In spite of the struggles of the past few years, real estate franchising is still a very viable alternative for many independent real estate brokerages.
The real estate franchise industry continues to be a complicated, dysfunctional, compilation of individuals, companies, and large corporations trying to figure out what the real estate brokerage business should look like 3, 5, and 10 years from now. Due to the sheer size of the real estate industry, there are many opinions, models, and personalities that attract independent real estate brokers into conversations about the future of their real estate companies. As the real estate market begins to stabilize in 2010 and 2011, those real estate franchisors, national or regional, large or small, who can combine fresh, innovative, new hooks with solid tools, systems, technology and support will be successful in renewing existing real estate franchisees and affiliating new ones.
The real estate market is breaking down into three segments: National Players, Regional Players and Niche Players
- National players. The large, national real estate brands will continue to be a force because of their brand recognition, size of their organizations, referral networks, and ability to begin investing in R&D again in the near future so that they can offer up new hooks that will be critical to their future success.
- Regional players. The large, regional real estate companies have an advantage because they are regionally owned. If they can combine that positioning with other hooks, solid support, tools, systems, and technology worthy of some of the nationals, they can make a strong argument to an independent real estate brokerage who believes an affiliation can help their business and would rather deal with a smaller, less corporate real estate franchisor that is regionally vested. Intero Real Estate Services, whose Chairman is Bob Moles, former President of Cendant’s Real Estate Franchise Group, has taken an old hook and given it a new twist. They are taking existing multi-office regional real estate brokerages, selling them master franchises (like CENTURY 21 and Re/Max did in the early 1970’s) and making them regional real estate franchise players using the Intero hook of coaching and technology in their franchise sales efforts.
- Niche players. More and more niche players will surface to serve specific segments of the real estate brokerage community with their own unique hooks. There are several examples that prove this point:
- A new company called Pedal to Properties hopes to capitalize on a small but fiercely loyal segment of the brokerage industry that is both environmentally and health conscious. They give customers bicycle tours of neighborhoods as a way to engage them.
- Due to the ever increasing purchasing power of the Hispanic community, Casa Latino started selling real estate franchises two years ago geared toward the Hispanic brokerage and real estate agent or those who want to reach the Hispanic consumer.
- The success or failure of these and other niche real estate franchisors will be based on the support, tools, systems, and technology they can offer beyond their hooks. As with the national and regional players, no matter how good the brand or “hook”, these franchisors must be able to justify the initial and ongoing fees by providing real value to their franchisees.
