Wednesday, July 25, 2007

Franchise Fee and Capping Trends

Coldwell Banker, Century 21, ERA, etc. established the franchise fee model many still follow today by charging a flat 6% of commission – sometimes providing brokers rebates or caps on the back-side. Then models like Re/Max and Realty Executives followed with flat fee, 100% commission programs for agents. Today, Keller Williams has grown significantly with capping plans and a profit sharing model which enable brokers to compete well for agents in many markets.

Agents and brokers being independent minded appreciate choices. With that said, we at Real Living are taking our own path and incorporating a mix of plans – essentially providing brokers and agents with choices and options to better tailor their commission schedules. These franchise fees or “Service Fee” (as we at Real Living refer to them), options will enable brokers to recruit top performers and new licensees, which, in conjunction with our superior marketing, technologies, training and financial support will lead to growth of Real Living nationally.

Real Living is developing the foundation for national franchise growth and is the “next big thing,” in real estate franchising. We expect significant growth year after year and are growing with like-minded companies who expect more from a franchise partnership.

With that said, it is not all about the fees. If you are not providing value for agents you will lose them. This is evident from a recent announcement made by Keller Williams where they boas 40,000 new agents in the past year. If you do the math on their total number, this stat shows reflects a loss of around 20,000 agents in that same time period. Hence, value proposition is paramount.

To learn about Real Living, our tools, technologies and franchise opportunities with service fee choices enabling you to grow your business, visit us, e-mail me or call me personally 614-273-6084.


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Stephen John said...

Capping, a trend in some franchises, involves setting a maximum limit on the royalties or fees franchisees pay over time. This practice aims to incentivize growth by offering financial predictability and encouraging franchisee success while ensuring a fair return for franchisors. lawyer for motorcycle accident