Varna-based Foros real estate company, with about 15 years of experience on Bulgarian property market, announced the start of its franchise project at a news conference held on April 3.
Established in 1993, Foros agency is currently one of the largest players in the sector, with 13 offices countrywide: in Sofia, Plovdiv, Varna, Bourgas, Rousse, Veliko Turnovo, Dobrich, Balchik, Bansko and Slunchev Bryag (Sunny Beach).
The franchise concept was elaborated in partnership with Lloyd Tarbutton, chairman of the International Franchise Association since 2003, Foros manager Dobromir Ganev told journalists.
After the initial real estate upsurge, experienced in the last four-five years on Bulgaria's infant property segment, the market has shifted to maturity, growing more structured and differentiated, Ganev said.
Given that Irish and British players, who used to fuel the sector’s development, have withdrawn, due to hardships faced by their local economies, Bulgarian property business cycle seems to have headed for a certain cool-down, Foros manager commented. The agencies, which worked primarily with British and Irish clients, are at the forefront in this time of ordeal, he noted.
Considering the boosted supply and the heated competition, 2008 is expected to see a drop in the number of property transactions, the company’s executive said. New clients have grown more educated, discerning and selective and real estate agents have to respond to the newly emerged sophisticated demand.
You cannot simply build a batch of apartments, launch it on the trading lot and expect that it will sell out, as it was before. Marketing expenditure has grown significantly and should be calculated in the cost of the product, Ganev said.
One of the benefits of a franchise scheme was sharing marketing expenses, which are a considerable item on a company’s budget.
Currently, there are about 6 500 legal entities, dealing in property mediation, according to official statistics, Foros franchise manager Milena Mihailova, told The Sofia Echo, implying that they are too many for Bulgarian market, particularly considering that some of them are very small and unprofessional and the future belongs to large players, who can provide quality and expert advice.
“Foros has developed hugely in all these years as a company, gaining experience, expertise, reaching high quality of service and significant growth. Besides, there have been a number of enquiries for franchise schemes in recent years. So, we decided that the appropriate moment for launching a franchise project has come,” Ganev told the news conference.
Those who opt for joining the Foros network will benefit from the already developed brand image and common marketing, from the company’s know-how, technology, corporate software, Mihailova said. They will have the opportunity to conduct transactions in different cities – through successful communication between different Foros offices, will acquire access to information about clients and properties, she added.
The company’s long-run objective is to cover 100 per cent of Bulgaria’s territory and to possibly expand to other markets in the region, such as Romania, Macedonia, Serbia, Turkey and Greece, Dobromir Ganev noted.
Foros has not started negotiations with anybody yet and the amount of franchise fee will be determined on an individual basis, he added. Currently there is one Bulgarian and three international real estate agencies, operating through franchise, in the country.
The company was awarded the Business Superbrands prize for 2007 at a ceremony held on April 2, Mihailova proudly said at the news conference.
To date, the local company Address, the largest realtor in Bulgaria, has about 70 offices. It started developing its franchise system in December 2006 and presently has 16 franchise partners in 20 cities.
The US-based RE/MAX, with its 40 offices, is the second largest property agency in the country. The other two foreign franchise networks are the US-based ERA, presently having 15 offices, and Century 21, another American company, with seven offices.
