The franchise business model in the real estate sector is expanding in Cambodia, driven by the interest of real estate agents who want to service the booming property market. This, despite having little experience, knowledge, and skills. But, fret not. There is a solution to that now.
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Global real estate firms have descended upon Cambodia offering franchise licences where franchisees are taught how an estate agency works. They pick up management skills, and learn how to network in local and international markets.
Chrek Soknim, chief executive officer of Century 21 Mekong, a franchisee of Century 21 Cambodia, says that because brand building takes time with high expenditure on promotion and marketing, it is more convenient to set up a franchise outlet.
“It also takes years to gain trust in the market. Opting for a franchise licence cuts out time and expenditure. On top of that, they are also given training, and get to engage in exchange programs.
“They can also draw on the experiences of successful businesses in Cambodia and abroad,” he says.
Being a franchisee, the licensee can use the logo of the parent company or master franchisor to promote the company among developers and customers.
“We are handling 10 residential projects (Borey) including Borey Peng Huoth, Borey Piphup Thmey, Borey Vimean Phnom Penh, and Borey Mekong Royal,” Soknim adds.
For now there are two international franchise real estate brokers in Cambodia. They are head franchisor Century 21 Cambodia, which is part of US-based Century 21 Real Estate LLC, and Keller Williams Realty Inc (KW), one of the world’s largest real estate agency by agent count. This is in addition to affiliates of global real estate service and investment firms CBRE Group Inc and Knight Frank LLP in Cambodia.
“In the past, real estate franchise was unheard off. People only knew about food and beverage franchise. It was quite a challenge to set up a company in 2013 as developers were not aware of the services provided by agents.
“They also claimed that they can sell their properties themselves,” says Grace Rachny Fong, executive director of Century 21 Cambodia.
Fong’s company acts as the head franchisor which approves licences for new agencies in Cambodia. To qualify, franchisees settle an initial franchisee fee, and agree to pay monthly loyalty fees to start their own business. Century 21 Cambodia has a network of 21 offices in Phnom Penh, and one in Sihanoukville. It plans to expand to the remaining provinces in the near-term.
“Although we are in business of selling franchise licenses, we continue to support our franchisees by coaching, and network facilitation. We also monitor their capital flow, commitment and long-term business plans,” Fong adds.
Fong adds that besides capital flow, the master franchise firm will assess franchisees on their passion in the business, commitment, and the long-term business plan.
Keller Williams Russey Keo branch director Nhem Sean Sothea tells Capital Cambodia that the franchise business model helps businesses grow faster as it allows them to connect with a global network.
“There is a proper system, formula, and standard that are in place which facilitates the expansion of the customer base and revenue,” Sothea says.