Want to become a franchise brokerage for a national brand? Here’s what it costs

Fees range from $2K to $35K, plus extra for marketing and tech

TRD New York /
Dec.December 29, 2017 08:00 AM

Screenshots from Realtor magazine’s annual franchise report

Thinking of flying Warren Buffett’s flag to boost the profile of your bootstrapped brokerage? It’ll run you $25,000.

That’s how much it costs to become a franchisee of Berkshire Hathaway HomeServices, the conglomerate’s real estate franchise network of over 1,200 offices across the U.S. Earlier this year, Berkshire Hathaway came to New York City, traditionally a fiefdom of independent brokerages but still a market in which franchise brands have a substantial footprint.

A third of the 32 franchise companies in Realtor Magazine’s annual franchise report has a presence in the New York area, with a strong showing in the outer boroughs. The report breaks down the costs associated with becoming a franchisee of the biggest brands.

The largest brand with a New York presence — Century 21 Real Estate — has 2,216 offices around the country and 128 in the metro area, with a concentration in Brooklyn and Queens. Century 21 franchisees pay royalties of 6 percent of gross revenue per transaction, plus a marketing fee (2 percent of gross revenue) and a training fee of $399 per attendee.

Other big names nationally with a foothold here include Weichert Real Estate, which has offices in Soho and in Rockefeller Center, and Keller Williams, which has eight offices in the city. Keller Williams charges franchisees a 6 percent royalty fee (capped at $3,000 per agent per year) as well as a $1,000 per office annual marketing fee, a technology fee ($79 per office), an educational fee ($299 to $2,500 per course) and a $500-per-office fee for KWConnect, an online training portal.

What’s less clear is how much of a benefit being attached to a national brand really has in New York. Last year, The Real Deal analyzed the pros and cons for New York firms making alliances with national brands. The verdict was mixed.

Following is a list of brands with a New York presence and the going rates to open a franchise.

Better Homes and Gardens Real Estate
$35,000 (first office) and $10,000 (branch)

Engel & Völkers North America
$35,000

Keller Williams
$35,000

EXIT Realty USA
$32,000 (urban) and $7,500 (rural)

Berkshire Hathaway HomeServices
$25,000 (first office) and $2,500 (branch)

Century 21 Real Estate
$25,000 (first office) and $10,000 (branch)

Coldwell Banker Real Estate
$25,000 (first office) and $10,000 (branch)

Sotheby’s International Realty Affiliates
$25,000

Weichert Real Estate Advisors
$25,000

HomeSmart International
$20,000

NextHome
$2,750 to $6,750

Flat Rate Realty
$1,995

You can find the full Residential Franchise Report here.


Related Articles

arrow_forward_ios
(Getty)

Manhattan rents fall below $3,000 for first time since 2011

Manhattan rents fall below $3,000 for first time since 2011
Data on third quarter CRE investments suggests a nationwide improvement, but Manhattan has been slow to recover (iStock)

NY falls behind Dallas, LA in CRE investment as deals surge nationwide

NY falls behind Dallas, LA in CRE investment as deals surge nationwide
Existing home sales rose again in September as listed inventory sunk to a new low. (iStock)

Existing homes sales remain high, but inventory is “historically low”

Existing homes sales remain high, but inventory is “historically low”
 Jennifer Lawrence and 17 Jane Street with Edward Minskoff (Getty; Sciame Construction)

Jennifer Lawrence buys at Ed Minskoff’s West Village condo

Jennifer Lawrence buys at Ed Minskoff’s West Village condo
Gov. Andrew Cuomo (Getty; iStock)

New York City lifts lockdown for some Covid hot spots

New York City lifts lockdown for some Covid hot spots
217 West 57th Street with Extell Developement's Gary Barnett and Corcoran's Pamela Liebman (Photos via Extell; Barnett via Anuja Shakya)

Extell brings on Corcoran Sunshine to help market Central Park Tower

Extell brings on Corcoran Sunshine to help market Central Park Tower
660 Madison Avenue (Photo via Jenel Real Estate)

Safra family finally begins 660 Madison’s office-to-resi conversion

Safra family finally begins 660 Madison’s office-to-resi conversion
The Northeast is driving gains in building permits and housing starts (iStock)

Northeast drives gains in building permits, housing starts

Northeast drives gains in building permits, housing starts
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...