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Is it the right move for you?
By Leah Templeton HVA recently awarded its first associate franchise (AF) to Scott Arnold, of Dallas, TX. As an AF, Arnold is able to operate from home with less overhead, buy fewer properties than full-time franchisees and enjoy a career with HVA on a smaller scale, while still maintaining another job.
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| HVA's first associate franchisee Scott Arnold (left) with John Hayes, John Cantleberry and Chas Carrier, Arnold's DA. |
The AF program is expected to rapidly grow the HVA brand and open possibilities not only for new franchisees, but existing franchisees as well.
In fact, the program has generated a lot of excitement from current franchisees… and a lot of questions.
According to David Hicks, vice president of Operations, and Jason Killough, vice president of Franchise Development, full-service franchisees are asking about the AF program and how they can transition into that role. If this is a move you’re considering, take a look at these frequently asked questions with answers supplied by Hicks and Killough:
Q: Why would a full-service franchisee want to become an AF?
A: It depends on the goals of the franchisee. The transaction fees are higher for an associate franchise, so if a franchisee has a goal of buying 20 or more houses a year, they should remain a full-service franchisee. If the franchisee has goals of buying less than 10, it makes sense to become an AF. Depending on the market, and the price of houses in the market, somewhere between 10 and 20 houses is the point that the fees are equal.
Q: What does it cost to transfer?
A: There is no cost for a full-service franchisee to become an associate franchisee. Our goal is to help franchisees stay in the system, whether it’s as a full-service operator or as an AF.
Q: Can a full-service franchisee make the switch if they currently owe HVA money?
A: Yes, but we'll need to work out a payment plan.
Q: What are the transaction fees for a full-service franchisee that becomes an AF?
A: The AF will pay a transaction fee that includes both the buy and sale, with a minimum fee of $1,050 plus the $250 Marketing Fund fee. In addition, there’s an assistance fee paid to a Development Agent (DA) in return for training and supporting the AF.
Q: Will the full-service franchisee who becomes an AF work with a Development Agent?
A: Yes. And it’s up to the AF to select the DA of their choice. DAs have a right to accept or reject an AF. All AFs will work with a DA—that’s part of the strength of this program. When there’s no DA in an area, HVA will provide a DA for the AF.
Q: Is the assistance fee 50% of gross profit for each property sold?
A: It will be for some AFs, but not all. A new AF with little experience will need more training and support than a veteran franchise. New AFs will split up to 50 percent of the gross profit on each sale with a DA.. However, depending on the experience and support required, the assistance fee will be reduced accordingly. The assistance fee is not static, it is set between the AF and DA and is dependent upon the AF’s experience and skills. The more service needed, the higher the fee.
Look for an article in the Nov. 15 issue of The Vestor’s Voice® that discusses why making the transition into an associate franchise could be an ideal move for some full service franchisees.
For more information about becoming an AF contact David Hicks at David.Hicks@homevestors.com or Karen Mann at Karen.Mann@homevestors.com.
…Leah Templeton is an account executive at BizCom Associates, HVA’s public relations agency.
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