Mortgage Choice began in 1992 and started franchising two years later. As at June 30, 2009 (the last report to the ASX), there were 350 franchises, 22 of those multi-units.

Total franchise investment: $35,000 for the franchise license plus at least six to 12 months working capital per franchise. There is a preferred finance arrangement through BankWest.

Set-up costs including fit out/stock: Set up costs can be minimal if the new franchisee decides to operate as a mobile mortgage broker working from a home office. If they choose the other end of the spectrum and purchase a shopfront office in which to commence their operations, the costs involved will depend on office size, location and interior design.

Working capital required: At least six to 12 months working capital per franchise license.

Ongoing marketing and royalty fees: Mortgage Choice franchisees do not have ongoing marketing fees if they decide to opt out of contributing to a marketing fund for their area or state. In terms of royalty fees, Mortgage Choice retains a portion of the upfront and trail commissions our franchisees receive from lenders each time a customer’s loan is settled.

Training costs: All official training is included in the upfront cost; from an intensive two week induction course through to field visits from state and group office staff, state and national conferences, pod meetings, community of interest meetings, mentoring, lender forums, business development workshops and e-learning. Franchisees are free to complete additional training with external consultants or organisations as they see fit.

Process time: It usually takes eight to 12 weeks from initial inquiry to franchise opening.

Term of agreement: One five year term with one option to renew for a further five years.

Leasing: The franchisee manages all leasing negotiations should they choose to operate from a commercial office or shopfront, so they hold the lease. Franchisees are free to run their business as they like, while following the Mortgage Choice operations manual and their franchising agreement.

Main method of franchisor and franchisee communication: Due to the vast geographical dispersion across Australia, the main method of communication between Mortgage Choice franchisor and franchisee is via email, phone, our intranet and, increasingly, Google sites. However regular conferences, franchisee visits by group and state office representatives, forums, workshops, geographical region and other meetings allow us to stay in close connection through regular face to face contact.

In each state office, we have a state manager, a franchise development manager and a field marketing manager, along with staff members who support those functions. Each state manager, franchise development manager and field marketing manager spends three to four days per week on the road, visiting franchisees in their state to discuss each business’s development and growth activities.

Do you have a franchise advisory council? Yes, the Mortgage Choice FAC currently comprises 10 franchisee representatives and five senior executive staff members. The group officially meets quarterly though franchisee members may choose to meet separately prior to full FAC meetings. For Mortgage Choice, the FAC is a forum where franchisee and franchisor work together to explore issues of mutual concern and develop ideas and recommendations to improve the productivity and profitability of the franchisor and the franchise network.

Lead generation: This is both centralised and local, with the latter being the choice of each franchisee as to how much time and money they would like to invest in either working solo to bring in leads or with other franchisees in their region or state.

The group office marketing team works on lead generation via a number of avenues such as national television, print, radio and online. We spend 5.5 per cent of gross revenue per annum on marketing activities.

Around 70 per cent of our leads are obtained through our website and at present we rank number one with the Google search term ‘home loan’, which is the result of years of hard work utilising search engine optimisation.

What and when was your last investment in back office reporting? Part of our investment in our enterprise system solution, named Discovery, is to have one data source to drive all our reporting needs, allowing us to analyse a number of aspects of the business from the one source. We are still working on and investing in this on a daily basis.

Renewal percentage: 100 per cent of franchisees up for renewal since November 2008 renewed their agreement.

Number of closures since November 2008: 21 terminations.

Frequency of franchisee profitability reporting: Our state office teams review their franchisees’ business plans and cash flow on, at least, an annual basis. Depending on the franchisee, this may be done monthly.

Average franchise turnover July 2008 to July 2009: Turnover revenue per franchise ranges from $2.4 million (without taking operating costs out and excluding GST) to $20,000 for new franchisees.

Growth plans for 2010/11: The company is working to a strategy of DREAM, which is an acronym for diversification, recruitment (Greenfield sites a priority), existing franchises (foster initiatives to increase their organic growth), acquisitions, and manage costs.

Some of its key objectives are to build strong value for all stakeholders, be the first choice of property buyers, to embrace the business philosophies of ‘customers for life’ and ‘share of wallet’, to find more ways to add value to franchisees and to educate franchisees about how to grow their business.

To restore confidence in the financial business model of a Mortgage Choice franchise communicating a more transparent and bona-fide exit process for long-term franchisees, based on the principle of fair and reasonable value, is also a major objective.