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Twenty questions

publication date: Oct 31, 2010
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Dominic Agace, CEO, WinkworthQ Founded in 1835! Winkworth must be one of the oldest agencies in the UK, where did it all begin?
It all began in Mayfair, marketing country estates and providing accommodation for those coming to town for the season.

Q Aside from the obvious financial perspective, has becoming a PLC brought any other benefits?
The main benefit is the profile it has added to the business. It has also brought momentum to all parts of our business as we now operate under the pressure and spotlight of the public market. This makes us a better and more dynamic organisation.

Q How many branches do you have now in the UK and overseas?
58 in London; 19 across the rest of England; 11 in Portugal and France.

Q What are your main target locations for growth?
We are looking to grow in national and international markets that complement our existing network and in particular our extensive London coverage.

Q The Wall Street Journal reports that you are looking at acquiring another brand. Is that true?
We are looking at franchise brands that operate in different market to Winkworth. This way we can use our skills and add to our speed of growth and overall UK market share.

Q Opening overseas branches is a dream for most UK agents, so how do you do it? Are your overseas branches franchises too or are they corporate branches?
It is a mix. We have brought in companies to create an initial platform, in countries such as France, and we have converted existing agencies such as in Portugal. There is no one size fits all approach, and we use the full array of options at our disposal to grow the business. That said, our approach is driven by looking to work with the great operators in all new markets national or international.

propertiesQ Do UK staff go over to work in Portugal or Provence?
There is some movement between offices as negotiators look for wider experience in different environments, but no long term moves are being undertaken currently.

Q Are all your new branches franchises now?
Yes we have believed in a pure franchise model for many years, to mix up the business can lead to conflicts of interest, and having a pure franchising model allows us to focus and invest in the platform we provide to franchisees. This is particularly important in difficult markets, when loss making offices may detract from the resource that could support franchises.

Q Some businesses ‘convert’ to being a Winkworth franchisee. Has that proved a popular concept?
This has happened in a number of cases, and it is an area we would like to develop as a method of growth as we feel our model is perfectly suited to add value to existing independent agencies. In essence, converting to a Winkworth franchise can help those agencies that are currently not in the top three agencies in their town, in terms of being called out to value a property, to be in the first three calls. It also helps these agencies to break past the price ceiling of £1m on their instructions. We have also raised funds as part of our listing to invest in independent agencies to help re-capitalise good agencies in this difficult market.

Q Is it difficult to find good franchisees who have enough money to establish a business?
It is more difficult now that bank lending has tightened. However, we received 82 applicants to the end of August up from 32 over the same period in 2009.

Q Some franchise operations seem to have the occasional disaster with franchisees but we haven’t heard of any problems with Winkworth. What do you do to make your system secure, avoiding issues like fraud?
Any company, corporate or franchise, can have a disaster if they get the wrong person involved in their organisation. We, as the franchisor, work extremely hard to try to ensure that we minimise this risk through a stringent application process, as well as ongoing audits and compliance checks across the network, with all franchisees required to join the regulatory bodies that are available. We believe in promoting the highest standards of service.

Q Do you believe that there should be a greater responsibility held by franchisors for the behaviour of their franchisees?
All in the franchise industry should always strive to ensure the best standards are being met by their franchisees and their own team. In the end if they don’t they won’t succeed. However, this needs to be balanced with the fact that franchisees aren’t employees, and should not be treated as such. Recruitment plays a vital role.

Q One comment I received regarding a fraudulent franchisee was that franchisors just take their cut and don’t care if the franchisee fails or defrauds and leaves landlords and tenants in trouble. Do you think that view has any justification?
I think if the franchisee or anyone is fraudulent then there is no excuse.

Q How do you train new franchisees to ‘work the Winkworth way’?
We have an extensive training academy that provides training only limited by availability. We also provide start up guidance and support through the franchisor and established and successful co-franchisees.

Q Are some new franchisees from entirely different industries?
We only look outside of the industry to recruit if there is real talent there, and this is and will remain a very small minority, as we are aware of the real skill involved in being a good agent and the time it takes to hone that skill.

Q Do all franchises have to offer sales and lettings or can they choose?
Bar exceptional circumstances, yes. We believe they are both important parts of a successful agency providing a counter cyclical income and lots of cross benefits for the business. Without offering both it is hard to really dominate a local market in either skill, and so earning potential is lost.

BayswaterQ In a fairly rapidly growing organisation it can be easy to lose sight of the core position of a company. Winkworth is traditionally seen as middle towards upper levels in house prices/locations – do you have to be careful where you open to protect that market position?
Our aim is to continue to open offices in markets that complement our existing network and so markets, where we can add significant value to our clients. This is our overriding focus that will continue to define our profile as an agency.

Q This is very relevant considering your new country house department. Does this new move signal that you want to take the company upwards to being like, say Knight Frank or Savills, only dealing with top end property?
The Country House department is there to add to our offering to sellers and buyers, bridging the link between our London clients and country offices. It is has not been set up to change our profile, but instead to enhance our offering to our clients and the support we provide our franchisees.

Q What is your prediction for the market in 2011 in sales and in lettings? Do you expect an improvement or is it more of the same frustrations to come?
We expect volumes to remain low but there to continue to be opportunities to put talented people and great sites together to open new profitable Winkworth offices in key towns and cities growing our market share in the national property market.

Q And finally, what is the best thing that has happened to Winkworth this year?
No one thing, but many highlights, such as beating our income expectations, opening 6 new offices so far this year, increasing our share in the family house market, and launching the Country House department. We have met – and continue to meet – really good quality agents to grow our business with so far and hope to continue to do so by improving the support and the competitive advantage we can provide our franchisees.