Affiliating with a franchise could be a boon to your brokerage’s growth, but it greatly restricts your brand, a panel of leaders in the indie and franchise real estate space argued at Inman Connect’s invite-only CEO Connect event on Tuesday.
Benefits of going indie
Douglas Elliman CEO Dottie Herman and Red Oak Realty CEO Vanessa Bergmark represented the indie perspective on the panel and argued that there’s significant value in being an independent brokerage.
Herman has seen both sides of the coin, working with Merrill Lynch and Prudential, before purchasing Douglas Elliman.
“I think the biggest determinant to a franchise … once you’re a franchise, you’re investing in their brand, not yours,” Herman said. “If you ever decide you don’t want to be that brand any more, all the money you invested, you have to start all over again.”
“You never know what a brand is going to do,” Herman added. “I was with Merrill Lynch, and they got out of the real estate business.”
Bergmark explained that the industry is a “pirate industry,” and a group of people that are rogue. Sometimes, she explained, you just want to mix it up and not be beholden to a franchise. She went through a pricey rebrand herself, last year.
She also humorously addressed the assumption that every brokerage should be hyper-focused on growth.
“There’s an assumption that everyone wants growth, to be bigger that’s better,” Bergmark said. “Maybe for some of the guys in the room that’s true. But that’s not always the case.”
Why is franchise better?
Bergmark’s remarks about growth came in direct response to Charlie Young, CEO and president of Coldwell Banker touting growth as the biggest benefit to joining a franchise. Young said being part of a franchise allows a brokerage to focus only on growth and not have to worry about things like branding.
“In real estate, as in life, if you’re not growing, your longterm viability is not great,” Young said.
He then quipped to Bergmark, “How much more great could you be with our resources behind you?”
“You would hate me if I worked for you,” Bergmark responded, before adding that Young would have fired her.
Sam DeBord, the vice president of strategic growth at Coldwell Banker Danforth echoed Young’s sentiments. He’s seen first hand how much the Coldwell Banker brand has helped his company recruit.
“When we walk into a new market, we’re recruiting agents, they know the brand,” DeBord said. “I want our team focused on recruiting and developing talent.”
DeBord said in Seattle they’ll get calls from buyers in New York because they worked with Coldwell Banker on the East Coast, so having a nationally recognized brand also benefits them that way.
What’s the verdict?
Even with vigorous debate, the two different perspectives agreed that franchise versus indie often depends on the individual agent.
“It depends on the franchise, and it depends on you,” Herman said. “If you’re not good, it doesn’t matter what name you are.”
Bergmark also noted that, despite their differences, it’s the collaboration across different brokerages that makes the industry great.
“I think what is more valuable in any of it is the collaboration between the two,” Bergmark said. “If we really cared about the consumers, we wouldn’t even be arguing about this.”