An Autopsy of the Franchise Realty

Real Estate Broker/Owner with Wynd Realty

“They have become the real estate industry’s artifact of the modern technology revolution.”Brad Inman, Founder and Editor, Inman News

Condolences are pouring in from every corner of the real estate industry.  It is impossible to read any real estate publication without seeing references to the Zillow/Trulia merger and what it means for the industry.    Most, if not all comments, echo Brad Inman’s statement when he called the Zillow/Trulia merger “checkmate” for the national franchise.  That is checkmate, as in “game over”.

Critics have always been quick to point out, the real estate industry’s old guard; that being any national franchise working in concert with NAR, will bring a lot of baggage to a street fight with Zillow.    Could the national franchises ever over come their sins of the past?  Odds makers said no.

The Franchise Model is Tired— Franchise affiliation is a partnership.  The agent and the franchisor are in it together.   Again, back in the olden days, this may have had merit.   But, today we live in a service world.   Paying for and receiving a service is a closed loop transaction.    Partnerships, on the other hand, never really end.   No matter what an agent earns, the “partner” will take a significant cut, which will be independent of the partner actually doing anything or not.    If your partner can’t specifically state how they helped you, what kind of partner is that?

Localized independent brokerages will see thousands of franchise agents looking for affiliation.   While the national franchise label may have carried weight in its day, today we see almost the opposite effect.   Why are you still with a franchise?  Nobody wants to be the agent known as, the last to leave.   It’s like telling people you are with Blockbuster, and watching their faces sadden into that; “shouldn’t you be in a hospice” expression.

Technology Failures— In terms of baggage, the rise and fall of will most likely be the one sin the franchises find hardest to talk around.    At one time, not very long ago, held the dominant position within the industry by an unbelievably wide margin.  Today, their position is at best a distant 3rd.    With the Zillow / Trulia merger, the old guard’s showcase brand, “” goes from being a “must have” to not even being in the discussion.  And, the speed in which that transition happened can only be described as nothing short of amazing.

Technology Future is Doomed—Technology, or lack thereof, is obviously one of the underlying causes in the decline of   Herein lies another problem for the national franchise.   Historically, agents have cited their Broker’s technology as a differentiator that gave them an edge.   The national franchise name with its large financial backing gave agents confidence they were getting best in class in terms of the latest technology.    Oddly, many agents, even today, still think that.

Zillow is a technology company.   Their founders were engineers at Microsoft before they created Expedia.   After their success of Expedia, they founded Zillow.    The point is, it will be increasingly difficult for the franchises to position themselves as technology experts against the likes of Zillow.  Trying to out-tech Silicon Valley is the losing proposition the franchises are faced with.   And, if the Silicon Valley reputation of winning at all cost hold true, there is simply no way the franchises will be allowed to ever have a technology advantage.

NAR is a Bummer—The rank and file of the real estate industry hold very little in common.  But on this point, we have nearly universal agreement; NAR is a waste of money.

Atlanta’s MLS, FMLS, is not owned or operated by NAR.  Atlanta-area agents are NOT forced to join NAR.   The jealous eyes of the nation’s realtors can only dream about what Atlanta agents have always had.   No mandatory dues!  If your Broker tells you NAR membership is a requirement for affiliation, go to another Broker.

Old Age—Time catches up with everyone.  To NAR’s credit, they managed to keep a trillion dollar industry in a frozen-like state for multiple generations.   Basically, they were able to enforce a very one-sided business model, founded in the 60s/70s, to remain in tact for nearly 50 odd years.   Enough already.

No Downside— There is absolutely no reason for franchise agents to not try an alternative form of affiliation.  If some reason it doesn’t work out after 6 months, agents can always return to the womb of the franchise.   Trust us, agents will always be able to find a franchise.      That, and no matter where you go, BHGRE Metrobrokers will be calling every six weeks to remind you how great they are.   (Its in their “tools”!)

Historically speaking, questioning the need, value and cost of Realtor Boards was the strategic difference that started Wynd Realty in 2007.   Today, Wynd Realty is proud to say over the years we have been responsible for Atlanta-area agents saving more than 1M dollars in unnecessary Board and Association fees.   So what would have happened to that money?  God only knows.    (Insert your favorite MC Hammer money joke here)

Today, we stand at a similar crossroad.   Technology has evolved of course, but more importantly, consumer confidence and trust has shifted more toward buyers and sellers getting their information from independent portals over the traditional 1970s style national franchises.

Seven years ago our message was to, “Ditch the Board”.  Today our message is: “Ditch the National Franchise”.   Don’t pay NAR.  Never pay a split.  Control your costs and own your message.

The franchise business model is done!  In many ways, it was never about the success of the agent.  If so, why saddle agents with oppressive fees and high commission splits?  The franchise, despite the millions in advertising claiming otherwise, was only ever looking out for the franchise.


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