The UK’s largest property franchise group says the current Coronavirus crisis shows precisely how robust its franchise business model is.
In a statement to shareholders, Belvoir Group’s chief executive Dorian Gonsalves says: "Having reported significant growth in 2019 and got off to a good start in Q1 2020, it has been hugely frustrating for the group not to have been able to build further on this momentum due to Covid-19. However, the current climate has proved once again just how robust and resilient our franchise business model is.”
He continues: ”Belvoir benefits from a high degree of recurring revenue with 61 per cent of gross profit derived from lettings and just 16 per cent dependent on estate agency. Meanwhile, our financial services division has a substantial client base to which we sell a wide variety of financial products, with no excessive dependency on new mortgage sales alone.”
Gonsalves adds that unlike a corporate model, Belvoir draws on “the resolve and entrepreneurial spirit of 308 franchisees and 175 financial advisers, all of whom are motivated to sustain their business throughout this period, and to return to growth and succeed long term.”
At the end of last month, Belvoir’s rent arrears survey of all franchisees revealed that fewer than five per cent of tenants were in arrears compared with the usual two per cent experienced by the network.
During April the group’s estate agency wing completed on around a third of usual transaction levels, drawing from the pipeline of house sales agreed prior to the lock-down.
“The overall April performance for the group was significantly stronger than had been anticipated” says a company trading statement.