Paul Davies, CEO and Founder of One Agency Real Estate Group, has forecast the failure of high overhead businesses and particularly franchises as many areas head into uncertain market conditions and economic times.
Speaking from the 300 strong Australian and New Zealand-wide group’s headquarters in Sydney today, Mr. Davies predicted that high overhead businesses will struggle in a slowing property market, where the rate of price growth for residential properties has diminished in recent months, less turnover of properties, and pressure on maintaining agents fee levels as competition to survive increases.
“Franchise offices in particular have added overheads, and may have difficulty maintaining the narrow profit margins, creating added stress to meet their high overheads,” he says.
“I believe that many offices will close. The first will be ones with the slimmest profit margins, gradually followed by many others. I would go as far as to suggest, some franchises groups, that struggle to provide a fair exchange for fees, where their franchisees cannot justify the costs, will become irrelevant and cease to exist.”
Massive change is inevitable across all sectors of all economies.
“The global trend is for better and cheaper products and services, and this cannot and will not be isolated from the Real Estate franchise environment. Massive change is inevitable across all sectors of all economies.”
“We attract very motivated agents to our brand,” says Mr Davies, “some members are new to business ownership and some are already established and bring their franchise agency to us seeking change. Business owners want relief from franchise constraints and costs, which consume profitability and increase the risk of survivability.”
One Agency business owners are able to react much quicker and in a far more autonomous manner than those who own traditional real estate franchise businesses.
As a result of the sensibility of the model and value packed options, One Agency Real Estate group, has become Australasia’s fastest growing brand, steadily gaining popularity since opening its doors in 2008.
At One Agency we are always open for a conversation and very happy to help if you have any questions, obligation free and in complete confidence, so please contact us.
T 1300 79 23 88
T +61 2 8039 2110 (International)
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