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Housing Franchise cements its place

The move into franchising by the home builder, Hotondo Homes, has further strengthened its position in the marketplace.

DESCRIBED AS ‘Australia’s Number One Building Franchise’, Hotondo has helped more than 16,000 families into their homes since commencing franchising in 1993. The economies of scale generated by the larger volume of work through the franchising network has improved the competitiveness of the franchisees and allowed them to link with a network of building suppliers.

Michael Renwick, the Managing
Director of Hotondo home
building franchise chain, says
franchisees are benefiting from
being part of a major buying group.Hotondo builders retain their independence but can use the resources and support of the professional national network. It promotes itself as the national network of local builders.

“Building is a lonely business and there are many aspects to get to grips with including the strengthening of government compliance in areas such as energy ratings, safety, zoning and town planning guidelines,” said Hotondo’s Managing Director Michael Renwick, the son of the founder, Kevin Renwick. “Compliance is a big word in building.

“Local builders also have to compete with larger building firms that tend to be more aggressive in advertising and marketing drives. But because there is safety in numbers we developed a franchise chain that links Hotondo Homes builders to a network of building suppliers and professional support structures.”

The support includes business systems, a database and internet marketing, national buying agreements, trade sharing, and training programs focusing on local area marketing. Some goods or services are bought in bulk to benefit teams: building insurance, white goods and appliances.

“Information is power and so is networking,” Renwick said. “We gain fair prices for plumbers and electricians and our builders retain independence. National marketing campaigns add value in the brand, while franchisees are encouraged to conduct local marketing and indulge in profile building which also helps attract more builders to the brand.

“Few have similar models [to us] in the building industry. Too many competitors focus on cost cutting, and operate more like a buying group. To me, that is not right, you first need core values. We are builders first and foremost, but we want our franchisees to be successful in the way we are successful. We don’t want to churn them – we want good ones to stay with us.

“Our franchisees buy the opportunity to operate in an exclusive territory, and in metropolitan areas the sky is the limit.”

Hotondo’s franchise network of 130 builders each complete about ten homes in one year, but the largest build as many as 35. The average house is single storey and priced at $180,000. With twelve designs and 90 flexible floor plans, customers can select modifications to their new home.

Sitting comfortably in the national top ten list of builders, Hotondo claims to be the largest franchised network builder for new home constructions – and the market trend is driving people to the big builders. Hotondo’s turnover is in the region of $250 million annually, the value of the houses constructed, but as Renwick points out “We are after all in the business of building houses! But there is more profit being a builder than a franchisor… it’s not that attractive financially, franchisors only make royalties. For us it’s the reputation that matters.”

Hotondo has picked up numerous awards, among them the Franchisee Excellence: Industry Best Practice in the FCA PwC Awards, and Renwick is actively involved with the Franchise Council of Australia.

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