Let there be no doubt that the franchising business model can exponentially spread brand visibility. For years now, U.S. real estate franchisors have ventured internationally to build their national brand into one of global awareness. Companies such as ERA, RE/MAX and Century 21 have achieved great success in the international arena, usually reaching a top five position within the first 3-5 years in every country they have entered.
According to the leading report on real estate trends, the Swanepoel TRENDS Report, don’t expect this tendency toward worldwide brand growth supported by the franchising model to change any time soon. In a the NAR Report entitled Profile of Real Estate Firms, brokerages reported that franchise affiliation significantly improved their firm’s name recognition in their market area, with a resulting increase in more business and improved profitability.
Since the mid 90’s, a revitalized interest in franchising in real estate has resurfaced in the form of consolidation and new business models that leverage the franchising structure. By 2005 franchised real estate companies had overtaken the market share of locally-owned, independent real estate firms in most markets across the country. Why? Franchising provides a method to cut costs, find new customers, and project a recognizable brand. According to the Swanepoel TRENDS Report, the industry should expect more franchising options providing traditional services and benefits, simply repackaged in new and unusual ways and marketed as new and exciting alternatives – all flying under the banner of that ubiquitous brand name.
Franchisors like Cendant and GMAC have created wholly-owned subsidiaries to acquire franchisees. NRT, Inc., the Cendant-owned brokerage-holding company, has subsequently become the single largest real estate company in the world with almost 500,000 transactions and $230 billion in sales volume. Keller Williams Realty touts itself as, “the fastest growing real estate franchise in Northern America”. Founded in 1983, the company since beginning to franchise in 1990, and has since grown to about 500 offices and about 56,000 associates.
The franchising trend has some of the world’s most infamous brands singing its praises. For five years running, BusinessWeek has published its ranking of “The 100 Top Global Brands” by dollar value. Their 2005 results noted companies that focused on every detail of their brands with intense precision. The goal was to create and display simple, easily recognizable, and consistent identities throughout every product line in every market among all customers. eBay, HSBC, Samsung, Starbucks and Apple rank among this year’s top gainers, while high flyers Coca-Cola, Microsoft, IBM, GE and Intel grabbed the top five slots as the world’s most valuable brands.
How does BusinessWeek account of such a trend? “It's a different world now. The monolithic TV networks have splintered into scores of cable channels, and mass-market publications have given way to special-interest magazines aimed at smaller groups. Given that fragmentation, it's not surprising that a new generation of brands have amassed huge global value with little traditional advertising. The brands that rose to the top of our ranking… …wove messages over multiple media channels and blurred the lines between ads and entertainment. As a result, these brands can be found in a host of new venues: the Web, live events, cell phones, and handheld computers.”
For more information on the impact that brands is making on global brand identity, as well as all the other hot trends pushing, pulling and changing the real estate industry, read the latest 114-page Swanepoel TRENDS Report. It provides a balanced and objective evaluation of what and who is transforming the real estate industry today. Published by RIS Media, it’s available exclusively at www.realestatebooks.org |
