Questions to Ask Before Buying a Real Estate Franchise

Questions to Ask Before Buying a Real Estate Franchise

Do your research before buying a real estate franchise. Asking the right questions can give you the inside scoop. We suggest you start by asking these seven questions in order to learn more about real estate franchises and see if they are right for you.

1. What is the reputation and experience of the franchise you are considering?

Imagine it as a process of interviewing a candidate who will be joining your team. Get to the bottom of who they are and their reputation. You can ask:

  • How long have they been in real estate?
  • If they are a broker and know the challenges that brokerages face every day
  • How long have they been franchising?
  • What is the number of franchisees?
  • Success stories of current franchisees
  • The locations of the franchises
  • The average length of time that a franchisee is in business
  • You can find out about their reputation by checking social media channels and speaking to colleagues and customers.

You can also ask for referrals so you can speak with a current franchisee owner. This information should be readily available from a franchisor who does not have anything to hide. Their current franchisee-broker-owners are their best brand ambassadors.

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2. What is required of you by the franchise?

Be sure to understand the franchise’s business model and legal obligations before you sign any agreements. You can consider everything from your initial investment to financials over the years, and even the location where you open up shop.

Ask the following questions to your potential franchisee:

  • What are your suggestions for where to open my office (or do I even need one)?
  • Is it necessary to approve the location of my business?
  • Do you have to approve my lease agreement?
  • Is there a minimum amount of employees required to run my business?
  • Do I have to use third-party vendors such as architects or contractors?
  • Do I have to work with specific real estate brokers? Who is responsible for paying these fees?
  • What happens if I decide to sell my franchise later?

You can check the contract before you sign to see if many of these questions are already answered. Ask if you are not sure. There is no question that’s too silly or detailed. Before making a decision, you should be aware of your obligations and expectations.

3. What kind of support can you expect once you sign up?

In the first few weeks and days of opening a new franchise, onboarding support is crucial. Ask if there is a dedicated team that will help you get your new brokerage started.

Find out what kind of support they provide to convert your business. Do they notify your agents of your new affiliation? You can be trained on how to use the franchise tools and systems. You will also need to replace yard signs, exterior signage, and business cards. Should you send out a community press release? All of these details are important and can make or ruin a smooth conversion.

4. What tools and resources are you going to get?

One of the advantages of buying into a real estate franchise instead of opening your own brokerage is that you will have access to a variety of tools and resources at any time. National franchise brokerages are known to offer a lot of support in the areas of sales and marketing. Don’t assume anything. You can ask for clarification by asking about what you receive as a franchisee owner-broker, including selling resources, templates, tools, technology, coaching and training, as well as networking events.

You can ask about marketing materials such as cold call scripts, email templates, and website templates. What customizations are possible? You can still benefit from a well-established brand and maintain your own personal touch by knowing what customizations are available.

Ask about the technology platforms they provide and if you can get it as part of your package. Our marketing resources and tools include easy to use designs that allow you to create flyers, postcards and brochures. These things will help your business grow over time.

5. What are the networking opportunities within the franchise?

Franchising can have a number of advantages, including the ability to network. Learn about the formal and informal ways franchisees and brokers can network with each other. You and your agent team will be able to take advantage of these networking opportunities, which include ideas, information and support. You can grow your real estate brokerage by tapping into the experience and knowledge of other franchise brokers. This is particularly important for a new broker.

franchise costs and fees

6. What are the total costs and fees?

The initial investment for each franchise can be different. To get an idea of the upfront cost of the real estate franchise, you can search The Entrepreneur’s database for real estate franchises. Renewal costs can range from five years to twenty, with fees for each interval. Renewal fees are usually 50% of the original franchise fee. This should be factored into your long-term plan.

Ask about royalties. It is usually a fee per month paid to the franchiser, which can range from 3% to 6% of gross commissions, or a fee per agent per month ranging between $25 and $400. The franchisee does not pay the royalty fees directly. They are passed on to the agents.

7. What is the culture of franchises?

You should also consider the softer aspects of the franchise. Understanding the company culture will help you find your “fit.”

For example, 1 Percent Lists operates like a big family where everyone helps each other succeed and supports them. Our core values are often the main reason franchisees choose to join our network. Our values are similar to theirs. Franchise brokers are usually self-motivated and driven. We all love what we do and take pride in helping both our teams and individual brokers succeed.


A real estate franchise can be a lucrative business. Do your research and ask questions before you fill out an inquiry form for a franchise. You should read the FDD. Before you move forward, it’s a good idea to consult with a financial advisor and/or an attorney to make sure that you are in the best position to succeed and buy a real estate franchise.

Reach out to 1 Percent Lists Franchises with any questions you have. We can help you understand how a franchise works and what it means for you.