2005 Franchise Report: Affiliation Booms With Sales Growth

Residential real estate franchises are showing strong gains in the number of affiliate and corporate-owned offices.

August 1, 2005

Fueled by the growth of new licensees entering the industry, residential real estate franchises are showing strong gains in the number of affiliate and corporate-owned offices, an exclusive REALTOR® Magazine survey shows. The number of offices of new and established residential franchise companies rose a median 18 percent between 2003 and 2005, according to the survey, which is based on data supplied by 34 companies in April.

Those gains track a 17 percent gain in NATIONAL ASSOCIATION OF REALTORS® membership over the same period, from about 977,000 members to 1,141,000.

“Franchises continue to be growth leaders as the number of residential licensees expands,” says Alex Perriello, president and CEO of Cendant’s Real Estate Franchise Group. “One of the top reasons brokers give me for considering affiliation is that they want help in implementing growth strategies.”

Some giants in the industry—Prudential, RE/MAX, and the Cendant brands Century 21, Coldwell Banker, and ERA—showed solid growth of between 5 percent and 21 percent, based on the survey.

As you would expect given their smaller size, young franchisors such as Avalar Network Inc., based in Las Vegas, charted a much greater rate of growth. That company, launched in 1999, has grown 161 percent since 2003, from 23 offices to 60 offices.

Also showing above-median growth are many well-established midsize companies such as Keller Williams, which increased its offices by 75 percent to 459.

If you’re thinking about affiliating your company with a national or regional brand, whether through a franchise affiliation or a licensing arrangement, you can use the survey findings to help you compare current offerings.

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.

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