Frequently Asked Questions

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Franchising is becoming an increasingly popular business model, but for many this is still an unknown quantity –particularly estate agency. Here, in layman’s terms are the answers to some immediate questions. Serious candidates are invited to contact Casas Espania Membership direct to discuss.

Why should I pay out good money to join your organisation, and pay you any ongoing charges, when I can set up myself for nothing and keep all of my commissions to myself?

Well this is a good point, Firstly, instead of a upto a 50/50 split of the commission when you work with other agents, Casas Espania will give you a more generous split.
The Casas Espania Franchise opportunity presents the perfect fast-track platform to build your own professional real estate agency business in your own exclusive territory but allowing you the ability to network with other members of the company so sell from other Associate’s territories and have other members help you to sell from your portfolio. This means that you will have a greater turnover and keep more of the profit than you would if you worked alone or for another estate agent or even took out a franchise with another real estate company.
Along with our training, our full internet and marketing package, designed for maximum lead generation, the credibility of our branding and our complete support package means that all of the hard work has already been done for you, so you’re off and running from day one.

What exactly is franchising?

Technically a franchise is a licence granted to an individual or firm to run a business in an assigned territory using another firm’s proven brand and systems. In reality, while it is all of these things, it is also a Membership between the franchisor and the franchisee which, although underpinned with a legal franchise agreement, is dependent for its success on the delivery of the products and services by the franchisor and the continuing commitment and motivation of the franchisee.

What costs are involved in franchising?

Specific to a franchise is the Initial Franchise Fee, which is paid on completion of the signing formalities, and thereafter on a monthly management service fee or royalty paid as a percentage of gross revenues earned.

Are there any other franchise costs?

It is common in some estate agency franchises to introduce additional charges for technology, training etc, and require franchisees to buy through a central buying system. The principle in Casas Espania Membership is simple – no additional charges unless these originate from a third party supplier, in which case these are passed onto the franchisee at the same competitive cost borne by the Casas Espania organisation itself. There is no obligation to participate in the buyer programmes – although again it is likely that Casas Espania will obtain lower prices than individuals can achieve by themselves.

I can see it works in McDonalds, does franchising really work in the service sector?

The estate agency operating environment in Spain is becoming ever more complex and the industry has to embrace new concepts in marketing and applied technology in a very competitive environment. There is also the increasing burden of regulation, both specific to the property sector and generally in recruitment and compliance. In the light of these developments, the concept of operating a services sector business under an established brand with full regulatory and commercial backup and support becomes even more compelling.

So what are the critical success factors for a franchise?

It always boils down to the right people – and the right office location. If the franchisor delivers its side of the bargain, the success of the business thereafter will be down to your motivation, your commitment and your skill, applied consistently to achieve first class results. The relationship between the franchisor and franchisee is also important. Both sides must feel good about this from the outset and it must genuinely continue to be an ‘I win you win’ proposition.

How much money will I need to set up an estate agency franchise?

In addition to the modest initial franchise fee, you will need to run your own four-door car, preferably white or black, which we will brand in Casas Espania livery at our cost. In addition to this you will need a mobile phone and a suitable inexpensive composite printer/copier/scanner. Laptops will be supplied and configured (at cost price) with the application software and Microsoft office, sale boards, first run of business cards will all be supplied by Casas Espania. Bear in mind that in Spain, as much as 180 days can elapse between the listing of a property and the completion of its sale – the point at which the agents receive their commissions so you will, of course, have to budget for your living expenses until your cash flow provides you with a regular income.

There will be other set-up costs for your bricks and mortar office, in particular re-decoration, wiring, lighting, fittings, furniture, computers and phones. From this point there is also the need for working capital to run the business until the income streams materialise. Although this will vary according to the office size, location, current market conditions etc. We expect that Full Member franchisees will need to fund about €100k-€120k to cover one-time costs and 6 months working capital

Casas Espania has established a working partnership with La Caixa who will consider lending around 50% of required funding under the ICO scheme analogous to the Enterprise Finance Guarantee in the UK, subject to satisfactory conditions being met.

On this basis individual franchisees should be looking to provide between €50k & €60k from their own resources.

Why is Casas Espania engaging in franchising?
Casas Espania has always been a growing organisation and expansion of its office network through franchising is consistent with the implementation of that strategy; it also provides a bigger distribution platform for ancillary services such as conveyancing, financial services, surveys and foreign exchange money transmission etc. This of course is also beneficial to the franchisee.

How long can a Casas Espania Membership Franchise last?
The initial term is for five years with an option to renew at the end of that period, subject to the franchisee’s continued compliance with the terms of the franchise agreement. Casas Espania charges only a nominal renewal fee for extensions of its franchise. It also provides a network of like minded business people working together for the benefit of each other.

Tell me more about the Casas Espania Membership Franchise Agreement
The franchise agreement is the legal safety net underpinning the obligations of both parties. While this is an agreement between two parties, certain clauses and obligations are in place to protect the Casas Espania Membership network as a whole. The Casas Espania Agreement is presented in identical Spanish and English versions and has been drawn up by Spanish lawyers with substantial franchising expertise and their thumbprint of approval means the agreement will be well balanced, comprehensive and current.

What do I get apart from the brand?
A franchisor (Casas Espania) delivers backup support and expertise to its franchisees, in addition to the brand. In the case of the Casas Espania Property Membership the benefits are too numerous to list here but can be classified under the following headings;
•    ‘plug-in’ access to additional business activities
•    cheaper resources
•    sales invoice services
•    training
•    technology
•    marketing
•    business advice
•    and the ability to be able to refer business within a large  network.
Full details of these will be made available to serious prospective members.

Are there any restrictions?
Franchises are characterised by the setting of territorial limits. In the case of estate agency, such limitation can become inhibiting as it is hard to set limits on where a franchisee can sell properties as opposed to where its office is located. Although territorial limits are set, the Casas Espania Membership does take account of commercial realities and the natural boundaries of property market places. Casas Espania Members are barred from participating in any other estate agency businesses outside Casas Espania Membership; this is common sense and standard to all franchise systems; franchisees clearly could not be allowed to use the system skills and advice outside the chosen franchise in a common or competing business. Franchisees are at liberty to engage in other business activities outside the property sector subject to demonstrating total commitment to developing the designated franchise office.

Can Full Members open additional offices?
The Casas Espania Membership mission is to ‘Help Its Members Grow Their Businesses’, so the opening of additional offices is a natural extension of this and an obvious way forward. The long term view will form part of the discussions prior to signing.

If commercially judicious, franchisees may open additional offices but each is subject to its own franchise agreement. Casas Espania Membership will offer options on additional office locations from Day 1 subject to an option agreement and time limits.
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Do I need to be an estate agent?
The Spanish residential property market is currently an unrestricted and often turbulent operating environment. While not mandatory, property sales experience is desirable; demonstrable sales competency is mandatory. Full member entrepreneurs from outside the sector would, if not suitably qualified, will be required to recruit experienced personnel.

What are the principal Business Activities?
Residential Sales is the core business activity of an estate agent, the appeal for Casas Espania Members is that they can participate in additional business activities on a ‘plug and play’ basis without the time, effort and money required for invention and long lead-in times. The Casas Espania Membership allows these to be optional activities but if adopted must operate through the established Casas Espania systems on a referral basis.

What’s the process for becoming a franchisee?
Both sides need to agree to a series of meetings to establish mutual intent and reach a point where an informed decision to proceed can be made. This involves an interview process to establish the credentials of the prospective franchisee, presentations of Casas Espania systems together with validation lists, a basic financial forecasting session to establish one-time set-up costs and future profits based on local market assumptions and other criteria. Once there is a handshake, there follows a mutual due diligence programme followed by a completion of the formalities. The implementation programme follows immediately. If both sides are serious, the process from enquiry to signing may take four to six weeks.

What costs are involved in franchising?
Specific to a franchise is the Initial Franchise Fee, which is paid on completion of the signing formalities, and thereafter on a monthly management service fee or royalty paid as a percentage of gross revenues earned.

Describe the implementation programme
Associate members are inducted by participating primarily in sales, compliance and technology training together with coaching in the operating environment of their own territory.

This depends on whether the franchisee has office premises already in place. If so, a suggested launch date is agreed and the implementation programme covering office profiling, recruitment, pre-launch marketing, technology integration, induction training, financial plan etc. is implemented with specific responsibilities on both sides.

I’m a prospective Member; I don’t have premises but want to proceed
This is quite a common situation. If both sides want to move forward, we will help the franchisee acquire offices and give advice on lease negotiations, planning, licensing, branding, IT systems etc. thereby recreating Casas Espania in your desired office.

I’m interested, I think I qualify, what do I do next?
Look yourself in the eye first, and tell yourself that you have addressed the ‘who, what, where, why, when, how, and how much?’ associated with this commitment – and then make contact with us by phone or e-mail. We understand you still may be currently employed and assure you of total discretion and confidentiality.

Who do I contact?

Spain

Gareth Whittington

Tel: (0034) 669 36 69 96
gareth@casasespania.com

Helen Butterfield – Tel. (0034) 678 75 66 48

helen@casasespania.co.uk
franchise@casasespania.com