Franchise or independent agency — which is best for estate agents?

Big franchise brand vs small local brand. An obvious choice if you are an estate agent looking to join an agency, right? Not these days. Here is why:

  • The business landscape is changing with new real estate models. What worked 10 or 20 years ago may not work so well, or at all, today. New and existing real estate companies are constantly challenging the status quo with many disruptive new real estate models being launched. As an estate agent, you need to ask yourself: “what makes the real estate agency I want to join unique and sets itself apart from its competitors? Do I share their vision? Do I want to join an agency with a traditional or a completely different business model?”.
LeadHome, one of the disruptive real estate models launched in South Africa.
  • The internet is a great equalizer. Small and big estate agencies now compete with each other on the same property portals, social media channels and in many cases, the same back-end software. The tools are there for everyone. A tech-savvy agent joining an agency who has outdated systems or don’t know what a tweet is, will feel frustrated soon. Since most of your leads will probably come from the internet, you should have a careful look at the systems the agency provides and on which portals they advertise. Also, have a look at the quality of their listings, do they portray a professional online image you can associate yourself with?
  • Global vs Local reach. Franchise real estate brands are expanding worldwide at a rapid pace. With this, brand exposure comes in numbers, with a lot of real estate companies focusing on their office and agent numbers. You reap from years of investment of refined business models and large national investments in marketing. On the other hand, there are a lot of boutique independent agencies who do really well in their local neighborhoods: there is the personal touch of (in many cases) a family owned business and a stamp of local authority that promises more personal one-on-one service with clients. Business is not regional anymore, but real estate is local. Interesting to note that in the USA about 59% of realtors are affiliated with independent, non-franchises companies. Independent agents also outnumber franchise agents in South Africa and Namibia.
  • Commission structures and benefits. Gone are the days of basic commission splits between agents and agencies. There are now a variety of options that provide higher commission splits, company benefits, and profit sharing models. Some of the newer models also introduced fixed salaries. What will work best for you?
  • Training. Franchise real estate companies provide structured training courses and material that have been curated over the years. On the other side, many independent agencies outsource training to industry organizations and experts. Online training is, however, a game changer in my view, allowing agents in remote locations (and with busy schedules) to get professional courses at their own pace from the comfort of their home. Either way, the level of training an agency can provide for agents to maximize commission, can be a distinctive draw-card.
Keller Williams South Africa franchise training in action.

Joining a real estate franchise agency

  • National brand recognition (instant credibility)
  • National referral systems
  • Structured and formal training programs
  • Peer recognition on a national basis
  • Big buying power for marketing and advertising
  • Business models that evolved over time
  • Less freedom to experiment with the business model
  • National offices makes it easy to relocate and transition relatively easy
  • Turnkey marketing solutions
  • Large national or regional listing inventory
  • Size: large franchise can sometimes feel more impersonal than independent agencies
  • In some cases unique online management systems
  • Restrictive farming areas for many
  • More corporate environment

Joining an independent estate agency

  • The stamp of local authority and credibility
  • Personal touch of family owned business
  • Focus on single product category rather than a more generic approach
  • Freedom in marketing strategy allowing more creative control over brand
  • Less red tape and more flexible business model that can adapt quicker
  • More individual attention or coaching in many cases
  • Less competition for leads within an office
  • Freedom to work anywhere with no restrictive farming areas
  • Large listing inventory only if part of a multi-list system
  • Smaller marketing budgets
  • More cooperative than corporate environment
  • Brand recognition might be an issue outside the local neighborhood

That’s a lot to chew on, each has its merits. One of the things you should however pay careful attention to is the fact that:

At the end of the day, the brand is as good as its people.

Both franchise and independent agencies can be mediocre or industry leaders, no matter what resources they have available to them.


Try to interview as many real estate agencies as possible (both franchise and independent). Yes…you interview them. Estate agencies need you more than you need them. Questions to ask when you interview can include the following:

  • What training do you provide? Mentoring in your first year is critical and should be on the top of your list in selecting an agency. But even experienced agents can benefit from additional coaching to keep up to date with the latest legislation. How often is training provided?
  • Will you work solo, within a team or under the mentorship of an experienced agent?
  • What commission structures do you offer? Are there any fixed monthly desk fees involved with higher commission splits? What other deductions are made from commissions?
  • What internet systems do you offer? Which management systems do you use and which portals do you advertise on? Does the franchise have a website that keeps up with the latest trends (responsive to work on any device, fast and user-friendly) and is kept up to date? Do you manage your own listings online or is it done by a central office administrator? Are there additional online marketing fees involved? Does the agency have a Facebook page to reach their local community? What else does the agency do online that differentiates them from their competition? (e.g. Google Adwords marketing campaigns).
  • Ask the hard questions. Each agency will emphasize the positive and try to ignore their shortcomings.
  • What is your reputation and market share like? What market share does the agency have including the current number of active mandates and what does their sales history look like? Do they focus on local areas or are mandates scattered all over the place?
  • Online reviews: Do your homework and Google them before your interview. What is said about this agency or brand on social media?
  • What is your community involvement like? How involved are the agency with community projects? (which is a great way of building brand recognition).
How involved is your agency with the local community?
  • What is the company culture like? Does it fit your personality? There is a big difference between large and small agencies. Check out their Facebook page.
  • How are incoming leads handled and distributed within the company?
  • What’s the office environment like? Take a tour.
Who wouldn’t like an office on the beach?!

What really matters in choosing an agency?

It is easy to get drowned in the above information, but what really matters? I asked this question on social media and received some interesting and valuable responses.

CEO of RE/MAX of Southern Africa, Adrian Goslett, sums it up as follows:

… Any brand, company, organization, franchise or independent is only as good as the person driving it …

Look at who is running that agency. You can achieve different results in different agencies (even within the same franchise network) depending on the leadership. The RE/MAX CEO further suggests that agents should ask the principals the hard questions like:

…How can you help me achieve my commission target for this year?…

In the end, your success will be closely linked to the synergy you have with the agency leadership and how effective they drive their brand, whether it be independent or franchise.

Real Estate Coach, Anthony van der Riet from The Coaching Factory, echoes this sentiment saying that “…people join people, and if it is a good company, even better…”.

Successful agents have a principal who supports them. You are not going to become a successful agent based on a brand name. To summarize:

You are your own brand.

I hope the above will give you some framework when making such an important career decision. From my discussions with agents, it is clear that it is a very personal choice based on your own goals and needs, and that you can be successful in both a franchise or independent agency model. Thanks to all agents who provided input on this and helped me better understand the industry. Please leave comments if you’d like to add anything … or do not agree with anything!