It may not be a natural choice for some, but real estate franchising is a worthwhile endeavor for the right kind of entrepreneur.
Words by Kieran McLoone, deputy editor for Global Franchise
Investing in property has always been considered a financially savvy choice, and history has shown that – for the most part – the buying and selling of homes or commercial space is a good way to diversify and bolster your income.
Not surprisingly, this has also opened up the real estate market to franchising. Hundreds of franchise concepts now exist around the world to facilitate property sales, and although the industry is prone to fluctuations, some of the biggest players have grown into hugely successful businesses.
Take the likes of RE/MAX, for example, which initially entered the market in 1973, and has now developed into a household name. And why wouldn’t it? At 7,350 offices around the globe populated by over 110,000 agents, it managed to achieve the kind of numbers that emerging franchises can only dream of.
It’s not just growth figures that highlight why real estate franchising is a worthwhile cause, of course. In 2018, it was estimated that the real estate franchise industry produced roughly $53bn in revenue. Just the year before, the construction of new residential and industrial buildings in the U.S. added $1.03tr to the economy. Buildings mean big business, and for the right kind of franchisee, they can also mean a rewarding career and an exponentially growing network of like-minded partners.
Easy money
One brand looking to carve up a segment of the real estate franchising market is easyProperty. Relaunched by CEO David Brierley in January 2020, easyProperty almost immediately ran into the first U.K. lockdown brought about by the coronavirus pandemic. Despite this, it continued to attract investment from franchisees that saw the potential of the sector, and by September, it had expanded to 41 locations and announced aggressive expansion plans for the new year.
“We’ve got people who are in business and who see property as an interesting way of earning a living – and a reasonably lucrative one”
“We attracted a mix of existing high street estate agents who see the future in more flexible working and more tech-enabled working,” says David Brierley. “And then we’ve got people who are in business and who see property as an interesting way of earning a living – and a reasonably lucrative one.”
The steady growth of easyProperty highlights a key aspect of the real estate franchise industry that investors from other market segments will find familiar: the inexorable shift toward tech. Rather than traditional brick-and-mortar offices, easyProperty instead handles much of the admin side of things online and has licensed agents who can visit clients on the ground to keep the human touch intact.
And in a world where businesses from every industry are struggling to justify a wholly brick-and-mortar approach, it’s ironic that a brand dealing in property is working on a solution.
“We term it ‘tech-and-touch’,” explains Brierley. “So the ‘touch’ is our licensed agents on the ground who can make a visit to a property and interact with the consumer. The ‘tech’ allows the consumer to interact 24/7, request viewings, book valuations. A lot of the work that the traditional agent would do over the telephone is handled via technology. Which is what the consumer wants; it’s what Amazon does. You don’t talk to anybody at Amazon, you just order it and it arrives. That’s pretty much what the consumer wants in all aspects of their lives these days.”
Be business-minded
You may anticipate that you’d need to have a comprehensive understanding of the property market to make it big in real estate franchising. After all, knowing when and what to buy or sell gives you the edge over less experienced competitors – right?
As it turns out, this isn’t always the case. While understanding property is certainly a benefit, the same way that studying QSR processes would help with opening a restaurant concept, it’s the more human elements of an entrepreneur that can make or break their ability to really succeed within this industry.
“It’s all good being a great estate agent, but if you can’t build a business and generate activity, then it’s not for you”
“We do a psychometric testing exercise to find the right kind of people,” says Brierley. “Basically, it’s great communication, great interpersonal skills, and a determination to make a business successful. It’s all good being a great estate agent, but if you can’t build a business and generate activity, then it’s not for you. I suspect there’s probably only 20 per cent of current estate agents that would make for good franchisees.”
This is especially true during the times we’re currently living in, where proactiveness and preparedness would allow franchisees to make the most of a dire situation. Thankfully, the real estate market isn’t as dire as others appear moving into a new year; U.S. real estate experts predict that the 2021 market will see annual sales grow over 10 per cent, compared with the five per cent in 2020.
If anything, the pandemic has only highlighted how viable real estate franchising can be for entrepreneurs from many different backgrounds. As Brierley explains: “One of our most successful franchisees at the moment is a lady with four children who she is home-schooling. She can balance her working around the schooling because a lot of people are happy to interact in the evening or morning – times that aren’t the traditional nine to five hours. It works really well for her, and I think that it gives people a work-life balance.”
So if you’re looking for your next investment venture, don’t overlook the possibilities contained within real estate franchising. It may not be an industry as viable for complete newcomers, but for those with business backgrounds, this affluent sector could build you a long-term franchising future.
