August 9, 2020

The advantages of the REMAX real estate franchise model compared to opening an agency on your own


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The sector of the real estate brokerage it remains an option for investors, given its high profitability. Its services and products respond to a good of first need, the living placeHence, it is always a business based on a high level of demand; and given its complexity, with an important requirement for professionals from the public.

Now, as in any business, real estate brokerage has risks, requires compliance with a series of legal conditions and requires the control of certain variables, since it is an extremely competitive sector. In this sense, the model of REMAX real estate franchise It offers some advantages over opening a real estate agency on your own. In this text we are going to explain them to you.

Some basic features of the real estate franchise model

Become REMAX franchisee It allows you what some industry experts call working on your business. And, being a REMAX franchisee allows you to become a professional service provider for professional agents.

The important thing then is to have trained and motivated real estate agents. For that you have to lead, recruit well, offering value to the candidates to attract the best and to commit to the project; develop them so that they continue to grow; and retain good professionals by offering them the best possible conditions.

In this franchise model, the cost is shared. All agents contribute, so business risk is reduced and protects itself from cycles. On the other hand, in the traditional model it is the investor who bears all the expenses and the cost of the agents. Each new agent that joins the team represents an increase in business spending and risk, which considerably limits the growth rate and makes it dependent on the market: it is a procyclical model with few mechanisms when the cycle turns around. The franchise model solves this problem.

The professional recruitment and retention system is a permanent process. In addition, the model allows to increase the number of agents without increasing expenses directly proportionally, thanks to the fact that the cost is shared. This allows some brokers to have offices with large teams of professional agents.

For its agents to develop, this model proposes already standardized agent recruitment and retention systems. The first of these, the recruiting one, is designed for the incorporation of new agents into the office and the initial development of its business: the associate agent shares the fees for the operations he carries out with the office (40% for the associate agent and 60% for the office). In exchange, the associate agent assumes the least possible business risk, only his personal expenses, but not the fixed office expenses.

Then, and once this system has been overcome, the model proposes to its most productive agents to move to the maximum system or pure system, retaining the higher percentage than in other models and giving the agent the opportunity to create his own team within the office. Therefore, this system is designed to retain the best.

In short, it is a model that, unlike the traditional real estate agency system, inverts the pyramid to incorporate many agents, diversifying risk and creating the conditions to retain the most productive agents and maximize their commission. So it is a system with high growth capacity.

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