Business LeadershipElite Agent

Leading a franchise during a pandemic

We all watched in horror as Wuhan in China was consumed by the Coronavirus (later  renamed COVID-19) in the first few months of 2020. We saw the chaos, the heartbreak, the  overwhelmed hospital system and what looked perilously like a breakdown of society.  

By early March, it was evident that this deadly virus was spreading worldwide and that it had reached Australia. A closing of our borders and a State of Emergency soon followed with State Governments enforcing restrictions on people and businesses. 

Planning to put our business into “hibernation” to try and imagine what the future would  look like and what we had to do to come out the other side with a viable franchise, was daunting.

The Federal Government was putting in place support measures and talking in terms of a six-month period. So we planned for a six-month period of very limited activity. 

The real estate industry had already suffered a period of a depressed market with factors like the Royal Commission into banking and the looming Federal Election (with issues such as negative gearing) all contributing to a lack of consumer confidence and limited real estate  activity.

It wasn’t until the Coalition was returned to government in May 2019 that we saw  a hike in consumer confidence and a pick up in the market.

Of course, taking a house to market, selling it, and then waiting for the property to be settled is a process of up to four months, so it’s fair to say that many of our offices didn’t see an increase in revenue until September 2019.

This equated to only six months of decent activity before COVID-19 hit.  Therefore we knew that some of our offices would not have great cash reserves and could be vulnerable. 

During the planning stage, we didn’t know what the restrictions would mean to our  industry.

Would we be totally closed? We assumed that if we weren’t there would be minimal activity. I mean who would buy or sell a house during a pandemic? 

We had already embarked on an ambitious project to introduce the technology that gave us  the ability to carry out an end-to-end virtual transaction.

We had also invested in a comprehensive marketing templating system plus a full-bodied intranet where our thousand-odd employees could access all the information and documentation they needed. 

So we were well placed for working from home, working with social distancing, carrying on business at arm’s-length. 

We recognised immediately that the ongoing survival and prosperity of our franchisees was  paramount. The first thing we did as the franchisor was to reduce our franchise fees by 25 per cent  for February and March when business was strong, prior to the impact of COVID-19.

This meant that they could retain more cash in their business for what we predicted would be very  difficult months from April to June.

We then discounted franchise fees by 50 per cent for sales made in April, May and June to provide further relief and support to help them survive a very challenging period. 

We also worked with our long-time suppliers to negotiate discounts for an agreed term that we could pass on to our franchisees.

It was very gratifying how many of our suppliers were  prepared to help – not just with initial discounts, but with a real willingness to help us when we needed to accelerate programs to get innovative products to market quickly to meet the needs of a constantly changing landscape. 

When the lockdown was announced and the actual details of the regulations trickled out, then our hard work as franchisors began. 

Real estate is a very heavily regulated industry. The legislation and compliance requirements  around our business are complex.

Fortunately housing was deemed by the Victorian Government as an essential service and so we were allowed to trade through the initial lockdown in a limited fashion. 

As soon as the rules were released we began summarising and imparting the information to our franchisees.

We had a daily communication going out from me which provided all the details we had been able to glean from industry bodies, discussions with government and other sources.

When it became evident that a large percentage of our people would be  working from home we provided them with Working From Home guidelines and checklists. 

Property management in particular was a minefield.

With the drip-fed regulations around tenancies, no evictions, rental relief, support packages, we had to comb through the legalese and turn it into an empathetic message for our landlords and tenants and  instructions and training documents for our property managers. 

The introduction of JobKeeper was an enormous benefit to all our franchisees but there was  complexity around it – particularly in the area of employees whose remuneration is commission based.

We worked with peak industry bodies and the government to work out exactly how it could be applied.

We then held a webinar to ensure that all our franchisees were across their obligations as far as their staff were concerned – how they handled reduced hours, stand downs etc.  

Nurturing the mental health of our people has been a big worry throughout this pandemic. 

We have provided our franchisees with a lot of resources in this space including links to regular webinars on how to survive and thrive during lockdown.  

Our marketing department prepared information posters for every situation, stressing the requirements for any interactions – social distancing, hand sanitising, getting the messages translated into different languages.

In the early days we had wording around, “if you’ve returned from overseas in the last 14 days” and then quarantining came in and we had to re-do all the artwork.

As the picture grew clearer, the messaging and communication tools for our franchisees to use to interact with the public changed and changed again.

There was an avalanche of documentation created that just as quickly went out of date.

We handled this by putting all the documentation on our intranet – all tagged and filed so franchisees could easily find the latest iteration.

All the emails that had been going out from me daily were tagged and stored on the intranet so that franchisees could go back and find details of an issue that had been covered off. 

Meanwhile, our two founding directors, our Head of Strategic Growth and I called every franchisee to talk through their issues and to reassure them.  

Training was ramped up. We already had the ability to train online, with our head office training room equipped with the cameras and microphones to provide professional remote  learning sessions.  

We bulk ordered gloves and hand sanitiser and then delivered them to the offices so they had the tools to carry out safe inspections.  

New, carefully considered marketing messages were provided to our agents.

Normally real estate marketing is very direct. But we knew that people would judge us harshly if there was a whiff of self-serving in our messages.

If you weren’t solving a problem, people didn’t want to hear from you and of course anything that ended up in a letterbox was suspected of carrying the virus.

But a lot of our offices were really doing great things in the community, offering to collect groceries and medicines for people who were unable to get their own and we needed to get that message out so people could be helped.

The sales results started to come in. And they exceeded our expectations by a long way.

There were people out there who were happy to buy or sell during all the uncertainty and, with our Complete Digital solution and absolute adherence to safety measures, we had shown people they could be confident in dealing with us. 

As CEO, I recorded weekly videos to our client base on what they could do with regard to real estate within the restrictions at that time, my view of the market and also evidence of  the results we were achieving for our clients.

This was then posted on social media, put on our website and sent to our database using an EDM.  

As restrictions gradually eased, business picked up even more.

We provided our franchisees with the required plans and procedures for operating a COVID-Safe office.

We negotiated a  really good price for advertising in the Herald Sun – the major Victorian newspaper – and, with the support of every franchisee, were regularly publishing eight pages of advertising in their weekend Real Estate edition.  

But, we only had a few weeks of sort of freedom from restrictions, where up to 20 people could attend an auction (with appropriate distancing), before there was a major  outbreak of the virus in Victoria, where the majority of our offices are.

We were quickly put into Stage 3 restrictions, which meant we could still operate and then, when this didn’t drive  virus numbers down quickly enough, we were placed into Stage 4 and, for the first time since the virus hit our shore, our franchisee offices were forced to totally close, unable to have any face to face interaction with buyers, sellers, landlords, or tenants.  

It became evident that this period of time was best spent forming relationships with people  who wanted to sell as soon as lockdown finished.

Looking at the New Zealand example, we believed there would be a lot of pent-up demand.

We devised a detailed method of  providing a Virtual Appraisal that really gave potential sellers the best possible opinion on what their home might be worth so they could do some planning.

We educated the agents on how this was to happen and publicised it through social media and EDMs to our database.

We rolled out an Exclusive Preview functionality on our website that allowed sellers to test the market within the limitations caused by not being able to have our normal supplier provide the high level of marketing that we required.

Exclusive Preview allows buyers to view the property online (once they have registered and we have their details) and indicate their interest in viewing the property once restrictions allow.

We applied a similar marketing strategy to publicising this. 

We created a WhatsApp group for our franchisees and this allowed them to share their successes and their strategies.

We have had amazing results with virtual auctions and the media showed a real keenness to hear these stories.

By surveying our franchisees on their  activity weekly – properties listed, sold etc. we were able to provide the real estate media with great stories, and continue to lift our profile. 

Meanwhile, I joined a group of real estate industry thought leaders as well as the REIV to lobby the State Government to allow private inspections during the Stage 4 lockdown.

We argued that the provision of shelter was an essential service and that there was extreme hardship being felt by people who needed to rent, needed to buy, needed to move for urgent reasons but were unable to.  

Unfortunately at the end of our six week’s lockdown, the numbers were still very high and so the Premier extended the Stage 4 restrictions for at least another two weeks.

There were concessions made to a few industries but none to real estate. We re-commenced lobbying. It became evident that the Chief Health Officer was making decisions based primarily around the movement of people.

If you look at how many people are employed in real estate across Metro Melbourne, it’s many thousands.

But if you look at how many of those  people would be moving around (and then mostly locally), then that’s a significantly lesser number.

We met with senior members of the DHHS and they really listened to us, asked a range of questions and asked for further data.

We were able to demonstrate that there had been no case of COVID-19 as a result of a private inspection.

We qualified and re-qualified our numbers to assist the government in their predictive modelling to help map a path forward.

Most importantly, we devised and submitted to the government a detailed plan for agents to use that would maximise the safety of anyone who attended an open.

Then,  after hours of strategising, lobbying and number crunching we held our breath. 

On Sunday, September 27, the Premier announced a further loosening of restrictions including allowing agents to carry out private inspections.

It was a significant step forward, however we had also been lobbying for the ability to conduct appraisals and it was bitterly disappointing that this hadn’t been included in the new restrictions.

However, on the Monday, further communication with the government saw the ability to carry out appraisals, under very strict (but workable) guidelines, added to the list of allowed activities. 

That’s all we needed as an industry to continue to function. 

As I write this, virus numbers are dropping slowly, and there is real hope that we have almost beaten this second wave.

I am amazed at the amount of activity our franchisees have been able to achieve using the tools we have provided them with.

I have confidence that our franchisees will survive this in good shape.

We have not lost a franchise during this crisis and if we are able to soon operate under more relaxed restrictions then I am confident we won’t lose any.

We were fortunate that we were a long way down a technology path before COVID-19 hit, but we’ve also been able to be innovative and be really agile in rolling out initiatives.

The most important factor has been the quality of our franchisees and the  amazing culture within our group.

The willingness everyone has shown to help each other, share their tactics and just boost the spirit of their colleagues has been amazing. I am blessed to lead such a group.

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