Small is Big
Covid 19 pandemic has badly disrupted the businesses, including those in the real estate domain and left them struggling for survival. However, the companies which quickly evolved themselves by taking to innovative strategies, have not just been able to ensure continuity of their businesses by making their business operations cost-effective and efficient, thereby warding off the devastating effect of Covid pandemic.
360 Realtors, one of the largest real estate advisories with a multi-city and multi-country operations, has demonstrated a well thought out strategy to beat the covid blues. Within three months of the first wave of pandemic hit the country, this institutional brokerage firm successfully launched 360 Edge, a new vertical of the real estate brokerage business, based on franchise model, aimed at building an asset light and scalable business.
The timely and well thought strategy paid dividends as within a year of the launch of 360 Edge in June last, it was able to set up 35 franchise offices with over 200 business associates across Bangalore, Hyderabad, Pune, Noida and Gurgaon, besides Dubai, achieving gross transaction value (GSV) of 250 crore, targeting a GTV of Rs 1000 crore by the end of the year.
Though global franchise brands like Re/MAX and Coldwell Banker are already present in the country, 360 Edge holds the distinction of being the first Indian brand to enter the vast yet fractured and heterogeneous space with a comprehensive support structure and tools to build a seamless, scalable and profitable franchise network.
The idea behind 360 Edge was to create a widespread network of independent brokers to tap into newer markets and segments to grow transaction volume under the asset light route. As Ankit Kansal, MD, 360 Realtors puts it, ” Large advisories derive the benefit of collaborating with independent brokers in different regions through franchise arrangement, in order to expand their network without incurring the cost of capital and operational expenditure. Especially as in the new normal, revenue generation is a big challenge and as such one would like to save on the cost of hiring staff and paying rentals for the office space”.
360 Edge has a simple 3-tier model where a franchisee pays a lump sum fee for a period of 5 years to get associated with the franchisor. The franchisee is required to have an office infra of 600-1000 sf from where a team of 10-15 business associates can operate. The franchising company helps in recruiting business associates who are supported with genuine leads, training, CRM and get the advantage of competitive commission slabs and timely payment of brokerage.
This franchise model helps big advisories to build additional revenue and tap into new markets and geographies and enhance their human capital without incurring hiring cost. At the same time it helps small independent brokers facing financial challenge, to get the support of big brokers to grow their business. Elaborates Saahil Kapoor, Head, 360 Edge, ” The standalone brokers get to grow their by leveraging the marketing and technical acumen of big brokers across the value chain. As such by enlarging their customer base, they are able to sell products from reputed developers from across India and earn higher profit margins in a timely and hassle-free manner”.
Going forward, 360 Realtors sees its franchise business arm- 360 Edge gaining further traction , ensuring faster growth of its brokerage business. Ankit Kansal exudes confidence as he sees steady, yet more vocal shift towards franchise based low capex and low opex brokerage model as post-covid financially strained independent brokers are not in a position to make incremental investments on cloud-based tech, ERPs, CRMs and digital marketing to grow their business.
Small seems to be really big for 360 Realtors, especially in the backdrop of a creditable performance by 360 Edge over the past one year and a promising target of setting up 75 offices including new overseas offices, with 500 business associates this year, generating a gross transaction value of Rs 1000 crore.
The author is Editor, PropTOQ Real Estate Magazine