Robert Freedman is the director of multimedia communications at NAR. He can be contacted at email@example.com.
2007 Franchise Report: Affiliation Up
The move toward affiliation remains strong, especially as markets across the country remain in correction mode after the boom years.
September 1, 2007
After operating an independently owned boutique brokerage for several years, Jeff Ristine changed course and last year affiliated with Weichert, REALTORS®, the national real estate franchisor based in Morris Plains, N.J.
“We had a difficult time recruiting and gaining market share [as a boutique],” says Ristine, broker-owner of Weichert, REALTORS®, Kingsland Properties, in Wheaton, Ill. “Going the franchise route allowed us to leverage both the name recognition and the proven systems of a franchise network.”
Although the lion’s share of brokerages remains independent — more than 75 percent of all residential real estate companies, according to the 2006 NAR Profile of Real Estate Firms — there’s no doubt that the move toward affiliation remains strong, especially as markets across the country remain in correction mode after the boom years.
Based on survey data compiled by REALTOR® Magazine for its exclusive biennial franchise report, presented here, major franchisors saw the number of affiliated and corporate-owned offices flying their flags grow by an average of 15 percent annually over the last two years, even with franchise fees rising an average of 9 percent annually.
The number of franchise choices is growing, too, with almost a dozen players emerging in the market in the last half-dozen years, many of them touting business models built around discount or fixed-fee pricing.
If you’re thinking about affiliating your company with a national or regional brand, whether through a franchise affiliation or a licensing agreement, you can use these survey findings to help you compare offerings.