An innovative real estate franchise shouldn't implement the typical precentage of royalty charges to their franchisees (in the real estate industry the standard is 6%). Of the dozens of real estate franchises available, I would estimate about 90% of them offer this type of royalty structure. Perhaps by a lack of imagination or a desire to blend in, these companies all follow suit of each other. Area Pro Realty has instituted a unique royalty system. Instead of charging a large percentage of a franchisees royalty, we have instituted a system where franchisees only pay an amount per agent per month. Therefore, the most productive a franchisees office is, the more money the broker keeps, not gives away.
To be the best real estate franchise, you have to think outside the box. Before researching one of the many real estate franchises for sale, I would suggest analyzing your needs and evaluating where you think the real estate market is headed the next 5 years. Then, pair up with a company that will fulfill your goals and economic outlook.
Michael Volkin is the president of Area Pro Realty, a new national real estate franchise.