Join a Franchise Without Losing Your Independence
The desire for distinctive, local branding and rising interest in real estate teams pose challenges for franchisors. Learn how some companies are responding.
September 13, 2017
Brokers and salespeople who consider leaving the world of independent brokerages for the security and brand recognition of a franchise face a common fear: loss of flexibility in business decision-making. Certainly, running a national or global brand while allowing franchisees autonomy can be a tricky balance. But smart franchises are proactively addressing that concern in their outreach, according to John Reynolds, president of the International Franchise Association’s Educational Foundation. “How can you be local and global? That’s ultimately the challenge of the brands,” he says. The tension is especially acute in relationship-based enterprises such as real estate. “Customers want to be able to identify with the owner of the business, and if the focus is just on the big brand, you lose that.”
Get the scoop on the offerings at nearly three dozen companies in our 2017 Residential Franchise Report.
Niches Foster Individuality
One company that has devised a thoughtful approach to handling the dilemma is Seattle-based Windermere Real Estate. They’re getting agents involved in marketing choices. Over the last eight years or so, the company has developed four distinct niches (senior housing, equestrian properties, destination living, and new construction), with a fifth on the way (uber-luxury residential). Ten to 15 Windermere agents are involved in creating new marketing resources tailored for those niches, such as printed materials with larger font sizes for seniors. This optional niche program has become an important differentiator for the company and its salespeople, who also get access to exclusive networking opportunities. Noelle Bortfeld, Winder-mere’s chief marketing officer, says the niches offer agents the freedom to market themselves as local experts, which then reflects positively on the company. “An agent is a brand. They attract certain tribes because of who they are as brands,” she says. “Windermere is the endorsement of that brand.”
Agents involved in the horse community can join Windermere’s equestrian program by paying a nominal fee and dedicating a percentage of their marketing dollars to the niche. KiamaLise Herres, an agent with Windermere Bellevue Commons in Bellevue, Wash., who helped develop the program, says she wouldn’t have done nearly as well in the niche without the franchise support. “It benefits me tremendously to have Windermere backing me,” she says. “How could I, as one little person, replicate that?”
Herres says she’s doubled her business every year since the program started three years ago. She estimates that while three-fourths of her deals actually involve ranch-type properties, nearly all of her transactions can be traced back to the equestrian community. “It’s so valuable to me when I’m going into a listing appointment,” she says. “You’re not just hiring me; you’re hiring a network of equestrian specialists that Windermere supports in 10 different states.”
Herres understands why some brokerages or franchises would be reluctant to embrace independent agent branding. She credits Windermere’s focus on service for the company’s ability to see the mutual benefit in allowing her to craft her own brand. “It’s a reciprocal relationship, an understanding that mine isn’t going to overshadow theirs,” she says. “It’s been a good thing to allow that kind of flexibility.”
A Need for Targeted Personalization
In the world of franchising—which runs the gamut from real estate to restaurants and hair salons to hotels—the marketing focus has tended to be more on the brand and less on local ownership, Reynolds says. “Many years ago, if you walked into a restaurant that was a franchise restaurant, you would see a photo of the store owner in the window. We got away from that,” he says. “There’s been an overemphasis on the brand, but that is changing.”
The reason for this shift, particularly in real estate, amounts to more than just a pendulum swing. Bortfeld credits big data for allowing agents to think of their customer base in a more targeted, individualized way. Where they may once have focused on first-time buyers or seniors, now agents can dig deeper. “We’re getting beyond demographics. We’re looking at attitudes, lifestyle groups—that’s a major shift that’s going to change our industry,” Bortfeld says. “We’re starting to evolve and get more mature as an industry, to start slicing and dicing.”
This data explosion led Coldwell Banker to develop an analytics tool that pulls together geographic information from mapping company Esri with other data sources, such as LinkedIn’s relocation insights, to find the “perfect buyer” for listings. “One-to-one marketing was sort of a buzzword 20 years ago but has really come to fruition today,” says David Marine, Coldwell Banker’s senior vice president of marketing. “The best agents are doing that personalization and marketing for their seller.”
Disruption From Teams
Teams and franchise companies sometimes endure an uneasy coexistence because teams have different marketing and technological needs than solo agents. That struggle struck Chris Watters as an opportunity. When the broker-owner of Austin, Texas–based Watters International Realty was thinking about ways to take his independent office of 15 agents to the next level, he structured new branches in Amarillo and San Antonio as equity partnerships. But seeing REALTOR® Magazine’s Residential Franchise Report back in 2015, he was inspired to think bigger. “It was a beacon of light,” he says.
After securing Federal Trade Commission approval in May, Watters began rolling out a franchise model that caters to teams. “A lot of franchises have to build tools for people who are selling four, five, six homes a year, and those tools are inadequate for a larger team,” he says. By targeting teams exclusively, Watters says he can develop resources that focus on their needs such as lead hand-off and accountability follow-up. He’s working to open offices in more than two dozen states and is seeking to affiliate agents who want to start or expand teams.
“We absolutely see teams as a growth opportunity,” counters Marine. Coldwell Banker, a brand more than a century old, has some of the nation’s top teams, he says, and the teams are often better recruiters than brokerages. For Coldwell Banker, the focus is more on culture than on offering particular team resources. “We find that teams are not actually seeking a specific tool or marketing system. [They’re looking for] the structure of an organization that allows them to grow.”
Whatever form it takes, support is the key to a successful franchise affiliation. “[Agents] are our clients. We’re here to support them and find them the tools to be successful,” says Bortfeld. “A brand isn’t just a logo; it’s about you as an individual.”