Setting Out on the Path to Real Estate Franchise Ownership
One of the best ways to start a real estate business is by buying a franchise. A franchise offers you the opportunity to build your own business without having to start from scratch. However, buying a real estate franchise can be complex. The best strategy is to not over-complicate the process.
Do you want to know how to buy a real estate franchise? In my experience, there are six major steps that you must follow to make a successful investment into a real estate franchise.
Step #1: Set your budget
The first thing to do when you are considering owning a real estate franchise is to figure out how much you want to invest.
As a business owner, it is important to have a set budget. When you are on the lookout for potential franchises, know your budget and be honest with yourself.
How much money should you budget for a franchise?
This really depends on many things, such as the costs of premises, the cost of supplies and equipment, and how many employees you are planning on hiring. You should also figure out how much you need to earn each month and allow for this in your budget calculations.
Don’t forget to have a contingency, too: to cover for any unexpected costs and the normal slow cash flow that all entrepreneurs must address when they start a business.
A set budget will mean you don’t waste time and effort on franchise opportunities that are out of your financial reach. And this will save you a lot of stress, too.
Step #2: Determine what type of real estate transactions interest you
Real estate is a lucrative business, but it is not for everyone. It takes a lot of time and patience to build up a successful real estate career, so it is important to identify what you enjoy most and what you dislike doing the least.
There are many options for real estate franchisees. These include the type of property you specialize in (retail, commercial, or rental, new builds or previously owned, etc.) and the services you offer.
You might be more interested in providing property management services, house flipping, home liquidation services, or general real estate brokerage.
It’s important to get your choice right. When you do something that you love, your motivation will be high, and it will seem less like work. (See also our article, ‘Planning for Success in Life and Business’.)
Step #3: Know your needs based on your experience
As a franchisee, you need to know your needs based on your experience. You should be able to identify what is important to you and what you really need from the franchisor. If you have a good idea of your needs, then it will be easier to find a suitable franchisor match.
For example, you may need training for yourself and your employees, additional equipment, or promotional help.
Step #4: Research your options: What franchises are you interested in?
The real estate industry is vast and there are many options when it comes to choosing which franchise would suit you best. It’s important to know yourself and conduct extensive research.
While many reasons for franchise failure are cited in research, your success depends on one person: you. Get your research right, and you will invest in the best franchise. The one that suits you and which will give you the greatest opportunity to build your own and develop a highly successful business.
Step #5: Request information and talk to the franchises’ representatives
Ask about the process and get as much information about it as possible. Talk to representatives from franchise companies and review their websites for more detailed information. Talk to existing franchisees and ask them about their experience.
When you receive documentation from the franchisor, make sure that you read it and understand it. Finally, hire a great franchise attorney to help you decipher the legalese and make sure that the contracts and FDD are in order.
Step #6: Contrast and compare
By this step, you will likely have identified several potential real estate franchise opportunities that get your entrepreneurial juices flowing. It’s now crucial to take your emotions out of the equation, and contrast and compare all the potential investments to evaluate each franchise opportunity.
You should consider your skills and your strengths; what the franchisor is offering you; the financials; company history and growth potential; your level of involvement; and don’t forget your exit strategy.
This step will identify which of the franchise opportunities is the right one for you – the final step at the beginning of successful entrepreneurship as a franchisee.
Make owning a real estate franchise a reality
Following these six steps will help you realize your ambition of owning a real estate franchise. But before you do any of this, you should make sure that your skill set, experience, and expertise will position you as a successful franchisee. How do you do this?
Take our franchise aptitude test now. It only takes a few minutes, and it will provide you with highly valuable and actionable insight.