Should I buy a real estate franchise office or an independent brokerage?

Both kinds of office can work. The question is which one suits you, your market and the agents you hope to keep. It helps to separate what the banner gives you from what it costs, and to find out what the franchise agreement lets you do before you commit. This page sets out the main trade-offs. It does not tell you which to buy.

Brand and referral network

A well-known banner can help recruit agents and bring referrals from other offices, relocations and national marketing. Ask the current owner which of those the office really uses. An independent office has to earn its reputation locally, but it can often say exactly what it stands for.

Franchise fees and agent splits

A franchise office pays fees to the franchisor, which reduces what is left to share with agents or keep. Some agents will accept a lower split for the brand and tools, and some will not. Look at how the office’s agents compare with those at nearby independents, and ask your accountant to model the fees on the financial statements.

Consent, term and territory

Ask whether the franchisor must consent to a transfer and whether it charges for one; the franchise agreement and your lawyer will say. Ask how much of the agreement is left, whether it can be renewed, and what rights you have over the territory. A franchise lawyer can read the agreement and any disclosure documents with you. The Canadian Franchise Association has background on buying a franchise.

What agents expect of the banner

• Training, tools and technology they would otherwise buy themselves.
• Referral flow and brand recognition with clients.
• Freedom to run their own business, which an independent may offer more of.