FOR BROKERS: Franchise Report

Affiliation Up

BY ROBERT FREEDMAN

After operating an independently owned boutique brokerage for several years, Jeff Ristine changed course and last year affiliated with Weichert, REALTORS®, the national real estate franchisor based in Morris Plains, N.J.

“We had a difficult time recruiting and gaining market share [as a boutique],” says Ristine, broker-owner of Weichert, REALTORS®, Kingsland Properties, in Wheaton, Ill. “Going the franchise route allowed us to leverage both the name recognition and the proven systems of a franchise network.”

Although the lion’s share of brokerages remains independent — more than 75 percent of all residential real estate companies, according to the 2006 NAR Profile of Real Estate Firms — there’s no doubt that the move toward affiliation remains strong, especially as markets across the country remain in correction mode after the boom years.

Based on survey data compiled by REALTOR® Magazine for its exclusive biennial franchise report, presented here, major franchisors saw the number of affiliated and corporate-owned offices flying their flags grow by an average of 15 percent annually over the last two years, even with franchise fees rising an average of 9 percent annually.

The number of franchise choices is growing, too, with almost a dozen players emerging in the market in the last half-dozen years, many of them touting business models built around discount or fixed-fee pricing.

If you’re thinking about affiliating your company with a national or regional brand, whether through a franchise affiliation or a licensing agreement, you can use these survey findings to help you compare offerings.

View a PDF comparing residential real estate franchises.

View a PDF of the emerging franchise players.

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Compare this year’s franchise report with 2005’s report