Real estate franchise takes off
Assist-2-Sell’s theory of why it’s successful and why its franchises have become such a hot item over the last two years: Credit it largely to the Internet-driven change in consumers, not to the boom in real estate prices, which has driven a market frenzy of selling out, buying up and investing in real estate.
All real estate firms have stood to benefit from escalating prices,with last year’s median price of a Washoe County home ending at $280,000, and continuing to rise to $317,500 by the end of the first quarter of this year.
Assist-2-Sell’s business has been racing alongside the speeding real estate market.And it’s been a good ride, says Mary Lameres- Pomin, co-founder with Lyle E.Martin of Assist-2-Sell.
But it hasn’t been about the speeding train.
It’s been about the Assist-2-Sell nontraditional business model franchise.
Selling real estate is all about information, Lameres-Pomin says.
Back when she and Martin were starting in real estate in the mid-1980s Realtors had the information.
Residential buyers did not.
Martin and Lameres-Pomin,working out of their own small Reno real estate office, couldn’t see the logic of the business model.
What’s more, they couldn’t compete with the big offices in town.
So, they carved out a niche for themselves, one that flew in the face of all of the training and logic of the traditional real estate model.
When they listed a house, they put the price in the paper, as well as the addresses.
They offered cut-rate prices for cut-rate services.
“We started as more of a do-it-yourself agency,” says Lameres-Pomin.
But clients wanted more.
The company adjusted, added service, raised prices; the two owners fell in love with their idea.
That was 1993.
The world has changed since 1993.Many, though by no means all, real estate brokers now put residential property prices in the paper.Many include addresses.
Non-traditional brokers have cropped up in most markets across the country, some offering Internet-only services, some going with a do-it-yourself model, others with varying levels of seller involvement in the work of marketing and corralling a property through escrow.
Meanwhile, Lameres-Pomin and Martin moved out of real estate and into franchising.
So far, the franchise business has outstripped their goals, says Martin.
“We always had a dream of franchising,” says Lameres-Pomin.
“We knew we had a great idea,” says Martin.”And as we grew, we had a gut feeling that we were right.”
“Even though we had lots of false starts,” says Lameres-Pomin.
“We spent hours in the library researching,” Martin tosses in.
“We bootstrapped the idea, no venture capital, just plowing money back into it,” says Lameres-Pomin.
“We set goals, exceed them, set new ones,” adds Martin.
It wasn’t always like that.
For the first ten years of the franchise’s life, it grew slowly.
In 2003,Assist-2-Sell after 10 years in the market had just 98 franchise offices.
In 2004, they could count 145.Now, the number is more than 490 open and more in the pipeline.
And next? “The fun part,” according to both owners.
The fear is gone.
The fear of the franchise not working.
The fear of not being able to grow it.
“It’s making money now,” says Lameres- Pomin.”We have resources and the cash flow to grow it.”
The two owners originally projected that they’d have 500 offices by the end of 2005.
Now they laugh.
They reached that goal this month.
So, new projections are for 600 offices this year.
Assist-2-Sell maps show red dots for offices in all but five states, and some in Canada as well.
The states not on the map yet Vermont,Montana, Delaware, Kansas, Arkansas.
As with most franchisers, for Assist-2-Sell, the business model and name are the product.
Franchisers pay a $19,500 upfront fee plus a royalty of 5 percent of gross income.
For that, they get Assist-2-Sell training.
This month, 57 new owners worked their way through the firm’s week-long training, hosted in its headquarters at 1610 Meadow Wood Lane.
They get the use of the name, the logos, the marketing materials, the system.
The system is what sells, says Lameres- Pomin.A system based on volume.
Real Estate Magazine listed the Assist-2-Sell Reno agency in its May Power Broker Report within the top 500 offices in the nation in number of transactions for the month.
Assist-2-Sell does no national consumer marketing.
Its theory: the residential customer wants information on a house, not a brand.
Following the franchise model, offices market listings locally.
The firm’s brand marketing targets the franchise customer real estate brokers chiefly through trade publications and direct mail.
The company’s 31-employee staff will most certainly grow, says Lameres-Pomin, over the next few years.
It just added a few technology folks in anticipation of networking to its franchise offices.
“We build the support team as we grow,” adds Martin, and the slim team is able to serve a broad base.”One of the benefits of the franchise operation is that the brokers buy a system and afterwards need very little care and feeding.”
And that holds, even now, he says, as the firm begins to look further into the future and see itself as just possibly one of the giants,with 3,000 or even 4,000 franchise offices.
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