Franchise Systems Are Shrinking
Despite the Housing Industry’s Growth, Some Venerable Franchise Systems are Withering
(Boonton, NJ, September 2, 2016) — Franchise systems such as HomeServices of America, Better Homes and Gardens, and Keller Williams have expanded aggressively in recent years. RE/MAX and Coldwell Banker have held their market share, and firms such as ERA have moved to reinvigorate themselves.
Alas, the real estate market seems not to have room for every national system. Forbes magazine singled out three real estate franchise systems as bad bets based on their declining fortunes in recent years:
• Help-U-Sell Real Estate. The discounter has been around since 1976, but it’s fading fast. According to Entrepreneur.com, Help-U-Sell has shrunk from more than 800 locations to fewer than 100 franchises over the past decade.
• Realty World. Another old-school company that has been shrinking, Realty World was founded in 1973. While it maintains a strong presence in such areas as Florida, North Carolina, and Southern California, it has been shrinking. Forbes puts Realty World’s five-year growth rate at -18 percent. The company’s website lists 115 offices, down from 700 in 2005.
• Exit Realty. Forbes reports a five-year growth rate of -8 percent. Exit Realty has 463 units, down from 630 in 2005.
Forbes also noted that Century 21 and Windermere Real Estate have seen single-digit declines in growth over the past five years.
More on the status of franchise systems appears in the August issue of Real Estate Broker’s Insider along with Jack O’Connor’s approach to tight inventories, and Mel Wilson’s techniques for recruiting and training young agents.
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