When we talk of real estate franchising, we typically think of large organizations that offer turn-key branding and systems for broker owners. Now however, thanks to the Internet, individual agents can either offer their own branded "franchise" to other agents, or take advantage of those being offered. Here's how online-based "franchising" and licensing offers whole new possibilities for additional income and a lucrative exit strategy for clever agents who take advantage of it.

Franchising is a process of offering a "turn-key" brand to independent business people for a fee. One of the main advantages of buying into a franchise is that it is much easier to differentiate your business with an established unique brand that is offered by the franchisor. And of course, the franchisor benefits from the multiple streams of income generated by their multiple franchise fees. 

However, creating a legitimate franchise is very expensive, time-consuming and highly regulated. While these barriers to entry might preclude individual agents from starting their own formal branded franchise, there are other ways to take a unique branding idea and turning it into cash ...

Licensed Branding: All The Benefits, None of the Hassles
One of the trends I recently wrote about is how agents are starting to specialize in one or more very targeted niche markets. Some of these agents have done such a great job of doing this that they ended up creating a viable "brand." And, when this brand is manifested as a highly unique and memorable Web presence, it may be licensable to agents in other geographical areas that want to specialize in the same niche but don't want to spend the time or effort of creating their own unique brand.

Having an intellectual property rights attorney create a solid license agreement is much easier, quicker and far less expensive than creating and launching a franchise. Yet, just like a franchise, you will receive a fee from each person to whom you license your brand.

One of the best examples of this is Joe Tyne from the Fort Hood area near Dallas Texas. Joe's niche market is the military buyer and seller, as so powerfully evidenced by his Captain Joe Action site.  In creating this Web presence, Joe realized that he not only had a viable and unique brand, but one that could be licensed to Realtors serving other military markets. For example, one of Joe's first licensee's is Harry D'Elia in Glendale Arizona. Here, Captain Joe Action serves Luke Air Force Base via this website. 

By licensing Joe Thyne's Captain Joe Action brand, Harry was able to get up to speed almost immediately in carving out his niche for the military market in his area. Meanwhile, Joe is able to collect a license fee from every market that his Captain Joe Action serves -- not a bad "win-win" situation for all involved.

No Snow = Big $$
In some cases, non-Realtor third parties are setting up online targeted brands that can be licensed by either individual agents or brokers who want to quickly capture a target market without doing the necessary creative branding work. Stephen Lau of No Snow Real Estate Services, LLC in Ottawa Canada helps agents and brokers nationwide to powerfully tap into the growing "snow-bird" baby-boomer market. He and his partners have set up a very distinctive (and internationally trademarked) "No Snow" brand and respective websites in nearly every major snow-bird market in the U.S. 

For example, their first branded site is No Snow Naples. They expect to have other major markets up and running for nearly every major Florida city, and then eventually the rest of the south and southwest U.S. (i.e. No Snow Miami, No Snow Tampa, No Snow Key West, etc.). Each of these sites will contain content unique for the area they cover and a powerful backend database system that keeps track of the business generated. The license fee in this particular case is a referral fee that is paid for each transaction that comes through the site. By the way, because this brand is consistent throughout the snow-bird areas of the country, it automatically creates a wonderful referral network between No Snow licensees serving different areas.

If You Qualify You Can Play
Another unique twist on the branded licensing idea comes from Jay Izzo of the Linda Craft Team in Raleigh, NC. He created a special My Executive Mansion site that caters to agents from around the world that work exclusively with executive mansion residences. In stead of licensing this brand to agents in different geographical areas, it provides a branded portal where they can post their executive mansion listings for free. 

The content of this site is clearly designed for the highly intelligent and discriminating executive mansion buyer. The only time an agent has to pay a fee is if and when their property sells via this site.  This means that an agent can post their properties on this site and use this fact as a powerful differentiating tool during their listing presentations. However, not just anyone can post their executive mansion listings on this site. Jay and his team require that any participating agents demonstrate that they are truly full-time professionals specializing in this market. Candidates must complete a comprehensive questionnaire before they are even considered.

Targeted Branding is the Key
It is important to note, that in each of the cases above the licensor created a highly targeted brand that could be effectively utilized by other individual agents within their market area. And, in the first two examples, the licensing of the brand may give the licensee the right to sell their license (and years of good will developed by it) for a hefty fee when they are ready to retire. This effectively creates a lucrative exit strategy whose value increase with every new transaction completed under the licensed brand.

No longer is leveraging a branding idea the sole purview of large organizations with tons of cash and armies of attorneys. Clever sole real estate practitioners can create another cash-flow stream for themselves beyond just doing sales. And, in the process other agents can take full advantage of these innovators' creativity to almost instantly create a targeted presence within their market.

This is just the start. Because in PART II of this series we will look at how one major real estate franchisor is looking to help individual agents legally franchise their online brand. You will see how this group intends to handle all the legal, regulatory and marketing efforts that would otherwise preclude individual agents from even considering going into franchising.

NOTE: Mr. Internet®, RUSSER Communications, its staff and officers receive no compensation whatsoever from any third party vendors and make no recommendations as to the suitability of the products or services mentioned in this article. Always thoroughly investigate any product or service before trying or purchasing.

Published: May 19, 2006

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Michael J. Russer (a.k.a. Mr. Internet®) is an internationally acclaimed speaker, trainer, author, and strategic consultant to the real estate industry and small business. He is also the exclusive Internet columnist for REALTOR® Magazine, the architect of the revolutionary e-ProductivityTM system and leading voice for the use of Virtual Assistants in small business. You can subscribe to his free monthly leading-edge newsletter ePOWER NEWS by going to ePowerNews.com.