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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Comments 97 New Comment

Rainer
33,405
Jacqueline Drake CRS
Treating you as I like to be treated
Jacqueline Drake Realty

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

February 12, 2012 03:06 PM
Rainmaker
332,633
Sylvie Stuart
Home Buying, Home Selling and Investment - Flagstaff, AZ
Keller Williams Check Realty 928-600-2765

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

February 13, 2012 08:17 AM
Rainmaker
49,878
Cheryl Dukes, Realtor
South Fulton Georgia Homes For Sale
Solid Source Realty, Inc.

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.

February 18, 2012 07:35 PM
Rainmaker
809,659
Joyce Kelley
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.
Charles Stallions Real Estate Services Inc

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.

February 19, 2012 07:16 PM
Rainmaker
124,583
Matt Robinson
Pensacola Real Estate (850) 292-4000
ERA Emerald Coast Realty

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!

October 17, 2012 01:44 PM
Ambassador
1,200,689

Erica Ramus

MRE, Schuylkill County PA Real Estate
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