Looking to break into real estate and own a successful business, but you’re not sure where to begin? The world of franchise owners can sometimes seem like uncharted waters. The real estate brokerage industry is worth about $155 billion, which is expected to continue growing over the coming years. Given the year-on-year franchise growth rates over the last couple of years, franchises are red-hot right now.
As of 2018, approximately 758,000 franchise establishments were employing nearly 7.88 million people. In today’s competitive real estate market, where experience is the name of the game, it’s hard to ignore the perks that come with owning a franchise. After understanding how real estate franchises work, some quick tips can help get you going.
Tips for franchise owners
Here’s a quick rundown of things you need to know before becoming a franchise owner:
1. Startup Vs. Franchise, Know What You Want
With 20% of startups failing to survive their first year and only 50% living up to their fifth year, the franchise route makes business sense for careful entrepreneurs on the lookout for stable, tested models for running a successful real estate business.
If you are looking to own a business while retaining the association with a top name organization in real estate, researching their listings would be a great place to start. With so many real estate franchise opportunities out there, finding an ideal real estate franchise before taking the plunge is essential.
2. Ensure You’re Well Suited for A Franchise Before Buying
If you are going to be one of the franchise owners who thrives, you’ll need to ensure you are compatible with the business. Since the parent company will want to see what you are good at and how well you’ll deliver, go for the opportunities you’re passionate about. When choosing the franchise to attach your real estate business to, go for a well-regarded brand. Have a clear vision and business plan for your brokerage.
3. What Cost Implications Come with Owning A Franchise?
Before taking on the challenge of running a franchise, find out how much it will cost to get the franchise up and running. How are you going to finance the business? Will you need support along the way? When entering a highly competitive industry, such as real estate, fully understand the cost implications that come with owning a franchise and examine the terms and conditions for each franchise opportunity.
4. Research the Area Where You Want to Open the Franchise
When starting a franchise, make sure you’ve determined a genuine demand for real estate in the area. Though it is standard procedure for franchises to research an area before offering an opportunity, do your research and investigate the area.
5. Check the Background of The Franchisor
Not all franchisors are the same; before starting a franchise, carry out background checks on everything about the franchisor. At the end of the day, you’re trading real estate under their existing business model and trademark. Look the franchise up on the Better Business Bureau and contact the American Association of Franchisees and Dealers (AAFD).
The Benefits of Owning A Discount Real Estate Brokerage Franchise
Listed below are some advantages of owning a real estate franchise has several advantages, such as:
1. Buying power — Your franchise will benefit from a big business network and the parent company’s collective buying power.
2. Business assistance — Franchise owners don’t necessarily need business experience to operate the business model. The parent company offers valuable assistance throughout the life of their business.
3. Low failure rate — The beauty of buying a franchise is that you’re buying an established and successful concept. Statistics show that franchises have a better chance of success.
4. It’s easier to secure finance for a franchise — Buying a franchise costs less than starting your own business of the same type.
Summing Up
Once you’ve decided to sign up for a real estate franchise, make the most of all your franchise opportunities and arm yourself with proper knowledge to make sure you’re all set for success.