Michael Russer, a.k.a. Mr. Internet®, is CEO of Russer Communications. He is a leading speaker and author in the real estate industry and has been writing about Internet marketing and virtual outsourcing since the dawn of the commercial Internet.
Franchising Your Brand
Make money by building a successful business that’s easy for others to replicate.
May 1, 2006
When you hear talk of real estate franchising, it’s typically in reference to large organizations that offer turn-key branding and business systems for broker-owners. But thanks to the Internet, individual practitioners can build strong online brands that can be franchised or licensed to other practitioners as a source of additional income.
Franchising is offering a turn-key brand to independent businesspeople for a fee. Franchisees benefit from having an established brand and business model that’s already proven itself to be successful, while franchisors benefit from income generated by franchise fees.
However, creating a full-fledged franchise is very expensive, time consuming, and highly regulated — factors that may preclude individual practitioners from starting their own. But luckily, franchising isn’t the only way to take a unique branding idea and turn it into cash.
Licensing: A Viable Alternative
Hiring an intellectual property rights attorney to create a solid license agreement is much easier, quicker, and far less expensive than creating and launching a franchise. Yet, just like a franchise, you will receive a fee from each person to whom you license your brand. Here’s how it works:
Many real estate professionals find great success by specializing in one or more targeted niche markets. As a result, they create a viable “brand” that has wide appeal among consumers in their target audience. Oftentimes, a core part of their brand is a unique and memorable Web site, which reinforces their niche and generates business.
These online brands can be licensed to practitioners in other locales who want to specialize in the same niche but don't want to spend the time or effort to create their own brand from scratch.
One of the best examples of this comes from Joe Tyne, a real estate practitioner in Fort Hood, Texas, home to a large military base. He specializes in working with buyers and sellers who are in the military, as is so powerfully evidenced by his CaptionJoeAction.com Web site.
In creating this Web site, Tyne realized that he not only had a viable and unique brand, but one that could be licensed to other real estate professionals serving other military markets. One of Tyne's first licensees was Harry D'Elia in Glendale, Ariz. There, Captain Joe Action serves Luke Air Force Base via www.LukeAFBRealEstate.com.
By licensing the Captain Joe Action brand, D'Elia was able to get up to speed almost immediately in carving out his niche for the military market in his area. Meanwhile, Tyne was able to collect a licensing fee from every market that his Captain Joe Action brand serves — a favorable situation for all involved.
Another Variation on Licensing
Another unique twist on the branded licensing idea comes from Jay Izzo of the Linda Craft Team in Raleigh, N.C. Izzo created a special My Executive Mansion site that caters to a very exclusive group: buyers and sellers of luxury homes and mansions.
Instead of licensing this successful brand to practitioners in other geographical areas, Izzo decided to turn the site into a branded portal through which real estate professionals around the country can post their mansion listings — for free. So how does the site generate additional income?
Practitioners must pay a fee if and when their properties sell via a lead from the Web site. This means that real estate professionals can post their properties on this site and use the site as a powerful differentiating tool during their listing presentations.
However, the Web site doesn’t allow just anyone to post listings. To protect the site’s exclusivity, Izzo and his team require that all participating practitioners demonstrate that they are full-time real estate professionals specializing in this market niche. Practitioners must complete a comprehensive questionnaire before they are given access to post to the site.
Targeted Branding Is the Key
It’s important to note that in each of the cases above, the licensor created a highly targeted brand that could be used effectively by other practitioners. The Web sites weren’t focused on any one real estate salesperson, but on the business brand and the consumer’s needs. Otherwise, the sites simply wouldn’t be as valuable.
Not only can niche Web sites open the door to franchising or licensing income, they also can form the foundation for a lucrative exit strategy. If you have a successful real estate site and the financial data to back it up, you’re likely to find interest from many buyers when you’re ready to retire.
No longer is leveraging a brand the sole purview of large organizations with tons of cash and armies of attorneys. Clever real estate practitioners can create another cash-flow stream for themselves beyond just doing sales. And, in the process, other practitioners can take full advantage of these innovators’ creativity to create a targeted presence within their markets.