Go Gecko's CEO has refuted a recent newspaper report that suggested its franchisees are unhappy and leaving in droves, and instead claimed the group's capped commission model worked well in a market suited to bargain-conscious vendors.
CEO of Go Gecko, Noel Scully, told Real Estate Business that although there have been office closures, including eight of the nine group's company-owned offices last year (one was sold, according to a Courier Mail report), their experience hasn’t been that different to many other real estate groups, many of which are operating in tough property markets.
According to the company website, the group operates 30 offices across Qld (26 offices), NSW (two offices) and SA (two offices).
“We’ve had office closures and amalgamations just like everyone else," Mr Scully said, in response to a July 30 Courier Mail article that said the group had lost almost 40 per cent of its outlets, and that a number of franchisees "insisting on anonymity or citing confidentiality agreements" claimed there were "problems" with the company.
"I wouldn’t think we were any different to the industry, not dramatically different anyway. But I wouldn’t think we’ve shut 40 per cent of our franchise stores, that just doesn’t make sense.”
“In the past there was fairly ambitious growth when the market was running hot. We would certainly like to open more offices but I think, our plans are different now than they were then. It’s a different marketplace."
Mr Scully said he was optimistic the Go Gecko model, which centred on capped commissions, remained sound.
“I suppose I'm positive looking forward rather than negative," he said. "There's certainly enormous opportunity for a capped model compared to a normal full-priced commission model.
“It’s the right model for today because consumers are becoming wary about what they spend. Everyone’s getting used to shopping around for what service you get, [and] for what price you pay.”
The company plans to continue growing in the coming months, with Mr Scully claiming he is talking to interested companies.
“We only have one new opening, which we’re in the process of finalising now," he said.
“But we think the growth will come from us being able to rebrand some agencies in the future, which is something we haven’t done in the past. We are talking to a number of parties about that now.”