Non-bank gets 'free kick' with franchise acquisition

by Adam Smith30 May 2012

Homeloans has called its acquisition of the Refund network a "free kick" to increase its impact in the marketplace.

The company last week announced its acquisition of the embattled Refund Home Loans, along with the company's broker network and loan book of more than $1.9bn.

Homeloans general manager of retail sales Greg Mitchell said the deal would substantially increase Homeloans' exposure in the marketplace.

"This is basically a free kick we've got. About 170 contracts have been sent out to Refund brokers. If we get a majority of those franchisees onboard it just gives us that presence in the marketplace," he said.

The deal will offer Refund franchisees the opportunity to become Homeloans branded brokers. In a letter to franchisees, administrator SV Partners urged Refund brokers to come under the Homeloans brand, saying it would ensure the re-establishment of their trail payments.

While Mitchell said some Refund franchisees had left the company, he claimed most were pleased with the acquisition.

"We've tried to make contact with a lot of them verbally, and it's been mixed. A lot of them through that gap have left the industry or entered into positions where they may not continue [with Refund], but certainly the majority of them are happy to have come onboard with a brand that's been around for 26 years and the place we hold in the market," he said.

Mitchell said the acquisition fit well with Homeloans' strategy of ramping up its branded distribution.

"Homeloans has wanted to expand our brand, and we've been wanting to for the past two or three years. We just saw a fantastic opportunity with Refund to work with the franchisees out there that have obviously gone through a bad spate where they've been in no man's land," he said.

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Homeloans eyeing further branded broker distribution

Franchisee bid a prime Refund contender