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Field Guide to Franchises vs. Independent Firms

(Updated March 2014)

According to the 2013 National Association of REALTORS® Member Profile 56% of all REALTORS® are affiliated with an independent, non-franchised company. In fact most Realtors are likely to be affiliated with an independent, non-franchised company. The decision to join a franchise or an independent firm can be confusing. The pros and cons of each option are examined in this Updated Field Guide. (D. Winchester, Information Specialist)


Firm Affiliation of REALTORS®

  • 56% of REALTORS® are affiliated with an independent, non-franchised company.
  • While brokers and broker associates (62%) are most often affiliated with an independent, non-franchised company, sales agents (50%) are more evenly split between independent non-franchised and franchised companies.
  • Less REALTORS® reported an affiliation with a franchised company (40%) than with an independent company (56%).

Source: The 2013 National Association of REALTORS® Member Profile


Franchises...

2013 Franchise Report: What They Offer, (REALTOR® Magazine, July/Aug. 2013).

2011 Franchise Report: What's in a Name? (REALTOR® Magazine, June 2011).

Franchise can help you afford retirement (Inland Valley Daily Bulletin, Sept. 24, 2011).

10 Reasons to Purchase a Franchise (Entrepreneur, Sept. 24, 2009).

Favoring Franchises (National Real Estate Investor, June 1, 2009).

The real estate franchise decision: A profile of some of the largest (About.com).

2007 Franchise Report: Affiliation up (REALTOR® Magazine, Sept. 2007).

Merge, Die or Thrive? (National Real Estate Investor, Apr. 1, 2007).

Top 10 reasons for buying a franchise (Entrepreneur.com, Dec. 2007).

Frequently asked questions about franchising (Franchising World, June 2005).  Q

Advantages & challenges of franchising (Franchising World, June 2005). Q

Which should you choose—a national or local firm? (Realty Times, Nov. 2004).


...or Independents?

Decline of the Independent Broker-Dealer, (Investopedia, May 6,2013).

Leaving a real estate franchise to become an independent broker (AGBeat, Feb. 5, 2012).  

Independent real-estate agents skip trend to join corporate franchises (Chicago Business, Jun. 28, 2010).

Merger of independents bucks buyout trend (Realty Times, Feb. 5, 2007).

The galvanization of the independent broker (Realty Times, Jan. 2003).

Small firms dominate real estate industry, survey shows (Realty Times, Apr. 2002).


What Does the Research Say?

Comparing Different Types of Agencies (Realty Times, Apr. 16, 2010).

Franchising in residential brokerage (Journal of Real Estate Research, 2006). Q

Factors associated with survival of new Ohio Realtor® Associates (Journal of Real Estate Practice and Education, 2003). Q

Residential real estate brokerage efficiency and the implications of franchising: A Bayesian approach (Real Estate Economics, Fall 1999). Q

The efficiency of franchising in the residential real estate brokerage market (Journal of Consumer Marketing, 1998). Q

Measuring the efficiency of residential real estate brokerage firms (Journal of Real Estate Research, 1998). Q

Determinants of real estate licensee income (Journal of Real Estate Research, 1997). Q


Useful Websites

Buying a Franchise: A Consumer Guide (Federal Trade Commission, Feb. 2008).

Franchise vs. New Business (CCH Business Owner's Toolkit, 2005).

Franchise.com


eBooks & Other Resources

Books, Videos, Research Reports & More

The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800-874-6500 for assistance.

Real Estate Confronts the Future (Mason, OH: South-Western, 2005). HD 1375 SWCR

Business lessons for entrepreneurs: 35 things I learned before the age of thirty (Mason, OH: South-Western, 2003). HD 2346 C89

Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Field Guide to Appraisal of Real Estate Offices

Field Guide to Family Firms

Field Guide to Opening a Real Estate Brokerage

InfoCentral Blog


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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.