California real estate licensees looking for employment — whether as a salesperson or as a broker-associate — have a lot of options when choosing a brokerage.
According to a recent first tuesday poll, 66% of licensees see name recognition as a persuasive factor in choosing a place of employment. This response is up from 52% a year earlier.
Reputation has always been a fundamental component of the real estate industry, and when it comes to brokerage franchises, almost nothing is more important — both for attracting business and attracting agents to work for the brokerage.
What’s in a franchise name?
A real estate franchise is an arrangement where a franchisor grants a franchisee, in this case the broker-owner, the right to market real estate services according to certain specifications using the franchisor’s name, trademark and business systems — a pre-packaged model for a business.
The franchise is typically a company with a recognizable name and record known to the public. When a broker-owner buys into a franchise network, they immediately benefit from the name recognition of a long-standing and established company — but the benefits are often even more extensive, including:
- local, state or national marketing and advertising;
- a business strategy for targeted markets; and
- a standard operating template.
The franchise may also offer a business model the broker-owner feels benefits them and their agents, without the initial broad-based name recognition.
Branding is everything
For both the broker-owner and their agents, brand-name recognition is the biggest incentive for doing business under a franchise.
However, name recognition isn’t always a positive! As a franchisee, the brokerage company also becomes affiliated with other franchisees. This sometimes causes name recognition to backfire — as the company’s name is now associated with another broker-owner operation which might not have a positive local reputation.
Further, consumers are more likely to remember the well-advertised name of the franchise than the name of the individual brokerage firm operating as a franchisee.
Thus, the broker-owner needs to place emphasis on promoting their individual firm name as linked to the franchise rather than promote the franchise name by itself. This may be challenging in markets where multiple brokerages operate under the same franchise name.
Ultimately, a franchise is only as powerful as the individual broker-owner. But when it comes to attracting agents looking for work, the name certainly won’t hurt.
Prospective employees will have all these advantages and more in mind when looking for employment. An agent employed by a big-name brokerage — regardless of the individual firm — will have an easier time attracting business when working with the benefit of an established reputation.
As with most business decisions, there are ups and downs to buying into a franchise as opposed to operating an independent brokerage — but for drawing in prospective employees, it’s typically a sure bet.
Editor’s note — For those agents and broker-associates in search of a broker, the first tuesday Broker Search tool is an invaluable resource to find one near you.
