Franchise vs Independent

After several years working under a major Australian franchise, Christine Holowiecki and her husband decided to branch out and create their own, independent real estate group, Keeping It Realty.

Meanwhile, Nick Ploubidis “fell into real estate by accident” 14 years ago and is now a principal and auctioneer at LJ Hooker Kensington and LJ Hooker Unley.

Ms Holowiecki and Mr Ploubidis represent two opposite ends of the spectrum.

REB  caught up with them to discuss the ins and outs of operating their businesses and learned that both models present their own benefits and challenges.

More autonomy

Branching out and forging your path as an independent real estate agency can provide the opportunity for more autonomy, flexibility and choice.

Ms Holowiecki says one major advantage of establishing an independent agency is the control it offers.

“Launching Keeping It Realty has [provided] many advantages like having complete control over our marketing collateral and promotional style, which in our case we prefer given that I’ve got a marketing degree and I’ve wanted to put it to good use,” she says.

“We’ve also now got a much better work-life balance due to not having to pay franchise fees and splits which to us is really, really important given that we’ve got two young daughters.”

Starting from scratch

Mr Ploubidis pointed out that it can be a challenge for independent real estate agencies to launch their own brand.

“You’re starting from absolute scratch,” he says. “You’ve got a massive financial outlay to do it properly. You have to create the branding, create the websites and create your whole presence all over again.

“To maintain that, and to keep it fresh and innovative, the expense is quite large and usually beyond what it’s worth or what you [thought you] might be saving from not being part of a franchise.”

Ms Holowiecki agrees that creating a strong brand can be difficult for independent agencies.

“As an independent I think that our brand is not yet well-known and associated with real estate. So people are still learning about who were are and what we do.”

What’s in a name?

For many agents, the appeal of a solid franchise brand that is easily recognisable is too good to pass up.

“I think that brand loyalty is a big thing amongst customers,” Mr Ploubidis says.

“There’s a trust amongst the brands. There is a lot of history and service to the community over a long period of time with the brands, whereas the independent offices don’t necessarily have that particular attribute to offer.”

Ms Holowiecki agrees that customers often feel more comfortable going to a well-known franchise group.

Potential challenges

A deep-rooted brand, coupled with the level of support and assistance received by head office is undoubtedly a good offer.

However, just because an agent operates under a franchise does not mean they don’t have their fair share of challenges too.

For Mr Ploubidis, one of these challenges is taking a comfortable, traditional brand and modernising it so it remains up-to-date and relevant from a customer’s perspective.

“As the industry shifts, and the expectations of the customer shift, it’s important that a 35-year-old agency is able to adapt and move with the times,” he says.

“That has been a challenge because its success has been strong for so long, yet if we keep going the same direction, the success could potentially deteriorate.

“As a result, we’ve all come on board to turn the big boat and come up with a very customer-orientated office which is proving to be successful.”

Some of the changes Mr Ploubidis has implemented include an increased focus on social media and digital marketing, and ensuring communication between agents and customers is more responsive.

Meanwhile, Ms Holowiecki says one of the challenges she had while working under a franchise was the inability to put her “out of the box marketing ideas” into practice.

“My focus was very much on out of the box marketing ideas, and that’s obviously always difficult to roll out due to corporate style guide restrictions,” she explains.

“At the time, I felt that the marketing collateral that was available to agents, under that particular banner, was very limited. It was more about advertising the brand despite us actually having to pay for it, as opposed to personalised marketing of that particular agent.

“[As a result] it was really difficult to stand out when it came to self-promotion.”

The verdict

Whether you’re heading up a franchise or an independent office, the one thing our two agents are unanimous about is that the success rate of any office depends on the individuals behind the shop front.

“Sometimes we’re seeing the independents get acquired within two to three years, other times we’re seeing some independents become incredibly successful and become a real competitor to the franchise models, so they’re there to stay,” Mr Ploubidis says.

At the end of the day, Ms Holowiecki says, “it comes down to the individuals who are running the business”.