Taking it to the max...
The concept of a franchise is simple: Create a rigidly standardised product or service that meets a clear set of brand expectations. So how on earth does a real estate agency - which has completely unique, one-off products to sell - operate as a...
The concept of a franchise is simple: Create a rigidly standardised product or service that meets a clear set of brand expectations.
So how on earth does a real estate agency - which has completely unique, one-off products to sell - operate as a franchise?
The chief operating officer of RE/MAX Europe, Chuck Lemire, smiled at the question.
"With fast food like McDonald's, the recipe for success is to have a very standard product. Every outlet everywhere knows exactly what it has to do and how.
"With us, it is completely different. If I could stick with the analogy, we are like a banquet, where all the food is laid out on the table but the guest is free to pick and choose," he said.
"The franchisee is in business for themself. But it does not mean that they are in it by themselves. We are always here to help."
What RE/MAX clearly does offer is a recognised, international brand. This was the main motivation for JK Properties, which opened in Malta in 1999 and built up a reputation for letting on the local market. It wanted to expand into sales and felt that a franchise would be the best way to go.
"We looked at a number of franchises and decided on RE/MAX, opening the first outlet in April 2004. We now have eight RE/MAX outlets in Malta. We own four outlets outright and have shares in three others. The last is the first franchise as such, which we recently entrusted to Peter Sullivan," JK Holdings managing director Kevin Buttigieg said.
JK Holdings already employs around 75 people in all.
"It has been slow but steady and sure growth," Mr Buttigieg added.
The local offices benefit from the global brand awareness, which is boosted by carefully-selected sponsorships. There are also practical benefits, such as training modules. JK Holdings bases its induction courses on the eight-week Succeed course developed by RE/MAX.
Sales associates are not warranted in Malta so the standards have to be set by the agency.
"The strongest brand is vulnerable to competition so you have to rely on individuals. A brand is only as good as the person who provides the least service. This is why we focus on having the best agents in the industry," Mr Lemire said.
He said the skills he would look for in a RE/MAX agent are easy to spot.
"I could point out to you the people here in this lobby that I feel would be great recruits. Real estate is a service industry and people from hotel backgrounds do well. So do teachers as that is another profession that requires empathy and which is built around a relationship of trust," he said.
Mr Lemire, who is based in Vienna, was in Malta to attend RE/MAX's two-day training event at the Westin Dragonara, which catered to dozens of local and foreign sales associates. The first day was dedicated, among other things, to the recruitment of sales associates, and the skill in identifying people who would encapsulate the RE/MAX brand qualities. The second day was dedicated to business development.
"Europe is an exciting place to be. The next decade will see an enormous amount of change in terms of human transition and Europe will emerge as the place where people want to live.
"Eastern Europe is exploding and it is relatively cheaper to build up brand awareness there," he said.
"We are also making rapid inroads in the UK. Frank Polzler took RE/MAX into Canada, where it has had astonishing success. One of every two homes for sale in the Toronto area is listed with RE/MAX. He wanted to revolutionise the real estate business in Europe the way he had done in Canada. He has succeeded. We now have offices in 43 regions in 36 countries."
The only countries not yet tapped are Albania, Macedonia and Ukraine - and RE/MAX already has plans for all three. The target is to increase the number of agents nearly ten-fold in the next 20 years.
What about the Maltese market? Mr Buttigieg firmly believes that the market is stable, making it strong for both buyers and sellers.
"One way to gauge this is from the fact that sellers in prime areas are not accepting offers. They are not desperate to sell.
"The problem in Malta is that developers saw double digit growth in prime areas and expected it to happen in other areas as well. Clearly, it did not and this is where prices need to stabilise. The prices being asked were being pushed up artificially but they are now becoming more realistic," Mr Buttigieg said.
Mr Lemire, who has over 22 years' experience in the industry, is not concerned, seeing good prospects for long-term stability.
"I can understand why people come here. You feel comfortable straight away," he said.
Indeed, he thinks that international sales are an important part of the turnover. RE/MAX will help in no small way as its pan-European site lists all its countries' properties.
"There is more brand loyalty with a real estate agency than with many other products and services," Mr Lemire said.
"With more and more expatriates coming to Malta, anyone who has used RE/MAX before would feel much more comfortable using them here."
Clearly franchises have their benefits, even in this industry...
"We have already had 1.5 million hits on our local website," Mr Buttigieg said.
The RE/MAX story
1973: Gail and Dave Liniger, 20-something real estate agents from Denver, Colorado, decide to develop a new real estate concept. They create RE/MAX, an acronym for "real estate maximums".
1975: The first RE/MAX franchise is established outside of Colorado.
1978: On its 5th birthday RE/MAX boasts 1,000 sales associates and launches its first widely recognised trademark: the RE/MAX hot air balloon.
1979: Two Austro-Canadians - Frank Polzler and Walter Schneider - bring RE/MAX to Eastern Canada.
1988: The number of RE/MAX sales associates skyrockets to 20,000 and RE/MAX becomes the top real estate organisation in Canada.
1995: RE/MAX lands in Europe! Walter Schneider and Frank Polzler bring the Hot Air Balloon over the big pond.
2004: Malta joins the RE/MAX network.
2007: RE/MAX is now present in 35 countries in Europe with more than 10,000 sales associates in over 1,500 offices across Europe. Globally RE/MAX counts over 120,000 sales associates in more than 65 countries.
So how on earth does a real estate agency - which has completely unique, one-off products to sell - operate as a franchise?
The chief operating officer of RE/MAX Europe, Chuck Lemire, smiled at the question.
"With fast food like McDonald's, the recipe for success is to have a very standard product. Every outlet everywhere knows exactly what it has to do and how.
"With us, it is completely different. If I could stick with the analogy, we are like a banquet, where all the food is laid out on the table but the guest is free to pick and choose," he said.
"The franchisee is in business for themself. But it does not mean that they are in it by themselves. We are always here to help."
What RE/MAX clearly does offer is a recognised, international brand. This was the main motivation for JK Properties, which opened in Malta in 1999 and built up a reputation for letting on the local market. It wanted to expand into sales and felt that a franchise would be the best way to go.
"We looked at a number of franchises and decided on RE/MAX, opening the first outlet in April 2004. We now have eight RE/MAX outlets in Malta. We own four outlets outright and have shares in three others. The last is the first franchise as such, which we recently entrusted to Peter Sullivan," JK Holdings managing director Kevin Buttigieg said.
JK Holdings already employs around 75 people in all.
"It has been slow but steady and sure growth," Mr Buttigieg added.
The local offices benefit from the global brand awareness, which is boosted by carefully-selected sponsorships. There are also practical benefits, such as training modules. JK Holdings bases its induction courses on the eight-week Succeed course developed by RE/MAX.
Sales associates are not warranted in Malta so the standards have to be set by the agency.
"The strongest brand is vulnerable to competition so you have to rely on individuals. A brand is only as good as the person who provides the least service. This is why we focus on having the best agents in the industry," Mr Lemire said.
He said the skills he would look for in a RE/MAX agent are easy to spot.
"I could point out to you the people here in this lobby that I feel would be great recruits. Real estate is a service industry and people from hotel backgrounds do well. So do teachers as that is another profession that requires empathy and which is built around a relationship of trust," he said.
Mr Lemire, who is based in Vienna, was in Malta to attend RE/MAX's two-day training event at the Westin Dragonara, which catered to dozens of local and foreign sales associates. The first day was dedicated, among other things, to the recruitment of sales associates, and the skill in identifying people who would encapsulate the RE/MAX brand qualities. The second day was dedicated to business development.
"Europe is an exciting place to be. The next decade will see an enormous amount of change in terms of human transition and Europe will emerge as the place where people want to live.
"Eastern Europe is exploding and it is relatively cheaper to build up brand awareness there," he said.
"We are also making rapid inroads in the UK. Frank Polzler took RE/MAX into Canada, where it has had astonishing success. One of every two homes for sale in the Toronto area is listed with RE/MAX. He wanted to revolutionise the real estate business in Europe the way he had done in Canada. He has succeeded. We now have offices in 43 regions in 36 countries."
The only countries not yet tapped are Albania, Macedonia and Ukraine - and RE/MAX already has plans for all three. The target is to increase the number of agents nearly ten-fold in the next 20 years.
What about the Maltese market? Mr Buttigieg firmly believes that the market is stable, making it strong for both buyers and sellers.
"One way to gauge this is from the fact that sellers in prime areas are not accepting offers. They are not desperate to sell.
"The problem in Malta is that developers saw double digit growth in prime areas and expected it to happen in other areas as well. Clearly, it did not and this is where prices need to stabilise. The prices being asked were being pushed up artificially but they are now becoming more realistic," Mr Buttigieg said.
Mr Lemire, who has over 22 years' experience in the industry, is not concerned, seeing good prospects for long-term stability.
"I can understand why people come here. You feel comfortable straight away," he said.
Indeed, he thinks that international sales are an important part of the turnover. RE/MAX will help in no small way as its pan-European site lists all its countries' properties.
"There is more brand loyalty with a real estate agency than with many other products and services," Mr Lemire said.
"With more and more expatriates coming to Malta, anyone who has used RE/MAX before would feel much more comfortable using them here."
Clearly franchises have their benefits, even in this industry...
"We have already had 1.5 million hits on our local website," Mr Buttigieg said.
The RE/MAX story
1973: Gail and Dave Liniger, 20-something real estate agents from Denver, Colorado, decide to develop a new real estate concept. They create RE/MAX, an acronym for "real estate maximums".
1975: The first RE/MAX franchise is established outside of Colorado.
1978: On its 5th birthday RE/MAX boasts 1,000 sales associates and launches its first widely recognised trademark: the RE/MAX hot air balloon.
1979: Two Austro-Canadians - Frank Polzler and Walter Schneider - bring RE/MAX to Eastern Canada.
1988: The number of RE/MAX sales associates skyrockets to 20,000 and RE/MAX becomes the top real estate organisation in Canada.
1995: RE/MAX lands in Europe! Walter Schneider and Frank Polzler bring the Hot Air Balloon over the big pond.
2004: Malta joins the RE/MAX network.
2007: RE/MAX is now present in 35 countries in Europe with more than 10,000 sales associates in over 1,500 offices across Europe. Globally RE/MAX counts over 120,000 sales associates in more than 65 countries.