Residential real estate brokerage franchise co-owner Doug Wolfe, Virginia Beach
Owning a real estate franchise can be extremely lucrative — for the right person. It’s not enough to have real estate experience or cash on hand. It takes a certain kind of personality to successfully open and grow a franchised real estate brokerage.
We talked to Virginia Beach managing broker Doug Wolfe about opening a franchise and who should look into owning one. Wolfe has been in the real estate industry for 20 years and has earned many designations. As a Hampton Roads expert, Wolfe teaches for the local Realtor association and Alpha College of Real Estate.
Wolfe already owned a successful brokerage and had a team in place when he decided to step into franchised brokerage ownership with Redefy Real Estate. After four months of hard work and gaining traction in the Hampton Roads area, he shares his experience and advice in the Q-and-A below.
Why would an experienced, successful broker open a franchise?
If they want to take their business to the next level that they couldn’t do on their own (because of marketing and advertising costs, limited training and lack of name recognition). They’re going to have to get some help with that.
Their options are to merge with another small firm, or become a franchisee so they can say, “Check it out, look who we are!” An individual name can only go so far.
What is the benefit of opening a franchised brokerage versus your own brokerage?
It’s expensive up front to open a franchised brokerage, but if you’re going to do it yourself there’s a good chance it will cost even more overall.
The name recognition of a bigger company versus an individual name goes further, a proven process is already set up and running, and the money has already been spent on marketing and advertising the brand. Plus when you have a question, you can pick up the phone and call someone for help.
Does having real estate experience matter?
If you’re going to open a real estate company, you’re going to need some real estate experience — unless you hire experts that you trust and leverage their expertise. If you want to just be the owner, you have to have all the right people in the right positions.
If you’re willing to delegate responsibilities to your team and give them control (because that’s why you hired them in the first place), then you don’t need any real estate experience. You just need business experience.
Should you join a new or established company?
Join a company that’s growing. Not a company that’s stagnant or trying to save themselves. One that’s expanding its franchisee base.
What are the traits of a successful franchise owner?
Most importantly, you’re going to have to be a good leader. My agents aren’t looking at my regional director for help, they’re looking at me. So I’m going to need to show those leadership qualities.
But I also have to have my ego in check when they’re looking at me for answers that I don’t have. When that’s the case, I have to be willing to pick up the phone and show them I’m calling my corporate office for help. You’re going to have to do it all as a franchisee.
What causes an independent brokerage to fail? What’s the solution?
They won’t put their ego in check. Look at “Restaurant Impossible” or “Bar Rescue.” Why are their restaurants failing? It’s because their ego won’t allow them to say, “You know, I’m doing it wrong. I need to make a change.”
The easiest way to make a change is to grab somebody else’s playbook and say, “I’m going to use your playbook.” Which is what you do when you open a franchised brokerage. But you have to do it their way. If you don’t do it their way, you’ve got big problems.
You left a successful, traditional brokerage to own a flat-fee, full-service model. Why?
We did some research in the MLS and started to see a pretty strong trend for limited service representatives. We knew we didn’t want to be limited service so we Googled and did some research on companies that would offer more than just limited service and found flat-fee, full-service.
We just decided that it was worthwhile to give up that front-end listing money to get the head start on where the industry is going to be shortly, and I mean shortly is probably less than five years. Maybe less than three years.
With that in mind, we now have that head start.
What are some wrong reasons for opening a franchised brokerage?
If you’re thinking about joining a franchisor because you’re not making it own your own. If you’re thinking you’re going to become a franchisee, and you’re just going to use the name but not use their tools or go by the playbook, you’re going to fail.
If you’re not excited about it, and it’s going to be the same old same old but with a different name, don’t do it. You’re not going to be happy or successful.
What piece of advice would you give a potential franchisee?
If you’re not willing to do what the franchisor says to do, then don’t be a franchisee. If I still wanted it to be Doug Wolfe’s Real Estate Company “I’m going to do it my way” then it wouldn’t make a lot of sense for me to become a franchisee.
I’d be ignoring the reason I’m giving the money to the franchisor, which is for the guidance, the leadership, the ideas and the ability to bounce things off of a company that’s growing and successful.
Chris Rediger is the co-founder and president of Redefy Real Estate. Learn more about Chris and Redefy on Twitter or Facebook.
