To join a franchise or go solo?
The million dollar question that will impact the course of your career.
In the early days of my career in real estate I was in a very fortunate position to be offered work within a small, family owned local real estate agency, just a few minutes walk from my home on the Redcliffe Peninsula; a bayside city just north of Brisbane.
It didn’t take me long to work out that administration staff were paid a fixed salary whereas the salespeople were remunerated in what they called “commission”.
My first taste of commission would be 7 years later but in the lead up to this, I was curious.
I sought to understand how it all worked and I quickly realised that if you made more sales as a salesperson, you received more commission, aka income - those paper notes you buy fancy stuff with.
My first real estate job at 17, working at United Estate Agents in Redcliffe, Queensland Australia in 1997.
The career-driven teen with a goal to become a self-made millionaire.
As an ambitious 17 year old, you can imagine how my eyes lit up with this realisation that I could earn more than just my set weekly wage.
Following my traineeship with this agency, I was offered an administration and property management role with another local, family run real estate agency. I was responsible for completing general administration tasks such as typing contracts for the sales team, receipting rent monies, answering the phone, and preparing marketing collateral.
Now that I had been working in real estate for a few years, my exposure to this concept of earning commission had become well ingrained. What fascinated me the most was understanding how the commission was allocated to the salespeople - the split.
Back in those days (circa 1998-2000 era) the commission split to salespeople was 20% list and 20% sell, with 60% going to the office.
Nowadays, salespeople have the opportunity to negotiate this split.
“How can I get my hands on 100% - the whole lot”, was always my focus. After all, I was ambitious. I wanted it all.
This thought bubble simmered away in my mind throughout those early years before I took the leap of faith to open my own office, and prior to going out on my own, I had experience working with three (3) real estate agencies who would unknowingly help guide my thought process. Two were independents and one was a franchise office, operating under a well-known real estate brand.
The independent offices took their 100% and then allocated the split to their salespeople accordingly, but the franchise office was obligated to pay a small percentage (I believe it may have been around 10%) to the franchisor.
The Joy of 100%.
It was a no brainer in my mind.
The naive me couldn’t understand why any business owner would want to willingly part with any of the commission they earned from a sale, but when you factor in the value derived from being a part of a franchise group, I could see the reasoning.
And so, before I opened my own office, I started to weigh up the value versus benefits versus costs of aligning with a franchise. What stood out to me was that all of my previous bosses had said at some point, “people don’t list with the agency, they list with the person”. In other words, clients choose to sell their homes with a particular salesperson, rather than base their decision on the agency whom the salesperson is working for.
For me, the decision was clear.
Independent all the way.
And 20 years and three independent businesses later, I have no regrets.
Sure, one can argue the benefits of aligning with a franchise model but I guess it all depends on what is important to you.
Here is why I chose to be independent:
1 / I wanted to be the sole decision maker in how I marketed my brand without having to run things past a corporate head office.
2 / I wanted to retain 100% of the commissions earned by my office, and as a working Principal, I was able to do so.
3 / I had a marketing background following a small stint at uni and felt I had the knowledge and experience to create my own brand collateral and successfully market the business without any help from a higher authority / franchisor.
4 / I knew that by creating my own brand, I could, over time, build significant value into my name, underpinned by my chosen business ethos and values rather than someone else’s. Heck, if Ray White did it, why couldn’t Wendy Russell?
Franchise or independent?
Which way will you go?
If you are at the fork in the road on whether you should develop Brand You as an independent, or align with an established agency or franchise group, there is much to consider, and I believe this decision really is a personal one.
Another factor that heavily influenced my decision was staying true to my personality type.
I’m not really a team player and I prefer to do things solo. I don’t need a group of people around me to feel supported and encouraged. I am a self starter.
If you are someone who deeply values the community, branding, training and admin benefits of what a franchise group can offer, then perhaps this is your road?
My advice is to work out who you are as a person; define your business goals and go from there.
Understanding what you need to thrive in a business environment will play an important part in this decision.
In my Masterclass I deep dive into this space in the very first Modules. I guide participants through a process that allows you to take an honest look at where your values truly lie with regards to your business values, personal brand and how you want to be perceived and positioned in the marketplace. This will help you determine early on whether this whole independent / solopreneur-thing is really for you.
There is no right or wrong, but I know for me, there is huge satisfaction and joy in knowing I have built something all on my own, and all for me. 100%.
ABOUT THE AUTHOR
Wendy Russell writes about Property, Career and Success. She is a self-made woman and Independent Buyer’s Advocate based in Brisbane Australia, representing busy professionals in luxury home purchases.
Courses for real estate agents and buyer’s agents :
The WENDYRUSSELL Buyer’s Agent Blueprint - steal my systems, processes and skillset to become an independent buyer’s agent.
Masterclass for Women in Real Estate - The Polished Professional - level-up to become a high-value agent who earns more and attracts A-class clientele.
