FRANCHISING is one of the best routes toward entrepreneurship.
With a reliable franchise as a business partner, a fledgling entrepreneur can be guided and trained properly in running the business. Denver, Colorado-based RE/MAX saw the potential of franchising in the country’s real-estate sector as the company continues to show dynamism and growth in the past six years.
Kenneth Stern, country manager of RE/MAX Philippines, said the country is an attractive market in real estate mainly because of its strong macroeconomic fundamentals and strong remittance from overseas Filipino workers. As a result, RE/MAX launched six years ago its franchising model in the property sector.
The real-estate juggernaut has more than 125,000 real-estate brokers and agents in its network of 8,229 offices in more than 100 countries and territories across the world—one of the world’s largest—if not the largest real-estate brokerages.
Aside from its broad network, Stern said, Filipino real-estate professionals could learn a lot from their American counterparts such as having a goal-oriented mindset and who thrive on challenges. If you are basketball fanatic, you can imagine they are looking for people who have the passion and drive of a Michael Jordan.
Moreover, Stern said, the franchising model in the local property sector seeks to professionalize and make it on a par with global standards. Moreover, the Filipino-American executive said, a real-estate agent or broker could put her or his own business with the backing of a global brand.
Aside from offering higher commissions, RE/MAX offers agents and brokers the support in marketing. He disclosed in an earlier interview with a local publication that has more than an average of 15 transactions in a year.
Stern said RE/MAX is pushing the envelope further by promoting inclusivity. “Being in the country for six years now, we want to spread the growth to the other parts of the country,” he said. It has opened 30 branches nationwide. It had recently opened two branches in Cebu, one in Bacolod, Iloilo, Mindoro and Antipolo. “We’re planning to open in Clark and Davao soon,” he said.
“We have opened branches in Tuguegarao, Siargao and Palawan. “We’re looking to expand in other areas of the country,” he added.
“The vision of RE/MAX is to professionalize real estate in the Philippines. We are also growing that, especially in new markets,” he pointed out. As an emerging market, the expertise of RE/MAX can be tapped especially in the countryside in terms of identifying the legitimate brokers and professionalizing the industry, among others.
Stern said emerging cities have also caught their attention because of the boom enjoyed by the local property sector. “Who would have thought that we will open an office in Siargao,” Stern pointed out.
According to Stern, as RE/MAX opens more franchises and collects more data, it will be interesting to see how other areas perform in the secondary market, especially with regards to foreign buyers.
“As a global company, RE/MAX is in good position to help its brokers and agents get worldwide exposure, giving them access to foreign markets that were previously inaccessible to them,” said Stern. “As we expand, we also aim to include more locations to our data and see how up-and-coming locations are performing with the entry of RE/MAX, Stern said, adding that they will introduce professionalism in the property industry, especially to the people living in the provinces. “There’s an opportunity there for companies looking for investment,” he said.
“Our goal in every country we operate is to professionalize the real-estate industry. In the Philippines, we are still growing that. The Philippine real industry needs more professionalism. We want to boost the brokers’ capabilities and expand nationwide,” he said. “Moreover, the people can leverage the multinational experience so they can enhance their businesses,” he added.
Stern stresses that their franchising model also fosters entrepreneurship in real estate. “For the first time in the Philippines, a real-estate broker or agent looking for a better opportunity can start…[and] own [a] business using the credibility of a big name in real estate. We specialize in helping entrepreneurs get their business started or help business owners scale up their existing real-estate business.”
Stern added that their business model works because it is not just about selling more real estate. “It is about helping agents make more money in less time and giving them the flexibility to control their own schedules. Our system is about finding top producers who want to professionalize in the real-estate industry and be in control of their own legacy in the industry.”
As testament to Filipino brokers’ high level of professionalism, RE/MAX Philippines has four brokers in the top 100 RE/MAX brokers in the entire world in 2017. “One of them in fact is No. 2 in the world,” shared Stern.
So effective is its franchising business model that according to a survey of major players in the United States, RE/MAX agents close the most number of transactions per year, which is 17.2 per agent in 2016—that’s more than one property, sold per agent each month.
In the Philippines, the numbers are not too distant: in 2017, each agent of the company closed on average 15 transactions, which is equivalent to a sales volume of P243 million and commissions of P3.7 million.