Countries like Israel and Korea might not seem like fertile ground for the real estate industry. But for ERA Franchise Systems, they're hot property. ERA, which opened its first international office in Japan in 1981, was one of the first franchises to go international, and although expansion has been fairly steady since then, the company has experienced explosive growth since the mid-1990s. ERA Singapore, for example, reached record sales in 1996. And prior to ERA Korea's recent grand opening, 40 new ERA member broker offices joined the start-up operation.

Javier Parraga, vice president of International Development and Services for HFS Global Services -- which actually comprises both ERA and Century 21 -- says that as developing countries' economies strengthen and expand, so do local real estate markets. While the worldwide real estate market shrinks in proportion with the global market, on a country-by-country basis people are buying and selling homes like never before.

Parraga, a CPA by trade (he once worked at Coopers & Lybrand), is a former investment broker who worked for both Smith-Barney and Payne-Webber. He now spends much of his time living out of a suitcase and conducting business in a multitude of countries. Aside from jet lag, the primary side effect of his job is learning, often with some trial and error, the business etiquette of every country in which he establishes franchise operations. Considering the scope of ERA Franchise Systems -- the company now has more than 2,500 offices around the world, and that number continues to grow -- Parraga is going to stay busy, jet lagged, and perhaps a bit culture-shocked for the immediate future.

A.N.: To what do you attribute the tremendous international growth experienced by ERA Franchise Systems since the mid-1990s?
J.P.: The main reason is that global markets are getting a lot smaller. We recently saw a good case study with Japan. When the Asian markets started tumbling, everything started tumbling. The Far East is probably 20 to 25 years behind us in terms of the real estate market, and Europe is about 10 years behind us. But, as the economies improve in these countries, the buying and selling of homes becomes a more important part of each economy. Then people want to equip their houses -- with furniture and with all of their "toys." In some countries, this can account for 20 percent to 25 percent of the GNP.

A.N.: Have other real estate companies hopped on the international bandwagon to the extent that ERA and Century 21 have?
J.P.: Most of them have opened international offices -- Coldwell Banker, RE/MAX, Realty Executives, although Realty Executives had mixed results and to pull out of some of their operations.

A.N.: What's involved in opening up an international office?
J.P.: After an agreement is signed, it takes between six and eight months to become operational. Most of that has to do with the translation; we can't do a verbatim translation of our principles, so it takes time to adapt those principles to the foreign country.

A.N.: Have you approached existing companies and bought them out, or are these offices built from the ground up?
J.P.: These are start-ups. We sell them the master license, and that gives them the exclusive rights to the ERA name. But when we sell them that license, they assume the responsibility of hiring employees native to that country. They're not transplanted Americans.

A.N.: You opened up your second office in Israel, in Jerusalem, within the last year. Where else do you have international offices, and what is your most recent office to open? What are your expansion plans for 1998?
J.P.: To name a few: Belgium, Spain, Korea, Indonesia, France, Hong Kong, Taiwan, South Africa, the Philippines, Guam, Thailand, and the Cayman Islands .... that's the latest office we opened. We signed the agreement in early September. Although the offices aren't up and running yet, we've sold master franchise rights in Brunei, England, Luxembourg, and Malaysia. In 1998, we hope to increase our offices in Europe by more than 200.

A.N.: What's your background in real estate?
J.P.: I started in real estate in 1990 at Century 21 for the Mid-Atlantic states. I moved into franchise sales, and I eventually ran that department as regional vice president. In July 1996 I came to HFS Global Services in my current capacity, in charge of international service.

A.N.: What do you find most interesting about your job?
J.P.: This company is an incredibly interesting place. You're dealing with different cultures and customs and learning how that affects business ... how you conduct business in various countries.

A.N.: How much travel is involved in your job, and do you enjoy it?
J.P.: A lot! I travel at last half of the days of the year. I don't enjoy the actual traveling part -- sitting in a plane for 14 hours and experiencing jet lag -- but once I'm there and I've had a good day's rest, I enjoy it.

A.N.: Are the employees within your division required to take any courses that help prepare them for these cultural differences they're going to encounter?
J.P.: We're considering it. We've looked into courses, but in the meantime, at each one of our international offices, they're hiring natives of each country.

A.N.: What trends are you seeing in international real estate right now?
J.P.: These countries are very hungry for knowledge. They want to know how to conduct business with real estate. Governments want to know how to regulate these new businesses.

A.N.: What's the biggest challenge you face establishing franchises in other countries?
J.P.: The biggest challenge is adapting the process we have to a foreign country. Every franchise we set up in based on the U.S. model. We have to adapt the U.S. system to another culture, another language, and then implement the system.

Published: December 10, 1997

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