New Relocation Company Spawned from Chicago Brouhaha

February 1, 1998

Coldwell Banker will set up a relocation department in Chicago following complaints from some area brokers about a decision by Coldwell Banker's parent company, Cendant, to steer relocation business to two independent brokerages in the area.

Who gets the relocation business is specifically the decision of Cendant Mobility Services Inc., a subsidiary of Cendant Corp., the mega-company created in December with the merger of HFS Inc. and CUC International. Cendant owns Coldwell Banker, along with Century 21 and ERA. At issue are five-year contracts.

Coldwell Banker President Alex Perriello says Coldwell Banker hasn't worked out the details of the new relocation department yet but if it’s successful, the company may try it in other areas.

The situation in Chicago arose after Cendant, then HFS, purchased PHH Relocation last April and merged it with Coldwell Banker Relocation Services.

In October, Cendant gave the independents who previously had contracts with PHH a majority of the newly combined bigger relocation pie, leaving the Coldwell Banker brokers feeling shut out.

Dave Colmar, broker-owner of Coldwell Banker-1st American, Lansing, Ill., feels shortchanged because the new Coldwell Banker relocation department will not offer the same wide range of contacts he had with the large relocation arm it replaced. “I feel as if I just went to the smorgasbord and there was nothing left but cottage cheese,” says Colmar.

When HFS officials purchased PHH, HFS, in private letters and public statements, repeatedly promised to use the highest-performing brokers regardless of their affiliation. But the Chicagoland Coldwell Banker brokers never expected they'd lose all the referrals from the old Coldwell Banker relocation business.

They're also angry that Chicago independent Baird & Warner has used the Cendant contract to recruit salespeople via direct mail, telemarketing, and newspaper ads.

Baird & Warner says it has done nothing unusual. “Have we mentioned this lucrative contract to potential recruits? Absolutely,” says Denise Reardon, president of the Baird & Warner Corporate Relocation Group. “Were we proud to be asked to be Chicago's principal broker for [Cendant]? Absolutely. Do we want everyone to know? Absolutely.”

The Chicagoland Coldwell Banker brokers aren’t the only Cendant franchisees upset by Cendant Mobility's contracts with independents. In Connecticut a broker asked to terminate his franchise over the issue, and a New Orleans broker inked a franchise agreement believing he'd get relocation business, but it was later given to an independent competitor.

The hard feelings also extend beyond Coldwell Banker. A northern Virginia Century 21 office says it was cut out by a Coldwell Banker franchisee that’s no more qualified to get the relocation work than the Century 21 office. “Does it hurt? Yes,” says the relocation director.

Cendant Mobility says the brokers’ hard feelings are premature. “In major markets our plan has always been to work with more than one broker, and in complex markets, such as Chicago, the process of identifying all our network brokers is still ongoing,” says a Cendant official. He expects to finish the job by Feb. 1.

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