Throughout the 60’s, 70’s and 80’s the modern real estate franchise machine emerged creating a new service and marketing partner for traditional brokerage companies throughout the United States.
Century 21, ERA, Coldwell Banker, Realty World and in the late 80’s and early 90’s Prudential entered the crowded field fueled by their acquisition of Merrill Lynch’s brokerage houses.
The early franchisors flourished as they attracted brokerage firms to their franchise promises associated with brand recognition, marketing tools, advertisement, national relocation, referrals, training and business support services. In exchange for their franchise services they were paid handsomely, usually extracting a fee of 6-8% fee from all gross brokerage receipts.
Inherent within the franchisor’s model is the concept of territorialism, the promise or illusion of exclusive access market presence, tools, economies of scale and owner support that come from association with a large national entity.
In addition to the notion of territorialism provided by franchisors, is the idea of local market control for those who have buildings, physical presence, a unique brand statement through yard signage and other advertisement vehicles. During the 40 years of franchising boom, the brokerage business model utilized was quite simple.
During this time, a broker established presence in a geographic market area, leased or purchased an office, furnished the office, hired administrative staff, set up the telephones, copiers, typewritters (yes, back then typewriters were a mainstay), office supplies and took all of the financial risk associated with capitalization. The franchisors sought out the market players, assigned or implied territories through the franchise agreement and began to collect their fees with the promise to each broker, "you in charge of your market."
That was then, this is now. No one could have predicted the coming technology explosions that would provide us with the capability of operating a brokerage business without walls, territories, office assignments and personal guarantees. The office-less broker, with cyber agents capable of penetrating any market, interconnected with Internet systems and tools is the here and now model. e-Partner believes that it is the "third wave" and the preferred model of the consumer.
In addition, e-Partner believes that the traditional brokerage firm (we define a traditional firm as any company with extensive office networks within a geographic region), will eventually give way to a more lucrative and preferred cyber model that is devoid of the overhead, practices, policies and personnel who are irrelevant to the transaction performed by skilled agents sprinkled throughout the market.
The traditional models that were birthed in the franchise era of the last 40 years are no longer necessary in their current form. However, if they re-tool their approach to market expansion and franchise development, moving toward the cyber model, they could become highly competive and bring true value to the brokerage equation.