Real Estate Franchise Information

Real estate franchises give you brand name recognition.

Starting a real estate company under a franchise may be a good idea for the brand name recognition. But there are several costs associated with franchising that you must consider.

Fees

The upfront franchise fee of real estate franchises costs from $10,000 to $25,000 in 2010 according to John Vanhara, President of Millionsaver Franchise. Keller Williams charges $25,000 and is one of the most expensive names to associate with in up-front costs. There are usually ongoing royalty fees to consider as well. This can be a percentage of gross revenues, typically 5 to 6 percent, or a simple monthly fee of a few hundred dollars per month.

Advantages

You will have a brand name company that gives clients a feeling of trust and comfort in working with you. A brand name can make it much easier to get clients when you are starting a new company. Real estate is a very independent industry by the nature of the work. You will still be able to drive most of the company's daily decisions even though you are part of a franchise.

Disadvantages

There are other fees in addition to royalty fees when you are part of a franchise. They may require you to spend a certain amount on advertising each month. Some franchises even have hiring quotas, and if you fail to hire enough real estate agents you will still have to pay out enough money to cover the minimum quota.

References

• Eastbiz: Real Estate Franchise Fees