Well it’s been a while since I did my last post. Many things have changed in the real estate business. Systems, technology, corporate leadership, and the financial condition of many franchisors.
This post is going to be short and down to the hard facts. If you are considering purchasing a real estate franchise I want you to understand my statements. Your better off, in my opinion, purchasing one with only one figure head. What does he mean? In the early days of franchising, franchisors sold what are known as Regions. They did that to raise capital for expansion because they had very little funding. Over time these various regions took on a life of their own. Different management style, intellect, ability, leadership, personality, and even a different philosophy. That created a problem. Internal disputes were very prevalent. Different ad campaigns which distorted the visuals and which diluted the trademark and brand. Many of the so called regions were better run than that of the founder of the parent company. Smarter regions created a major problem. What to do with the parent company. They could do nothing, but went back and just grew their own successful business.
You have to understand that in a franchise everything is somewhat connected. Meaning you could be in a region that is owned by someone in CA. When the annual convention is held in some city outside of CA agents from all over the country attend. They then get to compare information and find out that their region operates to a different standard of franchise contract. Wow does that create a problem. One region has exclusive territories and another has address only. Contracts are different, renewal fee’s are different, office size requirements are different and it goes on and on.
That my friend is a dysfunctional franchise that is destined to crash. Remember GM went bankrupt. They had too many brands and hats to take care of. Ford almost had the same problem but woke up just in time. They got rid of Land Rover, Aston Martin, Volvo, Jaguar and other partnerships so they could focus. Now they are very profitable.
The only major brand I can think of that has one real leader is Keller Williams. One message, one figure head and one system. It’s do it his way or the highway. That is why they have 88,000 agents in the US and growing.
My advice is stay away from the franchisor with multiple figure heads. You do not need to get caught in an internal conflict. Your job as a salesperson or broker is to grow a business and earn an exceptional income. Stay away from someone else’s problem.
Now go out and be productive.