Queensland property franchise Go Gecko has been placed into voluntary administration, but the company says its franchisees will be unaffected by the move.
Go Gecko was founded in 2006 by Geoff Doyle and operates more than 50 outlets across the country, describing itself as the “pioneers of capped commission real estate”.
It’s been revealed the Brisbane-based company called in administrators on Tuesday, highlighting the tough conditions plaguing the property market.
A spokesperson for administrators Vincents Chartered Accountants confirmed the company is now in voluntary administration, although the appointment only relates to company-owned stories, which means franchisees are unaffected.
More than 40 franchisees were called to a meeting on Tuesday evening where they were told that about eight company-owned agencies were under review.
Meanwhile, Doyle has been asked to resign by the board of directors and has been replaced by Noel Scully, who refused to offer details on Doyle’s resignation.
“There’s a number of reasons for the CEO [leaving], but I cannot comment any further,” Scully told news.com.au.
Scully said as few as two outlets would close and confirmed franchisees would be unaffected, although he described the administration as “regrettable” and triggered by “difficult conditions”.
According to the company’s website, plans were in place to grow the franchise to as many as 150 outlets within four years.
It recently increased its commission cap from $5,950 to $6,950, with one source saying this would make franchises more attractive in the expensive Sydney and Melbourne markets.
Doyle could not be reached for comment.
Pamela Bennett, chair of the Real Estate Institute of Queensland, said a capped commission meant Go Gecko would have to survive on large volume and a strong rent book for cashflow.
She said this would be difficult given that property deals across the state were down about 45% from their high in 2007.
“There is probably under 5% [of agencies] that have closed doors… but sales staff numbers are down about 30%,” she says.