Qa With Stanford Raffles Realtys Ceo Dr Jin Lee
How was your franchise/opportunity originally conceived and started?
Our story began in 2011 with the concept of creating an agent-centric brokerage that focuses on the Real Estate Professional as the customer and to provide full administrative and technological support within a full 100% commission flat rate structure to ensure the success of the associate.
Current brokerage models are broker-centric and have the broker driving the leads and business to the agents. Beginning from the role of an agent, our CEO Dr Jin Lee, experienced firsthand what the needs of agents are and what drives the business. The key component here is agent-client relationship. This drives the business to the brokerage. Hence, instead of trying to take a high commission split to drive the business to the agents, our revolutionary model is to take a low commission split so that the agents drive the business to the Brokerage.
The secondary differentiating aspect of our revolutionary model is that we also provide the office amenities, support and technology that broker-centric brokerages provide through efficient and effective cost management.
What was your original vision for your company? How has that changed over time?
Our vision was always to create a premium 100% commission structure brokerage. Over time, we learnt that through efficient and effective cost management, we are able to provide more amenities to the agents as ultimately, they are our customers.
What do you believe is the single most important factor when choosing a franchise?
I think the most important aspect is to see the leadership, vision and potential market threshold of the franchise model.
Why should someone choose your franchise over other similar franchises?
Our leadership, vision and potential market threshold of the franchise model are the key differentiators. Our CEO Dr. Jin Lee, has a PhD in Marketing from the University of British Columbia, BC Canada. With his prior work experience in the Financial and Real Estate industries, plus his quantitative background in Electrical Engineering and Marketing Research, he is able to provide strategic direction, technological innovations and effective management strategies to our partners and franchisees. Our vision is also not only to provide an agent-centric brokerage, but also to provide a premium brand through effective and efficient cost management. Finally, with most of the agents currently in broker-centric brokerages, this presents a huge potential market threshold for our franchise model to capture and expand market share.
What makes your industry attractive?
The Real Estate Brokerage Services can be treated as one of the industries that will survive the ups and downs of economic cycles, much like the Medical or Education industry. When the economy is up, consumers and investors both invest in real estate and the transaction volume goes up above baseline. Baseline is defined as the usual requirements for Real Estate Brokerage Services as in a Divorce, Death or Relocation. Now, when the economy is bad, there are property owners that are desperate to offload the properties and there are always buyers for a great deal, and this also occurs above baseline. Hence the Real Estate Brokerage Services industry is a relatively stable industry. The reason why many brokerages did not survive in economic downtimes is because although the transaction volume is there, the transaction price value has dropped. Being dependent on high commission splits means that the revenue value will also drop. While their cost structure remains high, broker-centric brokerages will face many challenges in economic down periods. Thus the Agent-centric model, with efficient and effective cost management, makes the Real Estate Brokerage Services industry attractive.
What types of qualities do you look for in potential franchisees?
A successful franchisee would be one who had prior experience in a Real Estate transaction whether as a buyer, seller, investor, agent or broker. Existing brokerages that convert will have a faster learning experience, although that is not an essential requirement. Franchisees who are enterprising, entrepreneurial, have some business background or a business degree and who have liquid capital of $50-100K would be successful adopting the Stanford Raffles Realty franchise model.
What do your franchise fees and royalties cover?
Franchise fees would cover the right to adopt the Stanford Raffles Realty franchise model in a protected area. It will also include support on setup and store opening. Royalties are at $500 min per month or 6% whichever is higher.
How do territories work for your franchisees?
Our model depends on the number of agents in the market which is a proxy to the population size of the region. Hence an estimated 1 store per 1,000,000 population is a useful ballpark, but this is also dependent on other demographic parameters.
Why has your franchise model been successful?
Our leadership, vision and potential market threshold of the franchise model are the key reasons. Our CEO Dr. Jin Lee, has a PhD in Marketing from the University of British Columbia, BC Canada. With his prior work experience in the Financial and Real Estate industries, plus his quantitative background in Electrical Engineering and Marketing Research, he is able to provide strategic direction, technological innovations and effective management strategies to our partners and franchisees. Our vision is also not only to provide an agent-centric brokerage, but also to provide a premium brand through effective and efficient cost management. Finally, with most of the agents currently in broker-centric brokerages, this presents a huge potential market threshold for our franchise model to capture and expand market share.
We are also able to identify multiple revenue streams, build on retaining top agents and recruit and train brand new licensees to adopt the Stanford Raffles Realty way of conducting real estate business.
Where do you see your franchise in 5 years and 10 years?
We see growth and more innovations in the future. We are currently in the planning stages for expansion to Canada, China and South Korea. Our offices are interconnected so as to provide lead exchanges between domestic and international brokerages.
What is your favorite advice for new franchisees to help them succeed?
Keep your cost structure low to survive the initial phases, build relationships to grow the business and continuing learning the changing trends of the industry.
What would you tell potential franchisees that may be nervous about the financial burdens of starting a franchise?
Keep your cost structure low to survive the initial phases. The liquid capital is not only to pay for franchise fees and office setup, it is also critical in bridging the gap while building the relationship to have a sustainable agent count for profitability.
Can you explain your financial assistance?
With a low cost structure, financing would be readily available through personal resources such as credit cards, personal loans and savings during the initial phases before profitability.
On average, how long does it take to start a new franchise from the franchisees point of view?
Including licensing timeline, training and office setup, it would take about 3 – 6 months. Existing conversion brokerages would have a faster turnaround of about 1 month.
What was your background and experience before founding this franchise?
With a PhD in Marketing, our CEO was able to conduct quantitative research on Market data and was proficient in Marketing Strategies and Fundamentals. With a background in corporate banking and real estate investing, our CEO worked up the ranks from being an agent to being a Principal Broker and now a Franchisor. The franchise model was structured from the bottom up with concepts and principles catered to the needs of the Real Estate professional.