200 West Academy St.,
Gainesville, GA 30501

Main Content

Home » News | Blogs » AGENTS SHOULD NOT PAY REAL ESTATE FRANCHISE FEES!

AGENTS SHOULD NOT PAY REAL ESTATE FRANCHISE FEES!

WHY REAL ESTATE AGENTS SHOULD NOT PAY FRANCHISE FEES

For decades, the debate was whether it was better for a Real Estate Agent to work for a Traditional (Independent) Real Estate Company or a National Real Estate Company. The main difference centered around Traditional Companies stating that Real Estate was more local while National Brand Companies claimed their well-recognized name helped Agents get more business.

Having been in Real Estate for over forty years, I can end the debate in one sentence. “For the most part, people do business with an Agent not the Company.” In choosing an Agent, most people use a
friend in real estate, someone who has good name recognition or has been referred to them by other satisfied clients.

So if it’s true that people do business with an Agent and not a Company, an Agent could work for either a Traditional (Independent) Real Estate Company or a National Real Estate Company and
achieve the same results. Sounds simple, but as a smart Business Person you have to consider other factors… which includes money.

The main thing a person seeking a job is thinking is, “How much do I get paid?” while a Real Estate Agent is thinking, “What will my Commission Split be?”

An Agent interviewing with a Traditional (Independent) Real Estate Company or a National Real Estate Company may be told they will be receive 70, 80 or even 90% commission, but that is not exactly accurate.

An Agent with a Traditional (Independent) Real Estate Company receives 70, 80 or even 90% ofthe total 100% commission. However, with a National Real Estate Company a 6%, 7% or 8% Franchise Fee is deducted before calculating the commission split.

Traditional (Independent) Company:
$300,000.00 Sales Price
X 6% Commission
$18,000.00 Total Commission
X 70% Split
$12,600.00 Total Commission to Agent

$300,000.00 Sales Price
X 6% Commission
$18,000.00 Total Commission
-$1080.00 (6% Franchise Fee)
=$16,200.00
X 70% Split
$11,340.00 Total Commission to Agent

National Real Estate Company:
For some reason, Real Estate Agents don’t take into consideration the Franchise Fee National Brand Companies charge.

This is a Huge Mistake! An Agent is already giving part of their
commission for the same services a Traditional (Independent) Real Estate Company provides to their agents.

So the question becomes, ‘What benefits are you, as an Agent, receiving for the Franchise Fees taken out of each of your commission checks?”

In my opinion, ABSOLUTELY NONE!
Sounds like I am recommending Traditional (Independent) Real Estate Companies over National Real Estate Companies. In the past, that was true!

Now, I recommend 100% Real Estate Companies because Agents earn Maximum Commission plus pay No Franchise Fees.

Jack Waldrip is a Georgia Real Estate Broker with Waldrip Real Estate. The Corporate Office for Waldrip Real
Estate is located in Gainesville, Ga. and operates as a 100% Company with other added incentives for Real
Estate Agents