Founders of franchising: Andy Goodson - Northwood
Qualified pilot, musician, property developer and founder of Northwood Franchises, Andy Goodson looks back over a varied career which sees him taking semi-retirement in Thailand at the end of next year.
Early retirement at 53 beckons for Northwood's Founder Andy Goodson, who has built a five star retreat in Thailand (pictured) in which to enjoy the fruits of his labours. With six bedrooms, a swimming pool, a hot tub, a recording studio and accommodation for three maids, Andy will be living the life of luxury at the end of 2007 as he hands the business over to his daughter Gemma.
'I've built a very good legacy for my daughter'
'I generated all my wealth from the success of Northwood, and am looking forward to enjoying the standard of living, the weather and the people in Thailand,' he reflects. 'However, I will probably get bored and start another business, so it's only semi-retirement!'
Andy formed his first company at the age of 25, leaving a job as a sales rep for a builder's merchant to set up a plumbing and heating company in competition. 'I was in my arrogance of youth and felt I was sharper than anyone I was working for or selling to,' he recalls. 'However, they were making more money, so I thought: 'I can do this myself!' The business went really well and I branched off into retail by turning my storeroom into a shop and selling kitchens and bedrooms.'
The retail side of the business took off and three years later Andy had opened five more shops. 'I decided to build a four bedroom house for myself and sold it when I was 28 for a £26,000 profit,' he says. 'I was so impressed with the money to be made in property that I sold the other companies to concentrate on property development.'
So far, so good, but the major recession at the end of the '80s interrupted Andy's good run. 'I'd put all my eggs in one basket and with interest rates rising up to 14 per cent the property market disappeared,' he continues.
'Everything I'd been working so hard for was lost, and I spent a couple of years licking my wounds.'
Andy turned to his musicianship to support him, earning his money playing live gigs as a bass player. However, the business itch returned and he found himself contemplating residential lettings. 'Having caught a cold once in business, I wanted to look at a concept where I didn't carry any stock,' he explains. 'Also, most companies do 80 per cent of their business with 20 per cent of their clients which is dangerous - I wanted my business to be evenly spread. My background in property management caused me to look into residential lettings and I realised if I am managing 250 properties and a landlord takes his property off the market, I've only lost 1/125th of my business.'
Andy set up Residential Lettings in Portsmouth in 1995, and four years later began franchising the business. 'The biggest challenge in doing it yourself in any business is recruiting the right calibre of people, keeping them and keeping them motivated,' he explains.
'With franchising the franchisee is motivated by their ownership of their business. The challenge is to find the right calibre of person, ideally someone who is looking to build a business.'
Andy awarded a pilot franchise in Southampton in 1999 to a business colleague who had already built a successful business, to iron out the franchise concept. The franchise programme then kicked off proper with the signing of three franchisees in Northampton, Romford and Milton Keynes.
'At this point the business was still called Residential Lettings and I recognised the need for a brand,' says Andy. 'I asked the franchisees to choose a name with the provisos that it should be easy to pronounce and not related to property. The Romford franchisee came up with the name 'Northwood', which he took from a computer company on his street that had just gone out of business. With the brand in place I placed an advertisement in The Franchise Magazine and began recruiting a national franchisee network.'
Northwood currently has 39 offices open, with 17 more in the pipeline including two company-owned locations. 'Our aim is to have 100 branches open nationwide, but not necessarily through 100 franchisees,' Andy reveals. 'We are encouraging our franchisees to open multiple branches, which is easier for us from a management perspective and, more importantly, enhances the value of our franchisees' businesses.'
In his time as Managing Director Andy has evolved the business to capitalise on the success of the lettings side. 'Three years ago we were purely a lettings company but we have now expanded into estate agency,' he explains. 'We were losing business when landlords on our books decided to sell their property, and we were passing business on to estate agents. I thought: 'This is crazy, why don't we do this ourselves instead?'
'We had the client base, but not the expertise so I headhunted Nick Cooper, who was a National Franchise Manager for an estate agency franchise, who joined us in February 2004 and helped us structure an estate agency add-on to the existing business. We launched it with a new franchisee in January 2005 and by re-training existing franchisees have introduced it across the network. The franchisees are very keen because it puts more money in their pockets.'
Reflecting on his time as a franchisor, Andy advises other companies considering franchising their business not to expect success over night. 'A good franchise business takes time to build - a lot longer than a normal business,' he reflects. 'However, the rewards are much bigger at the end. The important thing is to be selective of the franchisees that you choose. We've had people keen to buy a franchise with all the money in place, but have rejected them because we've felt they wouldn't make a success of it.'
On the cusp of his retirement from the business, Andy reveals that the process of preparing the business for his departure has been ongoing for three years. 'An exit strategy is something that people don't think too much about, but sensibly everybody should have one from the day they start. Over the past three years I have not only been building the business, but also putting in place a head office team that can run it effectively without me.'
An important component of that team is his daughter Gemma, who joined the business in 1997. 'It's been absolutely great to have her involved,' says Andy. 'Her efforts have helped me get the business where it is today and, from a parent's point of view, I've built a very good legacy for my daughter.'
Interview by Stuart Anderson