Ann: Franchisee Remuneration Structure Review, page-35

First 35 Last

Share
Profile

Follow
CaptainBarnacles

11,227 Posts.

704

05/06/18

22:28

Post #: 33516334
Share

Originally posted by Trumpy ↑

The key issue with any home loan finance is the lead in time- lets break it down.
Mr & Mrs Bloggs find a house to buy and go see Fred the mortgage choice broker. A good broker can get all the info they need and submit an application for a pre approval within say 48 hours. Mr & Mrs Bloggs then put an offer in for the property, or wait for the auction say next Saturday, (or the one after). So far lets say a week has gone by. The vendor accepts the offer contracts get drawn up pre purchase inspections etc. Another 7 -10 days. Exchange of contracts 2 - 4 days, with a 4- 6 weeks settlement timeframe.

So the average time frame for a loan to settle at best is 6- 8 weeks. The banks only pay the comms to mortgage choice at the end of the month after settlement ( and I think some even pay quarterly) then you have to wait for MOC to pay Fred the broker.

So Fred's pipeline of deals needs to be say 3 months out, at a minimum of $1.5m of definite business to settle each month, or MOC takes more.

Meanwhile Fred has to pay rent, wages etc.

Just me thinking out loud- no wonder these poor buggers can't take a holiday. Interesting to see what new model they come up with

Expand

You missed a potential key factor in the pay situation - if they settle $4.5m worth over 3 months, they may still miss for 2 of the 3 months. Not sure if the 1.5 is averaged or not. Also what happens with claw backs when the loan doesn't stay for the required time?
Would be great if anybody knows more about that to share it.

On the other side, if MOC fixes this issue for the franchisees, how much of MOC's current profit goes to the franchisees in a new pay arrangement?

One way MOC look like bastards, the other they look hugely overvalued IMO!

Last edited by CaptainBarnacles: 05/06/18

MOC Price at posting: $1.48 Sentiment: Sell Disclosure: Held
2 Upvote

0 Great analysis

Reply

Top Stories

TTT

Titomic jumps +6% as it incorporates Microsoft Hololens tech

STK

Rogozna grows with gold equivalent grading 1.1g/t across 545.7m for Strickland

RCE

Recce progresses testing of gel to treat bacterial skin infections

LU7

The Breakdown: Lithium Universe talks refinery design and lithium processing in strong preliminary feasibility study for Bécancour

AHK

Ark Mines provides strategic update following mining lease submission