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Local Real Estate > National Real Estate Franchises

 
real estate lockbox A franchise is an agreement for one business (the franchisee) to operate under another business's name (the franchisor).  Many well-known fast-food restaurants (including McDonald's) are franchises.

Many real estate companies are franchises, as well.  Most RE/MAX, Coldwell Banker, and Century 21 offices, for example, are franchises (RE/MAX claims that it has 6,100 franchise offices in more than 62 countries; Coldwell Banker says that it has 3,700 franchise offices; and Century 21 reports 7,800 offices in 42 countries).

Those franchise real estate offices are independently owned and operated but, obviously, carry the well-known name of the national company.  The franchise owners pay monthly royalties and advertising contributions to the franchisor in exchange for using the name and for the national advertising that the franchisor conducts.

The benefits of owning a franchise real estate office over an independent non-franchise is that the owner automatically has the brand recognition that accompanies the company name.  But the costs can be high:  not only does the franchisee pay monthly payments to the franchisor but also pays start-up fees (which include fees paid to the franchisor as well as the costs of changing signage and stationery to the franchisor name).

The National Association of Realtors reports that in 2005, 33% of real estate offices in the U.S. were independent franchises, 50% were independent non-franchises, 11% were subsidiaries of national or regional corporations, and 1% were structured in some other way.

Home buyers and home sellers who are looking for real estate agents may be tempted to go straight to the national name.  But the office you choose — and, more importantly, the real estate agent — are much more important than the name on the office door.  Buyers and sellers should choose a real estate firm based on the good reputation of the local office rather than the size and reputation of the national franchise.

The real estate firms listed below are leading franchise companies, under whose umbrella the local offices receive marketing support, training, and other resources.

National Real Estate Franchises


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National Real Estate Franchises