The Patterson File: Happy Birthday Northwood
As Northwood completes its 10th year of operations, Gordon Patterson interviews its head office team
Gordon Patterson: Congratulations on completing your 10th year.
Andy Goodson: Thank you. We've just celebrated our 10th anniversary, having opened our first residential lettings branch in Portsmouth in 1995.
GP: How many offices do you currently have open?
AG: We have 28 branches trading with a further six where premises have been secured and launches are imminent. We have branches from Edinburgh to Southampton and from Plymouth to Norwich, and we have a further 15 franchisees in the pipeline who are seeking to open branches in the next year.
GP: What do you perceive is Northwood's position in the residential lettings sector?
AG: Our brand is developing into one of the most exciting brands in our sector because of our unique Guaranteed Rental Income Scheme and because we offer all three services: Lettings, Sales and Financial Services.
GP: How long have you been offering these three services?
AG: We introduced sales and financial services 15 months ago in response to our customers' requests and to capture those landlords who wished to dispose of their properties. With the changes in pension taxation next year this positions us perfectly to take advantage of market conditions and complement what we already do.
GP: How would you summarise the distinctiveness of the concept?
Nicholas Cooper: Very easily - it's our Platinum Scheme, which is our guaranteed rental income scheme. This product, in its current format, is unique in the UK and generates double the profits of traditional lettings schemes.
GP: Visiting your Portsmouth company-owned operation I was phenomenally impressed by the strength of the Northwood brand portrayed there. Have you focused on branding recently?
NC: We consistently monitor the performance of our branding and engage professional designers to assist in this vital part of the business. The presentation of the brand says so much about who we are and how, as a customer, you can expect to be treated.
GP: What do you have in the way of company-owned operations?
Gemma Goodson: We have three branches: Portsmouth, Southampton and Bournemouth. We see it as vital that we implement the good practices of our franchise model in our own branches and they are trading exceptionally well.
GP: In general how is trading within your franchisee network?
GG: Recently, two branches have broken the £50,000 per month gross profit barrier on lettings alone. Our Edinburgh branch achieved a gross profit of £270,000 for its second year of trading on lettings. In its eighth month of trading our Plymouth branch earned a gross profit in excess of £28,000 in one month. That is exceptionally good and a result of the implementation of sales and financial services to our core business, which is lettings.
GP: What kind of people are suited to be Northwood franchisees?
NC: We're looking for people who want to build big businesses, not people who want to learn how to be lettings or estate agents. We want determined, self-motivated individuals with a credible background and we will work with these people to achieve this.
GP: How much money is needed to finance the franchise?
NC: For our business model you need an investment and working capital of between £100,000 and £150,000 depending on location. Franchisees therefore need at least 30 per cent of the total cost.
GP: Could you briefly outline your training programme?
NC: The initial training programme is an intensive six-week course. Three weeks are held in a training room environment, one week is spent in our company-owned branches with one-to-one coaching to ensure what was learned in the training room can be implemented, with a further two weeks in the franchise network on work experience operating at each and every level of the business, so when franchisees come to launch they have operated every part of the business.
GP: What kind of support do you provide to franchisees?
NC: It's intensive prior to launch, helping people source premises, recruit staff, implement marketing strategies to launch, set up the business and implement the systems. After the launch we visit franchisees on a monthly, quarterly, half yearly and yearly basis depending upon their needs. We also provide unlimited, ongoing telephone and remote support. We are able to monitor our franchisees' monthly progress by the management information provided by the franchisee on a monthly basis, and through the methods and accountancy software we have installed.
Because of our experience in the industry, there is nothing that franchisees will experience at any stage of their development that we haven't experienced before.
I noticed at the Portsmouth branch that Northwood is a very happy organisation. You must put great effort into making your brand and atmosphere such a happy one.
GG: We recognise that ours is a people business and we spend time ensuring that our people, both in our own and our franchisees' branches, are well trained and well supported. Quite simply, knowledgeable and professional staff who know their business get more job satisfaction and are happier. This has a positive effect on the customer experience.
GP: What is your plan for the next five years?
AG: Our aim is to have 100 branches trading with an average gross profit annually of £500,000 per branch.
GP: What is your greatest challenge in franchising?
AG: Finding quality premises in quality locations. We spend a lot of time helping franchisees find and negotiate the right premises.