Home : Blogs : Jeff Fulgham Broker E-Pro ABR : T.U.P. Realty and real estate in Tupelo, MS

Franchise vs Independent

I had a request to do an entry on the differences between owning a franchise and being an independent. First of all I think if I was going to own a franchise I would go with the one I was with. Century 21 is a well recognized name and They offer an array of great services.

I think the biggest part of my decision to be an independent is control. I want to be able to control the direction my company goes. Now Franchises do give you leeway to run your business the way you want to an extent. However, I see a drastic change in the real estate business over the next few years. I believe the days of the huge franchise offices are coming to a close. I see the industry moving toward technology more than big fancy offices. I think that unless you are running a lean office you will not make it. As a independent I am free to adjust my commissions to compete with anyone. I am free to build my website anyway I want and offer any service I chose from that website. I believe the web is going to be the market place very soon.

Just look at the numbers. 70% of home buyers are beginning their search on line. The actual riding clients around and showing them homes is shrinking. We can look at homes on-line now and only go see the ones the client likes.

Another reason is I don't have to pay those franchise fees keeping my over head to a minimum. If I can keep that over head down I can negotiate my fees. If I don't want to charge 6% or 7% on a home I don't have to.

I think most people like to work with local companies. Being pretty much the only independent real estate company in town I believe I can attract people who wish to do business with a small local business.

I have found that people from out of town really don't care about franchises. If they find my website first they will use it to look for their home. If they are finding my site I capture them. If I ever get to talk with that client I do not lose them. Most of my business has been from the web and I have done a good bit of that business.

I hope I didn't ramble too much here.

Posted by Jeff Fulgham Broker E-Pro ABR on 11/23/2007 08:41 AM

Comments (16)

16 Comments on Franchise vs Independent

NOV

2007

I don't see franchises going away anytime soon. It's all about the marketing. As long as they have money to market, they'll be around. However, I DO AGREE that being an independent is much more satisfying. I have always believed it's the agent and NOT the company name that makes or breaks you. That being said, I do think newbies need a company name to utilize for training and credibility. I have never known a newbie that made it on their own with an independent that wasn't already serving a niche market.

You forgot to mention that franchises have the systems put in place. Systematized business have a 70% success rate. Those that do not have systems in place fail miserably the first year or so. Read the E-Myth Revisited ~ Michael Girger ` I will make you think about your decision. I am an independent inspection company that has systems for success built in. I am in my 7th year.

It all depends on the franchise. Best of luck to you.

Hi Jeff, Lots of reasons on both sides of this issue. Doesn't it really come down to the individual, goals, talent, drive, etc ? I noticed that many of the " new business models " have lost momentum in this market. The local KW closed as have some others in this area.

Franchise or independent it is still up to you. No matter they system who is going to implement it? We all know what to do now just get off our back side and do it. Plenty of business for all but more for the brokers that work at it every day. Thanks for your post.

Franchises won't totally go away...although I am seeing more doors close now than ever before....Agents are really getting tired of paying these high splits and not really seeing a whole bunch for them.

If you have been in the business a long time....your name should be what sells you..not the company!

I dont have any plans to establish my own brokerage, but when I was looking for a brokerage to hang my license I want through some of the same thinking you did. I am with a small local brokerage with systems in place to be successful. Its very close to the Zip Realty model ie the brokerage generates leads from the internet and passes them on to the agents. Ive been here 3 years and have not looked back

From where I sit the system in place at the franchise brokerages is to throw enough crap at the wall (agents) and see if some sticks

I think it depends on how you plan to market yourself. If you are in a small close knit community then being independent will probably work best. If you are in a major market where you need the name recognition, you might want to go with a franchise.

I have worked for two independent brokerages. The first was an almost franchise. We had to pay a transaction fee, a marketing fee and then our split. Granted they did a lot of advertising, but I only received one phone call from the ads. I am at a small independent now. No transaction fee or marketing fees are charged. We do have a split that is ok for our area. The problem is that the agents don't get a say in how we market and what is working and what is not. If they had only taken some of the money for the print ads and put it towards a really good website, it would have helped this year be great. They also are very focused on new construction over existing homes. Our market has shifted away from the new construction and they are stuggling to catch up.

Jeff

It all depends on you, your market positioning

we are in a social trend of rebellion and such

its better to be the little guy, now

Thank you all for your responses. I don't see franchises going away. I do see that they are going to have to change to stay afloat. I can advertise my company in the exact same places they advertise. I can advertise my listings in the exact same places they advertise. I can build business in the exact same way they do. The internet has istablished and inexpensive market place where the little guys in this business can survive. I could never compete in the newspaper and television market place with a national franchise. But in Search engines I can compete and in most cases beat out the national franchises for my specific area.

As far as systems in place I have been in this business for awhile and study all different types of franchises. My system takes the good from all types of franchises and combines them into one. Most of my agents are newbies yet they are out there doing good business. They stayed with me through all the moving around because I am excessable as a broker. They can come to me with anything real estate or other wise. I take care of them and train them well.

JAN

2008

Get the best of both worlds, national name recognition, lots of support, and run your business your way with almost no royalty fees to you and your agents, look at the Realty World franchise. We have been very happy with ours. Good luck in your new (renewed) solo venture!

JUN

2008

Jeff, did you go franchaise?

AUG

The old saying goes, be in business for yourself but not by yourself. The reason for joining a franchise is very apparent in today's market where the small independent office is being squeezed out of business. Agents want to work at an office where not only the broker is involved with every agent, but they have a set of systems and tools they can use to become successful. Most smaller independents do not have the time, resources or money to make these available. This is where franchising comes to play. A franchise offers a set of proven systems and tools that work. It is the job of the broker then to find the right franchise for that fits their wants and needs.

You will find that a franchise such as Realty World offers not only world class marketing systems and tools, but very low fees to help attract the best top producing agents. Call me for more info at 800 684-4984 or email me at brad@rwacorp.com.

SEP

I think that if you dont know the market and the "know how" of the real state business you should start working in a franchise. Then after a few years of experience, contact building and knowledge it will be almost dumb to stay with a franchise that takes your comissions in half and even in fourths if there is another broker. Good Luck!

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