LoanLink Broker Services through its Wizard brand offers the opportunity of becoming involved in a vibrant and dynamic franchise network.

Any potential investor must first satisfy him or herself that they are dealing with a reputable franchisor. Wizard was established some four years ago and is the only originator to offer a true franchise opportunity. The company is a member in good standing of FASA (Franchise Association of South Africa) and was recognized as a finalist  in FASA’s franchisor of the year awards in 2003. The brand is represented nationally and is well established and recognized in the industry.

Every Wizard Franchise is established as a separate legal entity owned by the franchisee but trades as Wizard in a particular area. Overtrading of any particular area is controlled by awarding each franchise a defined territory. To qualify for a franchise, mortgage origination would need to constitute the primary business activity of the potential franchisee. The franchisor retains a management fee, together with a marketing levy which is utilized to develop awareness of the brand.  An initial amount is charged to acquire the franchise for which the franchisee will receive assistance in setting up his or her operation. In addition, guidance will be given regarding branding, business development and how to sell a mortgage product. The potential franchisee will also be assisted in complying with the statutory obligations connected with setting up their own business.

Bond applications received are submitted to our central processing unit which takes responsibility for submitting the application to the appropriate bank. This processing facility will also follow up the transaction to registration, make payment of any third party commission and accounting to the franchisee for the balance.

As a Wizard franchise, the franchisee operates under the franchisors registration with NAMO. Any consultant employed however, would need to register as a consultant in their personal capacity.

A likely franchisee would need to be a motivated and disciplined individual who is driven by a desire to achieve sales and service excellence. As they will be running their own business the person should have an entrepreneurial spirit focused on building a sustainable venture.  The intention is that the owner should be actively involved in the running of the business. From our experience this is the best way to ensure the success of the venture. Knowledge of the residential property market and/or financing would be an advantage but is not essential if the prospective franchisee possess the correct selling attributes.

The intention of the franchisor is to ensure that a successful sales orientated person should not be burdened by administrative demands. The processing centers have been put in place to support the franchisee and allow them to focus exclusively on the successful development of their business.

The first step in applying for a franchise involves the development of a business plan.  At the heart of this plan must be a strategy that dictates from whom, how much and at what cost the franchisee intends acquiring from the application. As a consequence the prospective mortgage originator would need to identify the area in which they operate.

• Area Analysis
  
  The potential of the area needs to be established. Market activity is crucial if sustainable levels of applications are to be received. In areas of high activity though it must be understood that competitors are also likely to be active. Questions to be asked whether there would be a niche that is not currently being serviced or where competition is less fierce; also what costs would be involved in attracting business from the identified target markets.  This analysis is essential if a realistic indication of turnover and cost of sales is to be included in the business model.
  
  
• Set-up Costs
  
  In addition to the cost of the franchise, a potential franchisee would need sufficient capital to set up and brand their offices. Given the number of variables it is difficult without indepth analysis to given an accurate estimate of this aspect but an absolute minimum figure of R30 000 would be reasonable. More importantly however is the reality that the franchisee would need to carry the operating costs of the business until regular cash flow is established. From our experience it would take some six months before cash flows would be truly established.
  
  Our franchise Managers will be happy to assist in developing these viability studies further. All payments will be made on registration of the applicable loan.
  
  
• Applying for the Franchise
  
  Once a suitable business plan has been produced and the viability of the proposal analysed, the franchisor will assist the applicant in ensuring that the appropriate training is given to staff and that all the required statutory requirements have been met.
  

CONCLUSION

Mortgage Origination offers an exciting and challenging opportunity for the entrepreneur. While the industry itself is growing steadily, it is extremely competitive. For those who can meet that challenge being part of the Wizard family will be financially advantageous and rewarding.