Real estate brokerage leaders are faced with daily business choices, and with the constant and hurried pace of industry change, the need for decision-making is never-ending. But when there is an industry upheaval (like a merger of formerly competing franchisors, Compass and Anywhere), large, unanticipated decisions are thrust upon the leaders of their affiliated brokerages.
Suddenly, the driver of the bus on which they were traveling took a turn they weren’t expecting, and their destination changed without their input.
As a passenger on that bus, the leader naturally wants answers about why there was a change of direction. They want to see the map, want to know what road they are on and where they are headed, and need to spend time exploring their future to decide if they want to go there, all while the bus continues moving.
Questions to ask in the midst of change
The exploration begins with having more questions than answers:
- Is the change good or bad for their company?
- How does it affect their competition?
- How are their local associations going to navigate it?
- What plans do they need to put in place to make required changes to their brokerage?
- What is the temperature of their relationship with their brand leaders? Are they aligned with the new direction?
- How are they situated financially with the change?
- How will their agents and staff feel about it?
- How do they feel about it?
Ultimately, although there are a lot of ways to navigate a change like this, company leaders will eventually have four basic roads from which to choose:
- Stay with the franchise.
- Go with a different franchise.
- Become an independent brokerage.
- Sell out and get out.
It doesn’t necessarily require an industry-shocking merger announcement to cause brokerage leaders to need to map out their futures and what that future may look like as a different type of entity. When franchise contract renewals come up, leaders are faced with this exact, same set of choices. And while just as daunting as a surprise announcement, the timing is at least expected.
Having been at the point of considering whether or not to renew with a franchise myself rather recently, I can affirm that the decisions about which road to take are hard and that you should start your exploration earlier than you think.
It took nearly 18 months of looking at these four choices before we made a decision. While I can share what we discovered on the road along the way and how we reacted to it, no two trips through this process are going to look the same.
How to determine which road to take
If you find yourself at such a crossroads, there are 10 steps you should prepare to take along your journey:
- Be prepared to wrestle with compensation spreadsheets and test different models by applying different financial scenarios using your real production numbers.
- Work with graphic designers who can help you test different brand looks on a variety of materials.
- Take a deep dive into your tech stack, and consider if change would be welcomed or if it would be disruptive. Consider how your tech may be managed differently in the future.
- Ask your agents, staff and customers how they view your company so that you fully understand, from their lens, what your strengths and weaknesses are, so that you can play on what is working for you and change where needed.
- Consider all the things you receive from the franchise — tools, support, tech management, marketing, data, social presence, name recognition — and determine what you would do to replace those things and how much it would cost to do so.
- Your due diligence isn’t complete without an examination of other franchise models to compare their cost, features and benefits.
- If your support system changes due to a franchise change, consider how that might affect your staff structure.
- When you consider when and how you are going to present your decision, remember that you have multiple audiences, each needing information shared in different ways. You have your agents, staff, current clients, the general public and potential recruits.
- Do the math and think about what a shift in affiliation or name might do to your market position and your competitors.
- Finally, add up the cost of staying versus the cost of making the change. The cost of new signage for your buildings, paying for your own technology, replacing yard signs, business cards, email service, events, announcements, swag, etc., adds up.
With four business partners working through the options, we each shared our concerns and our hopes, and none of us were moving at the same speed for months. We brought in the assistance of outside consultants.
During our decision-making process, we watched many of our colleagues renew their agreements. There were times when we were not in agreement among ourselves on the route.
Finally, we all made the unanimous decision to get off the bus driven by someone else and get behind the wheel in our own car. It was a car that we chose, but also one that we knew we’d have to fuel and maintain on our own. We began our journey down the road less traveled. We became independent.
Our managers and staff each took the news a little bit differently. It took some time for everyone to come to terms with the change, but we never gave up talking, examining, planning, predicting, calculating and supporting each other.
Our roadmap to independence was full of potholes, hairpin turns and stoplights. Our main concern was to make as little disruption in the lives of our agents as possible. We created a playbook for them to follow and had an amazing staff ready to help. We had materials and supplies for them when the time came.
The choice we made is not the right one for every brokerage. And who knows … it may not be permanent. But today, we map our own way and choose our own road, and that has made all the difference.
Claudia Stallings is the COO of Wallace Real Estate in East Tennessee. Connect with her on Facebook or Instagram.
