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Independent or Franchise: The Choice Isn't Always Clear

by Tracey C. Velt

Choosing a real estate office can be a very personal decision. Do you go with the local independent that offers nurturing or the franchise with the fancy tech tools? The truth is that both have their advantages and disadvantages.


Among REALTORS®, it is a pretty even split between those affiliated with a franchise versus an independent. About 60 percent of Women's Council members are affiliated with a franchise organization, with most (51 percent) affiliated with a national franchise, according to recent member survey results. NAR offers a handy overview of what 32 top franchises have to offer. Click here.


JillRudlerFor Jill D. Rudler, GRI, a sales associate and team leader of The Rudler Team of Keller Williams Excel Realty in Westerville, OH, the decision to move from an independent office to a franchise is one that can’t be taken lightly. Rudler spent 34 years working with an independent real estate office.

"The biggest thing it offered me in the 1980s and 1990s was flexibility," she says. "I was at the top of their company for 15 years, so I was able to get more office space and run things differently from a franchise agent or team," she says.

In 2012, after almost a year of research, Rudler chose to move to Keller Williams Realty. "I looked at all the companies, even another extremely large independent brokerage in my area," she says, "but when it came down to taking my business to the next level, I chose Keller."

We spoke with some veterans who have worked for both independent offices and franchises to discuss the pros and cons of each.

nancygarciaWhy a Franchise?

For Nancy Garcia, GRI, SRES, of Coldwell Banker Apex in Richardson, TX, a franchise is all she's ever known. Like many REALTORS®, Garcia was drawn initially to the association with a strong, respected brand. "I came out of the corporate world, so branding was crucial to me," she says. In addition, she had just moved to the area, so she didn’t have a base of clients from which to procure. "I needed the reputation of the Coldwell Banker brand to lend credibility to my services," she says. "Coldwell Banker can run many commercials on television. Most independent brokers just don’t have that kind of budget."

sherrisouzaSherri Souza of Independent Women Brokers in Livermore, CA, and Women’s Council's 2014 Financial Secretary, recognizes the franchise advantage. "I've only worked for independent brokerages, but the regional and national branding that a franchise does is a real benefit. Being part of that bigger picture does something to entice consumers," she says.

However, she is quick to add that, "In my experience, people choose you because of who you are, not because of the franchise with which you are affiliated, but the branding of a franchise gets the consumer started in a particular direction." As an independent broker, Souza finds that she has to be very active in the community to compete with the franchise branding.

Technology Tools

Real estate technology tools can cost sales associates hundreds of dollars a month to build and use. Many independent brokers offer a web presence, but few smaller independents offer lead generation and contact management systems. Sales associates must do their own research and buy their own systems should they want that type of technology.

For Garcia, Coldwell Banker's website was what drew her to the franchise. "Coldwell Banker has one of the top 10 websites," she says. Rudler also highlighted the technology tools and systems as a draw for her when joining Keller Williams. "My life is easier than when I was with an independent because I have access to computer systems that track leads and generate them for me," she says. Keller Williams uses Market Leader as a lead generating system and the KW eEdge marketing platform, which allows agents automated marketing tools for following up and increased communication.

Coldwell Banker offers its own branded YouTube website and property search apps for the iPad, iPhone and Android devices. "The franchise amenities package gives you a no-brainer approach to the business," says Souza. "The problem is you have to pay for the entire package, even if you only use certain parts of it." That's why she prefers to develop her own transaction and communication tools. "I only pay for what I use," she says.

Moreover, she says, she has the freedom to do the advertising that she wants. "Many franchise brokers have rules about how to advertise the business; I don't have that."

International Reach

Real estate is a global business. According to NAR's "2013 Profile of International Home Buying Activity," for the 12 months ending March 2013, the total sales volume to international clients was estimated at $68.2 billion, which is approximately 6.3 percent of the total U.S. Existing Homes Sales (EHS) market of $ 1.08 trillion for the same period. Those are big numbers and agents with franchises that have a global reach are benefiting from these sales.

"Keller Williams offers some incredible systems that offer me the support of peers from around the country. It's not just local," says Rudler. "It helps with integrated referral systems that are intrinsic with a big franchise."

Garcia agrees. "Our branding is international. Coldwell Banker supports 51 countries. My client base when I was in the corporate world was international, so having solid global relocation and referral services was important to me," she says.

Training

In an ever-changing real estate landscape, learning to adapt to different markets and thrive is vital to your success. "For me, the biggest benefit to Keller Williams is that the training is helpful. And, it's worldwide training, not just local. They have systems that help you recruit your team, train them and motivate them," says Rudler.

Souza admits she does miss the camaraderie of an office. "That's missing from my business, so recently I created a group of independent brokers to mastermind on a monthly basis. We have an agenda and a list of hot topics. It's my outside support system, and I learn so much from them," she says.

The truth, says Souza, is that it takes courage to be independent. "Individuality is a significant thing for me. Now, I can stand out from the crowd, and there’s not as much pressure. But you have to be self-sufficient. There isn’t anyone to bail you out. For someone who truly seeks independence and wants more control over his or her business, independent brokerages can offer that," she says.

Rudler agrees, "Someone who is considering getting into the business part-time might choose an independent broker because there is less pressure to perform. However, the reason I switched is that I needed to develop my business, and the only way to do that was to move to a franchise. If you take this as a serious business, in my opinion, you must go with a company that supports you with the systems and training necessary to move forward."

Choosing an independent office over a franchise takes a lot of thought and personal reflection. "It's very personal," says Garcia. "New agents need the training of a franchise. In addition, it depends on the area you’re servicing. In some areas, independent brokers have a very strong presence and offer just as many tools as franchises do."

Overall, it comes down to one thing: structure. "I can make more personal choices in my business," says Souza. "I can employ the people who can help me best, and I can expand into a team opportunity with more cost control."

Says Rudler, "If you don't have structure in your business, independent or franchise, then you won't have the quality of life you’re looking for. You must create a business worth owning so that you fund the life worth living."

Tracey C. Velt is an Orlando-based freelance writer.

 

 

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