Going Independent... A Personal Business Decision

By
Real Estate Broker/Owner with Erica Ramus - Ramus Realty Group - Pottsville, PA RM420589

This week I changed my real estate brokerage affiliation from a franchise and am now an independent. I’ve done a lot of soul searching about which path to take, and suffice it to say that at the end of the day, I see more value in my own name and my brand, than any franchise. Perhaps I should have gone down this path from the start, when I opened up, but that’s water under the bridge.

In cleaning out some files, I found a business card folder from the summer of 2007, when I attended franchise training and also a broker-owner conference. I was on a high, ready to set the would on fire, and collected a number of business cards from other broker-owners that summer. When I flipped through the cards, I had the brainstorm that I’d see how many were still in business, almost five years later. How many were still with the franchise, how many closed up shop, and how many switched affiliations? The answers may or may not surprise you.

What has become of other franchisees?

I had 25 cards in my file. That’s not a huge sample, but I think we can still see some trends from my random collection of cards. I googled every name to see if I could track them down.

The people to the immediate right and left of me were at franchise training were still in business, but had dropped the franchise and gone independent.

Four of the names in my book showed up nothing in google searches. I assume they had dropped out of the business completely. I know that one of them was out of business within 6 months (I had heard that right away, as it spread through our grapevine) so I knew I wouldn’t find him.

Five of the brokers in my pile of cards were still with the franchise. I noticed that three of those five were longer term brokers, whose cards I had picked up not at franchise training but at the conference.

Four had switched from one franchise to another (most notably, Keller Williams gained the most convertees, which confirms NAR statistics published each year about franchise growth).

The trend to go independent

But the biggest trend was in dropping the franchise to go independent. Fully 12 of the names in my stack pulled up in searches at independent offices not affiliated with a national name.

I’ve read numerous articles about the value of the brand, the value of being affiliated with a major national (or international) company. I’ve worked for a franchise office, I’ve owned a different franchise office, and after 11 years in this business, I just don’t see the need to push a corporate logo over my own brand.

You, the agent, either sell the buyer/seller client on you and your services, or not. There are great offices with Brand A or B or C and there are ones down the road that, to be honest here, suck. It’s not the logo the client buys into, it’s you the agent or you the broker. It’s Brand “Agent”.

At the end of the day the client only wants his problem solved: find me a house or sell my house. The logo on that sign should not matter more than the agent who puts the sign in the ground. Exceptional communication skills, solid knowledge of the market, and top notch marketing matter more than that logo.

A personal business decision

To argue the franchise side, they’ll say that they provide systems, tools and support to help the broker succeed. That is true, and if it were not then no franchise would succeed. The question is are you using those tools or not? Is the support really there that you need? Do you want or need their systems or do you have your own in place?

I am not sorry I affiliated with a franchise five years ago. I consider the price I paid to be my MBA in real estate brokerage. Affiliating gave me the courage to go out on my own, and in the beginning, I did take advantage of programs and tools to help me get running. But as time went on, I realized that my own office was morphing more into “my office” and I did not need the franchise support.

I would surmise many of the brokers who de-franchised in the past few years did it because of the money factor — to save money. That’s part of my decision as well. I run a lean operation and see how being independent will benefit our office with less fees for agents to pay, freeing up marketing dollars.

I listened in on a seminar the other day and the speaker said 50% of all new agents drop out within the first year, and 75% within two years. I’m happy to see that new franchisees failing are not at the 50% level, but the numbers above are sobering. I would say owners of franchises should be paying attention to the trends to un-affiliate.

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Rainmaker
500,242
Karen Baker
Sunset Beach and Beyond Realty - Sunset Beach, NC
Professional Help with Rapid Responses...

Erica ~ Years of experience taught you what was the best thing for you to do for YOU!! Kudos on your decision!!  We realized after our first three years, a pitiful mentor (who received 25% of our first two commissions), and a sad commission split, that we work too hard and long to share our hard earned money with anyone. We like the way we do things. We are accountable to ourselves. We answer to no one and expect nothing but the best, from us!!  Love your purple logo...

Feb 10, 2012 05:09 PM #78
Rainmaker
296,851
Nick & Trudy Vandekar
Long & Foster Real Estate Inc - Devon, PA
Realtors - Selling the Main Line, PA Lic AB067198

Congrats  Erica I agree that people use the agent in front of them, many of our friend know we are realtors, many ask over and over..."What brokerage are you with?" That is not as important as your skill as an agent or a broker. I see independants growing and franchises and big brokerages needing to be awake to their better agents breaking away to be independant. Good luck, I know you will do well having survived this long.

Feb 10, 2012 05:29 PM #79
Rainer
229,136
Linda Urbick
Keller Williams Realty - San Ramon, CA
San Ramon, CA Homes for Sale - 925.415.3046

Erica - congratulations on your decision. Go on your own is a tough decision, one that I am not ready to make. People deal with people and it is our brand that is chosen, not necessarily who we work for. Rarily do I get questioned about the company I am with--the question is "what are YOU going to do for me"

Feb 10, 2012 06:28 PM #80
Rainmaker
1,280,997
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

The internet is a great liberator.  I think independent is the way to go.  When the market recovers I think the large firms will have even more problems.

Feb 10, 2012 06:41 PM #81
Rainmaker
366,168
John DL Arendsen
ON THE LEVEL General Contractor, Crest Homes Factory Built Housing Dealer & Developer & TAG Real Estate Sales & Inves... - Leucadia, CA
Contractor, RE Brk, Factory Built Home Dealer/Devl

I was actually thinkin about buying into a franchise before I read this and a couple of other recently written posts on the subject. Thanks for the info.

Feb 10, 2012 06:53 PM #82
Ambassador
1,290,876
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

Thanks for all the replies. It all boils down to what works for you. If you're franchised and pleased, stay with it. If not, I see no harm in going on your own. In the end it was much less traumatic than I thought. The internet is a great leveling playing field and our site ranks higher than the "big guys" around me. Of course they're not on AR. Shhhhh

Feb 10, 2012 07:28 PM #83
Rainer
8,141
Jeff Tepermeyster
ProQvest Inc. - San Francisco, CA

Excellent and wise move to go on your own, not with the franchise. I'm an indeopendent broker myself. 

Feb 10, 2012 09:09 PM #84
Rainer
2,633
Marcanne Green
Windermere Real Estate - La Quinta, CA

Erica, You inspire me.  All of us with a Broker's license must ask ourselves at least 1-2 times a year why we have not gone on our own like you have.  It is a tough decision and I applaude your courage and wish you well!

Feb 10, 2012 11:40 PM #85
Rainer
2,964
Michael Duffy
United Country Real Estate - Kansas City, MO
Michael Duffy
I am the President of United Country Real Estate. We are an 86 year old franchise company and after reading this I thought I would share a perspective. What attracted me to this company after studying the other franchises and independents is that the other franchises did not sell real estate and independents could not possibly keep up with the rapid changes in technology. Let me explain. United Country is the only franchise system that actually advertises and markets listings on behalf of their franchisees. You will never see an ad for a listing other than United Country that is not placed and paid for directly by the listing office. We are 180 degrees different. We started in 1928 with a proprietary real estate catalog still used today to advertise local properties nationally. We also advertise local listings in over 65 national magazines, more than 100 newspapers across the country, on over 3,000 specalty web sites we own and operate, on hundreds of non owned websites, provide free buyer leads to our agents (over 350,000 currently in our shared database), and much more. I'm not bragging or selling, I'm talking about helping our franchisees win more listings, find more buyers and earn higher commissions by offering more and differentiated services to property owners. It's real and what real estate franchisors should provide. Not just a name on a sign and local website that cant be found on Google searches. Demand superior marketing, technology, training and solutions to enable you to offer something different and better than every other Realtor and grow your business. I would.
Feb 11, 2012 01:05 AM #86
Rainmaker
285,497
Kasey & John Boles - Jon Gosche Real Estate
Jon Gosche Real Estate, Boise ID - Boise, ID
Boise, Meridian, Ada/Canyon/Gem/Boise Counties

I work in an independent brokerage - have never worked in a franchise and we have done well with that.  I do have a very successful agent friend who won't live without the franchise name behind her, however.  -Kasey

 

Feb 11, 2012 01:36 AM #87
Rainer
45,006
Jairo Arreola
Aladdin Realty - San Jose, CA
VA Home Loan Specialist - SF Bay Area - South Bay - San Jose

Great Read. Good Luck being on your own! I have no doubt that you will be successful.

Feb 11, 2012 01:53 AM #88
Rainmaker
645,532
Stephanie/Bob The Ruiz/Miller Team
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Erica, I think the franchise has value in some consumer eyes.  But where I am, the franchise owner emphasizes that it is the agent that sells.  In the difficult market we are in in Ocala Florida, we have had anumber of agents strike out on the own.  I am watching to see if they survive.  Best of luck in your new endeavor and have a great 2012!

Feb 11, 2012 10:34 AM #89
Rainer
218,115
Akerly Real Estate Team Manhattan & Brooklyn Real Estate
Akerly Real Estate Team - Brooklyn, NY

Very interesting stuff.  We've always been on the independent side of things.  That being said, at least in the NYC market, I think there are some listings that are very difficult if not impossible to get without having a certain brand behind you.  Manhattan townhouse owners with $5 - $50mil homes seem to list 90%+ of their business with a handful of firms.  Similarly, certain firms will get 80%+ of the new development business.  

Feb 11, 2012 11:01 AM #90
Rainer
12,315
Bryan Stephens
Renown Realty and Property Management - La Sierra, CA
Looking for Homes in the IE Call Today - Inland Em
Thank you. This was helpful. I am debating about opening an office with a friend and going independent seems the way to go.
Feb 11, 2012 01:08 PM #91
Rainer
25,999
Randy & Nancy Selby
The Woodlands,TX Connect Realty.com - The Woodlands, TX

Just stay involved with things like Active Rain, Brian Buffini, and others to keep up with what is going on. That way, you won't get stale and do just fine. From this posting and some others that I have read, it seems to be a trend. I like your bright purple logo. I guess that I just like colors.

 

Feb 11, 2012 01:55 PM #92
Rainer
34,794
Jacqueline Drake CRS
Jacqueline Drake Realty - Saint David, AZ
Southeast Arizona land, farms & horse properties

Congratulations on becoming an independent brokerage. I wish you the very best. We might see more changes in that area over the next few years, it will be interesting.

Jacqueline Drake CRS

Jacqueline Drake Realty

Cochise County AZ

Feb 12, 2012 03:06 PM #93
Rainmaker
366,823
Sylvie Stuart
Keller Williams Check Realty 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagstaff, AZ

Congratulations on your switch and good luck in your new venture. It is interesting to watch the trends moving this direction.

Feb 13, 2012 08:17 AM #94
Rainmaker
61,521
Cheryl Dukes Real Estate, Agent with Solid Source Realty South Fulton Atlanta GA RE License #274930
Solid Source Realty, Inc. - Atlanta, GA

Good for you for having the courage to act on your dreams, Erica Ramos. Schuylkill real estate buyers and sellers are lucky to have you.

Feb 18, 2012 07:35 PM #95
Rainmaker
954,994
Joyce Kelley
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Well Erica I see you finally did it I have been looking since the 1st of January. The big thing for us is staying competative and and setting goals.

Feb 19, 2012 07:16 PM #96
Rainmaker
131,925
Matt Robinson
Professional Investors Guild - Pensacola, FL
www.professionalinvestorsguild.com

I personally think this business is hard enough without giving away huge percentages of your income in broker splits or franchise fees.  Good for you!

Oct 17, 2012 01:44 PM #97
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Erica Ramus

MRE, Schuylkill County PA Real Estate
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