Another high profile estate agency office in London has closed - this time a branch of Winkworth.
The Richmond branch has been shut for some days and on its window there has been posted a formal Forfeiture Notice from Parkinson Bailiff Services Ltd. You can see a photograph of the notice at the foot of this story.
A Forfeiture Notice is typically posted on a commercial building when there has been an alleged breach of a covenant; leases often contain a clause allowing the landlord to close the lease in this way - that is, by entering the building and posting a Forfeiture Notice.
Winkworth told Estate Agent Today: “We regret that Winkworth’s Richmond franchise, owned and managed by Mr David Bell, will be entering liquidation. Winkworth is taking all necessary steps to ensure continuity for clients of this office.
“Tenancies managed under Winkworth Richmond, and its let only business, are already administered by the Winkworth Ealing office and will continue as such. The sales business will be transferred to neighbouring Winkworth offices.
“Richmond and surrounds remain an important area for Winkworth and we will be assessing our options for servicing existing and prospective local clients urgently.”
Winkworth currently has around 100 franchised branches across the UK, as well as a Mayfair-based office providing a support platform for all franchisees.
Last week Estate Agent Today broke the news that Foxtons had closed its office at Barnes in Richmond on Thames; the previous day the agency confirmed it was shutting its flagship Park Lane office with a nearby branch taking over its prime central London business.
Meanwhile yesterday Winkworth announced the launch of a new branch, at Fowey in Cornwall where the independent Fowey River has been rebranded as part of Winkworth.
Its staff of four will remain and a statement from Winkworth says the branch “will now focus on strengthening its marketing and widening its selling territory.”
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The general deal with WW is that they take 10% of turnover. Most agencies make about 20% on turnover, it varies of course, which means the brand will cost you half your net profit.
So what happens if the market slows say by 20%. Not unheard of, well as I understand the deal, you still hand over the 10% of turnover, ouch!! Double kill for those in the know.
There may well be more WWs going to the wall any time soon, some of their country offices are very vulnerable right now, I know of at least two who are struggling and I haven't even researched it.
It was a great brand when agency was all about flags on hilltops, and empire building. Web driven agency will reduce the appeal of buying into a brand I think.
Having spent 15 yrs tied into an estate agency franchise I can personally confirm its a pain in the arse. As Andrew said above when the market turns down (normally due to uncontrolled macro economic issues) you still have to find 10% of your turnover to give to the franchisor...who of course takes no risk whatsoever .....ouch !
That's 10% less you have to spend on the best staff, advertising, offices etc etc than your non franchised competitors.....nearly 2 yrs on since leaving a franchise we've never looked back :) Fantastic !!
WW take 8% but that is just splitting hairs. I worked for a winkworth branch for 7 years, which were very productive, however, i could also see that some of their ideas were "stale" and some of the marketing i did not feel was right or sent out a positive message. I think instead of concentrating on the middle market where they were good, they tried to make a big indent at the top end, which has not worked for them. Sometimes it is best to stick to what you know and what you are good at!
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