Do Business Well

When discussing franchising, people tend to focus on the rights of the franchisor and the corresponding obligations imposed on franchisees. The fact that franchising is a win-win concept and that every franchisor worthy of this title will assume a clearly defined set of obligations as well is frequently overlooked. When AIDA’s franchise offer comes up for discussion, however, this oversight is unlikely to arise.

Throughout the entire interview that formed the basis for this case study, John Herbst, CEO of AIDA National Franchises (ANF), referred to his franchisees as “clients”. And notwithstanding the fact that he is an accomplished real estate professional, he stressed repeatedly that he is no longer in the real estate business, but in the franchise business. He sees it as his mission to help his franchisees build better businesses. It soon emerged that at ANF, these sentiments are more than mere lip service. Franchisees are seen as customers in the true sense of the word and, as any marketer knows, customers are the very reason for any business’s existence.

Established in 1958, AIDA has long since become a household name in the South African residential property market. Its success is based on the simple philosophies espoused by its founder, namely uncompromising integrity, professionalism and dedication to service. A listing on the Johannesburg Stock Exchange in 1987 was followed by a management buyout ten years later. Subsequently, a combination of organic growth, several acquisitions and the creation of new divisions prompted management to change the company’s name to Jigsaw Holdings Limited.

ANF is a wholly owned subsidiary of Jigsaw and its head office structure is deliberately kept lean. Attention is focused on the delivery of franchisee support that is tangible and meaningful. Activities that are not central to the company’s core business have been outsourced to ensure professionalism at competitive cost. Examples would be the IT and HR functions.

ANF concentrates on four key areas, namely synergy, training, marketing and technology.

Synergy

Activities are wide-ranging, with a strong bias on communication throughout all levels of the organisation.

In Action. A quarterly newsletter under this title is produced in hard copy and full colour. It is beautifully laid out and the writing style encourages reading from cover to cover. The contents is an eclectic mix of messages by ANF’s senior people interspersed with industry news, feedback from franchisees, lifestyle tips and personal stories of interest to members of the network.

Electronic newsletters. A series of electronic newsletter aimed at franchisees and franchisees‘ agents respectively are published at varying intervals and help key members of the AIDA Team to stay at the forefront of developments.

Convention. The annual national franchisee convention brings franchisees, their staff and members of the ANF team together for a few days of hard work and hard play. New products are introduced and old friendships renewed. The latter is an essential business aspect, as many sales come about as a result of referrals from within the network. Although 800+ people attend the Annual Convention, those who have attended report that it has maintained the feel of being a family affair.

The Management Forum brings together senior people from within the network in a think tank environment where future plans are discussed and strategies mapped out. Every participant is encouraged to throw away the blinkers and contribute freely, often with exhilarating results.

Franchisee Councils. National and Regional Advisory Councils facilitate a constant exchange of ideas and ensure that every member of the band marches to the same tune.

Awards. Regional prize givings recognise the achievements of outstanding agents and do wonders for motivation. Simply put, they recognise individuals who have made it and encourage those who want to get there next time round. For successful agents, admission to the Top Producers’ Club is the ultimate goal.

Training

Training is ongoing, formalised, in-depth and delivered at various centres throughout the country. Much of the material is available off the Intranet or on CD as well. In addition to basic introductory courses, more advanced programmes, for example the AIDA Agent Career Path and the AIDA Management Career Path, are presented. These courses are tailored to address the specific needs of franchisees, managers, agents and franchisees‘ staff respectively.

Franchisee support philosophy

Whilst ANF is a firm believer in franchisee support of the highest order, programmes that go beyond a franchisor’s standard obligations generally have a price tag attached to them. This does not mean that they are not highly subsidised, most of them are, but ANF have found that in the minds of franchisees and/or their agents, having to pay something towards, for example, the cost of presenting a workshop, adds to the perceived value of the event.

Marketing

nBrand building. The brand has evolved into a marketable commodity, reflected in the balance sheet to the tune of R36 million. It is not surprising, therefore, that much effort and money is continuously expanded on brand building activities and the maintenance of AIDA’s corporate image.

i. Marketing materials are standardised and frequently updated to retain their appeal and relevance.

ii. Head Office handles stationery design, with franchisees and their printers having access to standardised layouts that can easy be personalised.

iii. Aggressive advertising campaigns and a range of high-class promotional items, carefully designed to appeal to the network’s clearly identified target markets, support franchisees‘ sales efforts. One example would be the AIDA Property Gallery, an upmarket publication that promotes prestige properties nationally.

iv. Uniforms for male and female members of the network are made available to franchisees at cost. The design is understated and conveys the professionalism expected of AIDA’s representatives. Quality presentation folders, marketing materials and custom stationery further cement this impression in customers’ minds.

v. ANF’s PR service produces an average of six press releases monthly. These releases are professionally written and disseminated to the national press. They are also made available to franchisees, should they wish to use them for local promotions.

n Strategic Alliances. The building of strategic alliances that enable franchisees to offer value-added services to their clients is an ongoing process. Examples would be access to mortgage finance at preferential rates, a national network of property administrators, insurance, home inspection and warranty programmes and similar products. On this score alone, it is easy to see that a truly independent agent operating in isolation would neither have the purchasing power to set up such programmes, nor the infrastructure to effectively deliver them.

Property Exhibitions are another promotional tool that is being used extensively throughout the year.

IT Systems

AIDA’s entire business system is computerised and, based on the AIDA Technology Strategy, both the Internet and an Intranet are used in tandem.

Internet. The web site is accessible to the public and provides franchisees with a local web presence including email. The importance of this web site can be expected to grow in line with growth in the number of South Africans who have access to it.

Intranet. All members of the AIDA network are linked to the AIDA Intranet. It offers a comprehensive business management systems library including access to an extensive database of legal and other information that has been professionally compiled and is carefully maintained to always reflect the latest available information.

Franchisor’s ongoing duties includes
some handholding as well!

To benefit from the services offered by the franchisor, franchisees have to implement and use them. To this end, it is our objective to assist franchisees in the implementation and use of the maximum number of services within the shortest possible time span.

John Herbst, CEO of AIDA National Franchises

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