The Homeloans Ltd purchase of embattled franchise network Refund Home Loans means brokers will no longer be required to refund part of their commission to clients.
Homeloans recently acquired the troubled Refund network, along with its $1.9bn loan book, after the franchise spent seven months in administration. Homeloans general manager of retail sales Greg Mitchell said the acquisition means franchisees who sign on to become Homeloans branded brokers will not be bound to the former Refund business model.
“That’s an individual case-by-case decision that the actual franchisee would make once they become Homeloans brokers. If they want to make separate arrangements in that regard with the individual clients they take onboard, that’s up to them, but we will not be pushing the continuation of that model across the franchisee network,” he said.
While brokers will be able to make their own choice regarding client refunds, Mitchell said one decision was clear: The Refund Home Loans brand will no longer be used.
“We’re using the strength we’ve got around the Homeloans brand being around in the market for more than 26 years. We’re using the traction of the Homeloans brand, and we won’t be using the Refund brand at all,” he said.
Mitchell said the company has sent contracts to 170 Refund franchisees, offering them the opportunity to become Homeloans branded brokers. He previously told Australian Broker some franchisees had decided to leave the industry while the company was in administration, but said initial contact with the remaining franchisees had been positive.
“It’s been going very well. We’ve been quite proactive in terms of getting in contact with the franchisees we sent contracts to, and the response has been very promising,” he said.
Non-bank gets 'free kick' with franchise acquisition