a new start up or independent practice wouldn t ordinarily have. So what are the benefits of franchising? Well, to start with there is strength in numbers and franchising gives you the team support you will not have as an independent. It is also a proven business model which will help you avoid those costly mistakes. It is a proven fact that 90% of all new start up business fail within the first three years, whereas 95% of franchise business succeed due to the expertise and experience behind them. We believe this develops a WIN, WIN situation as the franchisor and the franchisee are highly motivated to help each other succeed. Working for yourself but not by yourself 1
Our Unique Selling Point Comprehensive training and support The benefit of buying a Go Direct Lettings franchise is the comprehensive training and support in know how tactics and trade secrets that you receive from day one. Although experience in the property world would prove an advantage, it is not necessary as you will be trained in all aspects of the business. We will support you and be on hand to help with any issues you may have 24/7, 365 days a year! This is particularly important in the early days of the business as this is the time when you will require the most support. We are also on hand to assist in systems input, legal requirements, appropriate insurances, site selection, shop fit out, hiring and recruiting staff, training, appropriate marketing and any launch campaigns, etc. If you were to go it alone and start your own business from scratch, you would not have this support. Experience is a key factor Without experience, you are vulnerable to learning the hard way, which is of course, also the expensive way. Marketing support As part of our team you will benefit from a group marketing fund, which gives you greater marketing power than you would have if running your own marketing campaigns as a sole trader. Being part of our network team It is not only the franchisor who is on hand to help out when you need it - you are also able to tap into the wealth of knowledge of your fellow franchisees and team members, tuning in to those who can relate most closely to you and can understand your concerns from their own experiences so can help with any queries you may have. We also hold regular meetings so we can swop best practice and introduce you to many different learning and development opportunities as we go. For a franchise to be successful it needs to have successful people working within it. This is why team players are so keen to help each other - your success is a reflection of their success. Ongoing training We will be with you throughout your journey with us to offer any additional support or training and market updates as you need them and they occur. Legal compliance and awareness All areas of society, particularly commerce and business have lots of specific legal requirements. Many overlap, such as employment law, discrimination, health and safety at work and much more, but there are areas of specific performance where industry specific legalities are of vital importance. We will ensure you are kept well aware of and assist you in compliance of these rules and regulations, including access to our market leading software, comprising of all legal documents and template letters. 3.4 MILLION PROPERTIES ARE NOW PRIVATELY RENTED English Housing Survey 2010/11 Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 2 Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 3
About the Lettings Market Testimonials The Private Rental Sector is growing at a phenomenal pace. Don and Lyn provide tremendous support. Every query is answered swiftly and professionally. I had a small health problem at the start of the franchise and Don and Lyn s attitude was amazing - every need was covered. The credit crunch that started in 2006/7 hit the UK property markets particularly hard, causing huge difficulties in securing mortgages. In addition to this, the ageing population, shortage of new build, immigration and of course, ageing housing stock will continue to impact on rental demand and is predicted to continue for the foreseeable future. At the time of writing, the UK average house price has hit 187,500 - an increase of 7.5% - yet wages have been stagnant for over five years, growing at only about 1.5%. This will continue to have a huge impact on the UK housing needs and the only way to meet the demand is the continued stimulation of the Private Rental Sector (PRS). According to the English Housing Survey 2010/11, 3.4 million properties are now privately rented and the proportion of households living in the PRS has been rising in recent years, faster than ever before, with 17.5% of UK households renting privately in 2013. This is predicted to grow to 20% by 2020. This translates into several million more homes coming on stream over the next few years. In 2010/11, 7.4 million households were renting in the social sector accounting for just over half of these renters (3.8 million 51%) and 3.6 million households (48%) were renting from the PRS. This increased in late 2013 to there being more people now renting in the PRS than the public sector. The Building and Social Housing Foundation (BSHF) Survey 2011 found that if current trends persist by the end of the decade, one in five households will be renting. The Government is considering some minor regulation of the industry, which will not affect those professional and established brands, but may well impact on many independent and smaller operations, probably encouraging them to follow a different career path. Clearly, it follows that as this demand grows so will the need for better, more professional and established management services. I believe my future success will be directly attributable to the help and assistance provided during the start of the business. Cliff Horton South Liverpool I have worked for different Estate Agents over the last 12 years, but I decided to invest in a franchise with Go Direct Lettings so I could be my own boss. Don and Lyn have given me the support and knowledge I needed to get out there and make it happen. For once, I have my own prosperity in my hands! Jane Nightingall North Wirral Having started out in property management 18 years ago, this opportunity was the next natural progression. There is no end of support from the management team and although the franchises are separate, it s a fantastic team to be part of. If you are thinking about starting your own business, I would definitely recommend Go Direct Lettings. Kathy Jordan East Wirral Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 4 5
Why a Lettings Franchise? Helping you into profit in a competitive market. Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 6 As we have aimed to demonstrate in this booklet, the private rental sector is incredibly buoyant and predicted to continue being so for the foreseeable future. The sector is largely recession proof as everyone needs somewhere to live. Property is, of course the UK s main asset class and the back bone to every millionaire s fortune. So, being in the sector exposes you to many other opportunities, such as personal property investments and as your agency becomes more established, unlike the traditional estate agent that sells a property and then it is gone, our model helps you to build a residual income stream month on month, that allows you to continue growing and investing in your business and yourself for as long as you wish to work at it! There is no doubt that the lettings market is highly competitive but this should be seen as encouraging as it proves demand, need and that the business is out there; it also stimulates business and helps keep you motivated. The Go Direct Lettings business model is proven and effective. The network has ambitious plans for growth over the coming years, which means you will continue to benefit from a brand who s strength and reputation is growing all the time. You will have an edge over your competitors as our training plan and financials are designed to get you fully operational within 3-4 weeks. The business model is profitable and cash positive in the early months of trading and by following our detailed instructions, laid out in the operations manual and with the right application and efforts from you, your franchise should repay your initial investment within 12 months and potentially quicker than that. Uniquely, you will be able to draw on the experience and support of Head Office and the other franchise owners, who will be available to assist and help you grow your business, helping you to break even as quickly as possible and go on into profit. Being part of the Go Direct family, rather than acting alone, will give you the very best chance of success. 7
Why do I need to go to high street? Why Go Direct Lettings? 86% of landlords chose their agent by location and availability to them Taken from a survey from 2011* 8 There are many online agents now and for the time being some might be doing okay. If, however, online is the way forward why is the most technological company in the world, Apple, opening high street shops? Also, take Tesco Express, or Sainsbury s Local, all major UK brands that have tried the online services sector and found to their expense that the customer base actually dropped off. People do business with people that they can get to know, like and trust and can access easily and conveniently. Would you do business with someone you didn t like? Wouldn t you be just the same, if you were depending on someone looking after what is probably your biggest asset? That s why our model is based on a high street presence, offering a public facing profile, giving maximum access to your customers to come and meet you, allowing that relationship to develop. USP1: With a Go Direct Lettings Franchise, you will get the best available support, 24/7, 365 days a year. You will have direct mobile and email contact with all key personnel and indeed be encouraged to use them, as and when you need to. (Ask the team) USP2: We recognise this is a life changing decision and a large investment, so we have made the financial entry as flexible as possible by splitting the franchise fee into bite-sized chunks, without the need to borrow funds from a bank, costing you additional interest charges. We have allowed in the financial forecasts for an early growth period, allowing a couple of months for you to develop your business and start to realise some income. USP3: You will not be charged any monthly commission for the first three months and then only 5% for the following nine months, or up to 50 units, allowing you the flexibility of the added cash flow to support you in the early days. We will directly assist and advise you to choose and negotiate a suitable location, making sure you are in the best possible position in your territory, but also helping you to maintain your overheads. USP4: We will build you a bigger than average territory, allowing for maximum market penetration. We also have, if it is required, contacts with a couple of the high street banks, who will consider a proposal for financial support from an applicant subject to status. Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 9
Our Franchise Package At Go Direct Lettings we believe in full transparency and that it is important for you to know, up front, exactly what you are committing yourself to and how much money you will probably need to help you to succeed. There are three elements to this: your set up costs, the franchise fee and your working capital. The full franchise fee is 17,500, payable in three instalments:- At the point a formal offer is made to you, we will send you a letter of intent to proceed and deposit agreement, whereupon the signing of which we will require a deposit of 1,500. A further payment of 10,000 will be required ten days before your formal training starts. The final balance of the franchise fee is payable within three months of signing the franchise agreement, achieving 50 units or going high street, whichever is the sooner. The training will provide you with all you need to get started running your agency, including:- A five year renewable licence Larger than average exclusive territory Comprehensive training package, to include: 10 Days in-house training 5 Days in-territory training Ongoing support and guidance Our territories are generally based upon 35,000 40,000 households to Location, Location, Location We are sure everyone has heard this cliché, but it is as important today as it has always been - selection of your location can be fundamental to your success, so needs to be undertaken with consideration of many elements in mind. Not all locations are suitable, but we will advise and discuss any area and territory selection with you to help you make the right decision. Branding and Stationery pack to include: Letterheads Business Cards Compliment Slips To Let Boards X 5 Personal website profile, including assisting in setting up your social media Package: Facebook, Twitter, LinkedIn Also provided: All legal documents, such as ASTs Legal notices Standard legal letters Full management accounts package Unlike some franchises, we don t believe you need to spend thousands of pounds setting up an office to run a successful business. However, there are some unavoidable costs in setting up your high street presence making sure you maximise your profile and presence, therefore we insist on a minimal level of branch branding. All territories are developed scientifically and geographically, taking into consideration the demographics, household population make up, schools, hospitals, rail stations and other transport links. Our territories are generally based on about 35-40,000 households which is a bigger territory than most of our competitors offer, this is because we want you to have a maximum market penetration and diversification of property types and sizes. This also allows for growth and branch expansion within your territory, such as a second or satellite office, indeed you may even consider developing a second or bordering territory as you develop, all of which we will be happy to discuss with you. *For illustration purposes. Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 10 Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 11
Working Capital This profit chart shows the anticipated growth that can be achieved over a five year trading period and with our support, training, trade secrets and direction, you too can be taking advantage of this growth, but this business is not about making a quick buck. Although you may consider it is a property business, it is, in fact, a people business ; it is about developing relationships and building for the future. It is therefore essential that you are committed for the long term. With the right application from you, profits and other property opportunities will follow. Being an agent puts you in the forefront of local property opportunity and as you develop and grow you will become the local property investment expert, developing a funnel for business into your agency. As we don t directly sell properties you are able to offer unbiased advice to your investor landlords, helping them grow their portfolios under your direction and management. 300000 It is difficult to be precise about the level of working capital you will require, partly because everyone s personal circumstances are different. The level of any finance you require will make a difference, as will the extent of any income and drawings you need to take from the business in the early days. Based upon our experience, we suggest that the overhead in the first year will be in region of 25,000 and about 40,000 in year two, as you will by then be employing staff. However, you will be generating income from the start, so a budget based on the above for working capital should be sufficient. These costs are intentionally conservative and we will go through them in more detail with you during the disclosure period. But it has to be clear and understood that you may be able to get started for less than this, or depending on your circumstances, it might cost more, so your financials have to be closely considered and made provision for. You will therefore need to research this closely before committing to this opportunity. It is true to say more businesses fail in the early days due to a lack of start-up capital. It is also true to say that banks favour franchise models due to the fact that 95% succeed as they are following a proven business model and have the benefit of the experienced back up. Our model allows you the flexibility to develop some business saving on overhead in the beginning so you can run the business from home or serviced offices, or head straight to the high street. The initial choice is yours, but the aim has to be to become high street established either by the time you have 50 units under management, or within the first year, whichever the sooner. 225000 150000 The Projections The hypothetical projections provided here assume the franchise owner will operate with similar overheads and achieve similar levels of income; actual turnover will depend on the efforts and input from each franchise owner and market conditions, the projections are based on our head office demographic. 7500 1 2 3 4 5 The Disclaimer The figures are for the purpose of illustration only and not intended or should be taken as any guarantee, a full description of the assumptions will be given during the franchise disclosure period. Year Forecast Year Managed portfolio at year end Year 1 83 Year 2 166 Year 3 270 Year 4 374 Year 5 478 - Sales Cost of sales: 55,330 136,240 211,120 286,000 360,880 1,049,570 Management Service Fee Property Advertising 2,617 1,250 3,867 13,624 1,300 14,924 21,112 1,300 22,412 28,600 1,300 29,900 52,783 1,300 54,083 118,736 6,450 125,186 Gross Profit 51,463 93.0% 121,316 89.0% 188,708 89.4% 256,100 89.5% 306,797 85.0% 924,384 88.1% Overheads Marketing & Promotional Costs Premises Costs Motor and Travel Costs Administrator Costs Financial Costs 2,000 10,920 780 8,615 1,950 24,265 4,260 10,920 1,320 24,417 1,650 42,567 4,260 10,920 1,320 40,818 1,650 58,968 4,260 10,920 1,320 52,178 1,350 70,028 4,260 10,920 1,320 52,178 1,350 70,028 19,040 54,600 6,060 178,206 7,950 265,856 Net Profit before tax 27,198 49.2% 78,749 57.8% 129,740 61.5% 186,072 65.1% 236,769 65.6% 658,528 62.7% 12 13
Recruiting and Growing the Business Training and Support As we have demonstrated in this booklet, the rental market is going from strength to strength and the demand for rental property is clear. This is driving many landlords and investors to either enter the market, or increase their portfolios. In addition to this, it is a fact that the majority of landlords in the UK only own two properties; the one they live in and one they rent out, over 500,000 of which are not under professional management. The PRS is made up of approximately 3.5 million homes and it is predicted that by 2018, one in five households in the UK will be renting. We will train and show you many techniques and methods of identifying your customer base and how to capitalise on the opportunities available. But to take advantage of this guaranteed growth you have to be in it to win it! We will then come to you and spend a whole week working with you in your environment, helping you set up the operation, introducing the systems and procedures, advising on issues such as furniture, fittings, layout, advertising, marketing, recruiting staff, thereby allowing you to establish the operation and procedures of a successful lettings office. We will assist you in implementing your marketing strategy and guide you in recruiting your clients. We will work on some telephone techniques and by the end of this intensive training you should feel confident enough to get started. Much of the training is based on the core business activity of lettings and management but we will also train you in other general property aspects, such as investment sales, lease options, rent to rent, sell and rent back and our comprehensive training will prevent the need for you to pay to attend various courses to gain this knowledge. This is all included within your training package FREE as we want you to have as many tools available for you to utilise and assist in your success. 1 in 5 households in the UK will be rented. We give you our guarantee we will be with you throughout your journey with us! Training and Support Training is a vital ingredient and why we dedicate so much time to it. We will assess your needs and develop the training program around you. For example, if you are new to the industry, you will spend ten days in-house training (local accommodation can be arranged for you). During your stay we will go through a programmed series of training sessions and often based on a 1-2-1 basis, covering many aspects of the industry. You will get the opportunity to visit and meet the local branch owners and work with them out and about, thereby experiencing the daily activity for real. Ongoing Development Whilst a background and passion for property would be beneficial, it is not necessary, as we will train you in all aspects of the business. We will be available throughout your business journey with us making sure you are kept informed of any changes in legalities, highlighting other training opportunities, such as industry specific courses, regular webinars, along with regular in-house meetings to ensure that the entire team can all get together and pass on best and most successful practices. You will be introduced and trained on our market leading software and spend time training and operating it, We will also introduce you to many legal aspects of lettings, documents and notices, such as the legal function of a Section 21 notice, the development and segments of an AST (assured shorthold tenancy agreement), rent collection, client accounting, laws regarding landlord obligations with gas, electricity, EPC s, furniture, fire safety and much more. Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 14 Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 15
The Enquiry Process If you are interested in taking advantage of this emerging inflation proof business, then begin by completing the enquiry form at the back of this booklet and return it to us, either by scan or post. This does not put you under any obligation but does help us to assess your suitability and availability. Applicants who meet the criteria will be invited to a meeting at Head Office, where we will discuss in more detail the figures and the potential of this business opportunity, along with the chosen territory, some demographic information and timescales involved. Following the meeting, you will need time to consider the opportunity further, discuss it with your professional advisors and family, research the market place in your chosen territory, which will no doubt raise further question for us all to talk through. At NO time will you be put under any pressure to make a decision. If you do make a decision in favour of this business, we will send you a decision in principle and intent to proceed letter at which point the deposit will fall due. Whilst Go Direct Lettings will provide the training in all aspects of the operation, we still need to consider your aptitude and suitability for this business. We are entrusting our good name and brand with our franchise owners, whilst investing our time and resources in them, so, naturally, we need to be confident in your ability and willingness to further develop the brand. We have a clear understanding what it takes to make a good franchisee in this industry and as franchisee selection is important to the success of all concerned, we are prepared to take the time and trouble to find the right partners. Are you dynamic, dedicated and determined to succeed? At NO time will you be put under any pressure to make a decision. Talk to us today 0151 601 9444 info@godirect-franchise.com DO YOU HAVE THE THREE D S? Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 16 Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 17
Be your own Boss Being your own boss can be a difficult and challenging experience, but also an extremely rewarding one; making your own decisions, building your own business, taking your future in your hands and being in control of your own destiny, what could be more rewarding? It is comforting to know, however, that you have an experienced mentor in the background, who is available to share the difficult decisions with you and help you to make those decisions based on past industry experience and unbiased opinion. So, if you are already in the industry and fancy a change, you are considering starting your own business, facing redundancy, early retirement or indeed just want a change of direction and you think that this could be the opportunity for you, then contact the Go Direct Lettings Franchise Team to take advantage of this growing, inflation proof business and start following your road to success. Meet the Team Don Holmes Managing Director CRLM Dip Don has been in business nearly all of his working life. He started investing in property in the mid 1980 s and whilst building a substantive property portfolio in the UK and abroad, has amassed a wealth of experience in the property industry. Don and Lynda formed their first Property Management company in 1992, developing it regionally from a standing start to managing over 1000 properties from one office. After a successful sale in 2006, this allowed Don and Lynda to go abroad where, against the financial odds at that time, they built and developed a small hotel and invested in the international property market. In 2011, they formed Go Direct Lettings Franchise Group, with the ambition to grow the group and deliver the franchise model throughout the UK. They now offer their vast experience in this very lucrative market place to other suitably dynamic and versatile business people. Don studied and qualified for the Certificate of Residential Lettings and Management and sat the exam at Leeds University and become a fellow of the National Association of Estate Agents. He continues to study, attending continuous professional development training, ensuring he maintains his professional profile and offers the most up-to-date training to others. Lynda Holmes-Kelly Director Lynda started her working career in the banking industry, covering many systems of general and international banking, before in 1987 taking a career break. She returned to the UK in 1990, when she met Don and so followed a personal partnership and marriage, along with the opportunity to assist and develop their property letting and management business. Lynda was able to use her considerable administration and accounting skills within the new company and with Don s background in property, they were able to offer a comprehensive management service to other landlords. Lynda s role in the Go Direct Lettings Franchise group is administrative control, accounting and supporting the training of the team in use of the software and accounting systems. Laura Asimakis-Mundy Franchise Manager Laura has been in the industry for over 10 years, working for a few different companies and gathering valuable experience in all areas of the business. Laura also studied and holds the NFOPP qualification in Residential Lettings and Property Management. Laura s role is to recruit and assist new franchisees, as well as helping to develop and support our existing franchises. Go Direct Franchise Team Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 18 Talk to our Franchise Team today Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 19
Ask a question... We have kept this section blank for you to write down any thoughts or questions you might like to put to the team when you call. Preliminary Application Form I have read your prospectus and would like further information about the Go Direct Lettings franchise. Please contact me to arrange a meeting (Please complete the details below, circling the relevant answers): Name: Home Tel: Email: Daytime or Mobile No: Address: City: Postcode: Country: Date of Birth: Current Situation: House Owner: Tenant: Martial Status: Married: Single: Divorced: Does your spouse / partner work? (if applicable) Yes No Dependants: 0 1 2 3 4 5+ Current income band: <24K 25-50k 50-70k 75k+ Do you own, or have you ever owned a business? If Yes please provide details: Yes No How long in business? How do you propose to fund this investment? Where in the UK are you interested in operating? Signed:..... Print Name:..... Date:....... Go Direct Franchise Team GO directfranchise.com Call us now on: 0151 601 9444 Or email us on: info@godirect-franchise.com 20 Please note that this questionnaire is for general information and will be used initially in assessing your suitability to become a Go Direct Lettings Franchisee. It will be treated in the strictest confidence under the terms of the Data Protection Act and does not place you under any obligation whatsoever. Further information will be required should a mutual interest develop. Head Office Top Floor, Maple House 3 Cleveland Street Birkenhead Merseyside CH41 6ND
0151 601 9444 www.godirect-franchise.com GO DIRECT FRANCHISE TEAM info@godirect-franchise.com Head Office Top Floor, Maple House 3 Cleveland Street Birkenhead Merseyside CH41 6ND