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Loan Market – the finance arm of real estate giant Ray White – has become a fully-fledged franchise group.
The announcement took effect on July 1 and sees its 481 brokers Australia-wide move from being independent contractors to become franchisees.
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Loan Market has been operating for 20 years and company chairman Sam White felt now was the ideal time to reinvigorate the business model. Mr White said the business had simply grown so large that things like a ‘code of conduct’ among its broker network and better communication channels necessitated the move to the franchise model.
Mr White stressed that it won’t be a paid franchise model and nor is it compulsory for existing Loan Market brokers to sign on.
“Moving to a franchise model gives all our brokers clarity and helps them make more money by percentages of what they write in upfront sales,” Mr White told The Adviser.
“The problem with many franchise agreements is that the broker gets locked in; there are all these things that, as a broker, I can’t do. So what we’re saying here is, so long as you do the right things, follow the code of conduct and ethics, go knock yourself out, make as much money as you can.”
“The real test is that brokers can leave us within 14 days and keep their trail; so we need to be sharp, we need to be on our toes.”
The new franchise model also sees the introduction of a new commission structure. Previously, Loan Market’s commission rates were based on brokers who did and didn’t take leads from its Ray White real estate business.
“We previously worked with two channels where one channel could have access to Ray White and one channel couldn’t, and the payment terms were also very different,” explained Mr White.
“So what we’ve done is get rid of all those channels; now we’ll just have one rate card, everyone can have access to whatever they want in the company.”
In other Loan Market news, Mr White acknowledged that the business was “under-represented in NSW” and he saw the state as the best prospect for future growth. He also revealed aggressive plans for the Asian market.
“Indonesia is looking good for us. We’ve already got a good footprint there with the Ray White brand, but from the mortgage side, it’s got huge opportunities for us. There’s also plenty of opportunity in Singapore too,” Mr White added.
