Investing in a franchise can be a wise decision for aspiring entrepreneurs who don’t want to start their business from scratch. By purchasing a franchise, you’re essentially buying into a proven model that has successful marketing and branding strategies in place. The parent company has already invested time and resources in testing various approaches and refining their operations into a proven business model. As a franchisee, you stand to benefit from their hard work and expertise.
On the other hand, starting on your own means you’ll have to learn from your mistakes. And you’ll have to find your own solutions in your respective real estate market.
However, if you’re thinking of going with a real estate franchise, there are some things to consider:
- What are the associated costs?
- What are the requirements for starting a franchise?
- What is stated in the franchise agreement?
- And most importantly, which one will work best for you?
In this article, we’ll explore the criteria for selecting the best real estate franchises. And we’ll provide an overview of the top real estate franchise opportunities. We’ll examine their strengths and weaknesses, specific value propositions, fee structures, support and training programs, and growth opportunities. It’s also worth noting that some real estate companies have a minimum net worth requirement.
We’ll also highlight the importance of choosing the best real estate franchise for you. As well as the benefits it can provide to entrepreneurs looking to start or grow their own real estate business.
What are the best real estate franchises?
- Keller Williams
- RE/MAX
- Century 21
- Coldwell Banker
- 1 Percent Lists
- ERA real estate
- Sotheby’s International
- Realty One
What is a real estate franchise?
A real estate franchise is a business model where an established company grants a license to a third party to use its brand name. In addition to built-in branding, franchisees also gain access to business systems, and other resources, such as marketing support and training. In exchange, the franchisee pays an upfront franchise fee, as well as an ongoing percentage of revenue.
The other option for when starting a brokerage is to operate under their own name. This could be a name like “Infinity Realty”, “Smith’s Real Estate” or whatever the broker thinks up. In this instance, they must create their own systems, technology, marketing materials, website and most of all brand recognition.
The real estate franchise model has become increasingly popular over the years. It provides entrepreneurs with a turnkey solution for starting their own real estate business. All without having to create a brand or business model from scratch.
Reasons to become a franchisee
For a successful broker, growing to the next level by franchising under a national real estate brand may be the next step. Becoming a franchise owner, however, is a big decision.
Choosing the right real estate franchise brand to latch your business to is crucial. A reputable franchise can provide entrepreneurial real estate brokers with a solid foundation for their business. This is done through comprehensive training programs, marketing resources, and support systems.
Look bigger than you are
The average buyer or seller most likely doesn’t understand how franchising in real estate works. For instance, they may be talking to a Realtor who works for Coldwell Banker or Keller Williams. Chances are, they’re under the impression that they’re working with a huge nationwide company. However, more often than not, the “owner” of the local brokerage is right there in their town.
Branding
People buy and sell real estate with established brands or Realtors that they personally know. A well-known brand can lend credibility and recognition to a franchisee’s business. This makes it easier to attract clients and build a reputation in the market.
Leads
Some franchise models provide direct leads, albeit with large referral fees, directly to the franchise. These leads are generally acquired from the main franchise website and distributed to the local franchises. For example, a potential buyer may go to a well known brokerage site, like Century 21, searching for a property. When a client provides contact information, the parent company then funnels this lead to a franchisee in the buyer’s area.
Relocation leads
Anywhere Real Estate, formally Realogy, is a real estate services company that owns and franchises many brands and brokerages. Additionally, Anywhere Real Estate has the largest relocation network in the world. This lets them provide their local brokerages relocation business from Cartus.
Cartus provides corporate relocation programs to assist employees of businesses find new homes. So if a large firm is transferring people in or out of an area, Cartus usually has that contract. They then connect those homebuyers and sellers with the locally owned Anywhere Real Estate brokerages.
Companies under the Anywhere Real Estate umbrella include:
- Century 21
- Coldwell Banker
- Corcoran
- Sotheby’s
- Better Homes and Gardens
- ERA Real Estate
Real Estate Technology
Becoming a franchise partner also gives access to technology tools provided by the brand. There is an ongoing battle between the largest real estate franchises to provide top tier real estate technology tools. Specifically one that gives their agents a strategic advantage.
In addition to making agents more productive, providing top tier technology can be leveraged as a recruiting tool. Many provide websites, online forms, marketing templates, digital marketing options and paid technology tools.
Because of their buying power, they’re able to do this at a discount. This allows franchisees the opportunity to access tools and resources that may be too expensive for a standalone brokerage.
What makes a top real estate franchise ?
When selecting the best real estate franchise opportunities, there are several key criteria that entrepreneurs should consider:
- Brand Reputation: A reputable brand can lend credibility and recognition to a franchisee’s business. Entrepreneurs should research the reputation of potential franchises in the market, including customer reviews, industry awards, and overall brand recognition.
- Value Proposition: What unique does this real estate franchise have to offer? Are they providing any specific value over their competitors? How hard will it be to leverage the value proposition to acquire new business in the competitive real estate industry?
- Support and Training Provided: A comprehensive support and training program can be crucial for entrepreneurs who are new to the industry. Potential franchisees should evaluate the quality and availability of any training program, ongoing support, and mentorship opportunities provided by the franchise.
- Fee Structure and Return on Investment: Franchise fees can vary widely. Entrepreneurs should consider the initial investment, ongoing fees, and expected return on investment when evaluating potential franchises.
- Availability of Technology and Marketing Resources: In today’s digital age, access to technology and marketing resources is critical for staying competitive. Real estate franchisees should evaluate the technology and marketing resources provided by potential franchises. These include website platforms, customer relationship management tools, and social media marketing resources.
- Growth Opportunities: Entrepreneurs should consider the growth opportunities provided by the top real estate franchises. These include the potential for expansion into new markets, support for new business ventures, and opportunities for mentorship and leadership development. The best real estate franchisees offer opportunities for growth and can help entrepreneurs achieve long term success in the challenging world of real estate.
Lies, damned lies, and real estate statistics
When discussing real estate franchises there’s a common question that’s often asked. Who is the largest real estate franchise? This is actually much trickier to answer than you would think.
The answer comes down to how someone defines “largest”. This is why you’ll hear varying answers. So how would you define it?
Would you look at the number of individual agents that are associated with the brand? Or how about the number of offices? What about by production?
If you look at the highest producing real estate franchise brand you have to further define what real estate production is. For instance, is it the number of real estate transactions? These are sometimes called sides as there is a buying and listing side in a real estate transaction.
Perhaps it would be the total volume of real estate sales. If this is the case, do you only count the listings that were listed by the brokerage? Or do you also look at the transactions that they represented buyers?
Many real estate companies lay claim to “the largest” or “the biggest”. It really depends on the individual and how they determine it.
Truth is, there are lies, damned lies and statistics. There is no one metric to rank real estate franchises. Overall revenue, number of agents and offices, and completed transactions should all be taken into account. You need to find one that fits your idea of what you want your real estate company to look like.
The Top Real Estate Franchises
There are many real estate franchises to choose from, but some stand out above the rest. In this section, we will provide an overview of the best real estate franchises in the market today. In addition, we’ll evaluate their strengths and weaknesses based on the criteria we outlined in the previous section.
Since there are multiple ways to measure the “largest” franchise, we’ll look at all the major players. And we’ll break down their business model and offerings.
So without further ado, here is our list of the top real estate franchises. Since each real estate professional’s experience is different, we’re presenting these in no particular order. Each of these franchises has their own distinct advantages. Our goal is to provide you with information you need to choose the right one for you.
Keller Williams Realty
- Headquartered in: Austin, TX
- Founded: 1983
- Began Franchising: 1987
- Number of Franchises: 940+ worldwide
Keller Williams Realty is a globally recognized real estate franchise that operates in many areas worldwide. The company has a reputation as the leading franchise in the United States based on sales volume. Additionally, it’s the largest real estate franchise by agent count globally. The firm is a privately owned real estate brokerage with a focus on residential properties.
Keller Williams has a significant presence across the United States, with multiple offices located in different regions. One of the unique aspects of the company is its profit-sharing model. This encourages agents to recruit other agents to join the firm. The company has developed a culture of collaboration and support, which has helped it grow and achieve success.
The total initial investment to open a Keller Williams franchise is $141,000 to $441,500.
The franchise fee for Keller Williams can be up to $18,000.
The recurring royalty fee for Keller Williams is 6%.
RE/MAX
- Headquartered in: Denver, CO
- Founded: 1973
- Began Franchising: 1975
- Number of Franchises: 6,800+ worldwide
RE/MAX is a leading real estate network that has gained worldwide recognition for its success in the industry. The company’s impressive track record and global presence make it a top choice for potential franchisees. With the backing of a vast network of successful agents, RE/MAX has consistently proven that it can deliver results.
While most real estate agents operate as independent contractors, the RE/MAX franchise takes this concept to the next level. The company aims to provide real estate agents with the tools, resources, and support to succeed in their careers. As a result, RE/MAX has become a top-performing real estate brokerage, thanks to its commitment to excellence.
The franchise fee for RE/MAX can be up to $35,000.
The total initial investment to open a RE/MAX franchise is $44,000 to $236,500.
The recurring royalty fee for RE/MAX varies based on several factors.
Century 21 Real Estate
- Headquartered in: Madison, NJ
- Founded: 1971
- Began Franchising: 1972
- Number of Franchises: 14,000+ worldwide
Century 21 is a prominent franchise that operates with a commitment to delivering top-quality services to buyers and sellers. The company strives to ensure that its clients receive efficient and personalized service that meets their unique needs.
The Century 21 Real Estate System provides members with comprehensive support in the areas of training, management, administration, and marketing. The company recognizes that its success is directly tied to the success of its agents. And therefore it invests heavily in their growth and development.
Century 21 has a reputation for innovation and forward-thinking with a focus on leveraging technology. The company’s commitment to excellence and dedication to its agents and clients have made it a top-performing real estate franchise.
The franchise fee for Century 21 can be up to $25,000.
The total initial investment to open a Century 21 franchise is $24,700 to $459,250.
The recurring royalty fee for Century 21 is 6%.
Coldwell Banker
- Headquartered in: Madison, NJ
- Founded: 1906
- Began Franchising: 1982
- Number of Franchises and Presence: 3000+ worldwide
Coldwell Banker is a well-established real estate franchise that has been operating in the industry for over 110 years. The company has a proven track record of providing full-service real estate solutions to clients worldwide. This success has made Coldwell Banker a top choice for agents looking to join a successful franchise network.
Owning a Coldwell Banker franchise offers numerous benefits. These include access to valuable resources, cutting-edge technology, and a top brand recognition that can help drive business. The company has a set of requirements that must be met to ensure that all franchisees meet their high standards.
Coldwell Banker franchises offer a rewarding career for brokers looking to take their business to the next level. Its history of success makes it an excellent choice for anyone interested in a leading real estate franchise network.
The franchise fee for Coldwell Banker can be up to $25,000.
The total initial investment to open a Coldwell Banker franchise is $30,375 to $309,875.
The recurring royalty fee for Coldwell Banker is 5%.
1 Percent Lists
- Headquartered in: Covington, LA
- Founded: 2015
- Began Franchising: 2020
- Number of Franchises: 45+ in the United States
Unique to our list of top real estate franchises is 1 Percent Lists. As a discount real estate franchise, 1 Percent Lists offers a value proposition like no other. They use a lower commission model in order to attract a larger number of listings for their franchisees. So if you’re looking for a franchise opportunity that brings in the listings, this may be the one for you.
In addition, the initial investment and recurring fees with 1 Percent Lists are far lower than the majority of franchises. There are several reasons for this, but the biggest cost saver is the lack of requirement for a physical office. This saves on not only the business space itself, but also equipment, support staff, and signage. The most successful franchises are able to use these savings to further promote their brokerage and bring in even more listings.
Undoubtedly one of the fastest growing real estate franchises in the country, lower costs don’t mean less support. Franchisees of 1 Percent Lists still receive clear branding, cutting edge technology, recurring marketing, and agent training. New and established brokers gain the opportunity to advance their careers with this new way of doing business. The information from the franchise disclosure document is as follows.
The franchise fee for 1 Percent Lists can be up to $15,000.
The total initial investment to open a 1 Percent Lists franchise is $24,350 to $59,260.
The recurring royalty fee for 1 Percent Lists is 5%.
ERA Real Estate
- Headquartered in: Parsippany-Troy Hills, NJ
- Founded: 1971
- Began Franchising: 1972
- Number of Franchises: 2300+ worldwide
ERA Real Estate is a residential real estate franchisor that provides a range of services to clients, including home buying, selling, and financing. The company operates through a network of brokers, sales associates, and agents in the United States and abroad. ERA focuses on delivering personalized service that meets the unique needs of each client.
As one of the world’s leading residential franchise brokerage networks, ERA has established itself as a trusted name in the industry. The company’s commitment to excellence and dedication to its clients and agents have earned it a reputation for forward-thinking.
The franchise fee for ERA can be up to $25,000.
The total initial investment to open an ERA franchise is $27,350 to $435,050.
The recurring royalty fee for ERA is 6%.
Sotheby’s International Realty
- Headquartered in: Madison, NJ
- Founded: 1976
- Began Franchising: 2004
- Number of Franchises: 600+ worldwide
- Franchise Fee: $25,000
Established in 1744, Sotheby’s Auction House has built a reputation for marketing the world’s most valuable and fine products. Over the years, Sotheby’s name has become synonymous with exceptional client service. This has contributed to the company’s success in the industry.
Sotheby’s International Realty was founded on the same principles of exceptional service that made the auction house a global leader. Sotheby’s International Realty quickly became known for its representation of distinctive properties and gained worldwide prominence.
Franchisees enjoy the advantage of partnering with a 250-year-old association with a reputation worldwide. The company provides its affiliate partners with comprehensive support. This includes operational, marketing, recruiting, educational, and business development resources.
The franchise fee for Sotheby’s can be up to $25,000.
The total initial investment to open a Sotheby’s franchise is $40,650 to $497,300.
The recurring royalty fee for Sotheby’s is 6%.
Realty One Group
- Headquartered in: Irvine, CA
- Founded: 2005
- Began Franchising: 2012
- Number of Franchises: 125+ in the United States
Realty ONE Group is a real estate brokerage firm headquartered with a strong presence across the United States. The company’s experienced local agents are dedicated to simplifying the transaction process for their clients.
At the core of their business philosophy is their unique COOLture. It values every individual and recognizes the importance of building strong relationships. Realty ONE Group provides its agents with 24/7 support and coaching. With this franchise opportunity, brokers are empowered to make a positive impact in their communities, opening new doors along the way.
The franchise fee for Realty One can be up to $24,500.
The total initial investment to open a Realty One franchise is $43,250 to $224,500.
The recurring royalty fee for Realty One is 2%.
The bottom line
The real estate industry is highly competitive. Choosing the right franchise opportunity can be the key to success for any real estate professional. These top franchises offer a wide range of resources, support, and training to help their affiliates succeed in the marketplace.
Just be sure to carefully read the franchise disclosure document and ask any questions that you may have. Whether you are a seasoned professional or just starting out in the industry, the franchises we’ve highlighted are worth considering.
At Top USA Real Estate, we’re committed to providing current information and insights on the latest trends in the industry. We hope this article is helpful to anyone looking to explore the world of real estate franchises and open their own business. For more information and resources, please check out our other articles.
