June 05, 2018
As announced on Monday 4 June, Mortgage Choice has been consulting with its franchisees with a view to updating its remuneration model to increase franchisee remuneration and reduce franchisee income volatility.
This change has been the key priority for the business in 2018 and is expected to underpin the long‐term sustainable growth of the Company and its existing franchisees, as well as to attract new, high quality businesses to the franchise network.
The franchise system introduced over 25 years ago was designed to allow mortgage brokers to own and grow their own small businesses with the support of a strong market brand and full-service model which included business planning, marketing, IT, training and compliance. This was reflected in the remuneration structure which has been very effective, with hundreds of brokers who have successfully started, grown and sold their businesses and helped hundreds of thousands of customers over the years.
More recently, the market has evolved with other business models being introduced, specifically aggregator models that have higher payouts but don't offer the same level of support services. While Mortgage Choice believes brokers in the network still highly value the services the company provides, we acknowledge that the balance between services offered and the remuneration needs adjusting to encourage franchisees to invest in their businesses. Accordingly, some months ago we commenced a confidential and collaborative process to update the remuneration model, which has included numerous workshops across Australia with franchisees to consult on a new model, including reviewing more than 30 different remuneration structures, many submitted by franchisees.
Mortgage Choice cares about our franchisees and works closely with them to assist them in growing successful businesses. We have policies in place to support any franchisee that approaches us in need of additional support. We have provided personalised assistance on a confidential basis to franchisees who have experienced financial difficulty, suffered health issues or had changes in their family circumstances.
Mortgage Choice believes that its current model does not encourage poor behaviour or practices. The company has robust compliance processes and credit policy controls in place that our franchisees are required to adhere to. We believe our franchisees are diligent; they want to do the right thing for the consumer.
Mortgage Choice is in advanced discussions with franchisees and is aiming to have a new remuneration model in place by August 2018.