Investing in a RE/MAX Kenya Franchise? Here's some Q n A to help you decide....
RE/MAX Kenya offers many important benefits to our Affiliates in addition to a strong brand. With RE/MAX Kenya you receive:
- 1. Respect from the public, which can translate into better and potentially more buyers and sellers, and better and potentially more commissions.
- 2. The opportunity to receive national and international referrals.
- 3. Cutting edge technologies that can help you do more business.
- 4. A comprehensive library of training materials for the Franchisee and their Agents.
- 5. World class conventions where you will learn, establish new business contacts, and have fun!
- 6. An innovative global advertising program.
- 7. The freedom to operate your own business for yourself without the disadvantage of being by yourself.
- 8. The opportunity to leave a legacy for your family.
- 9. The opportunity to have an international business with a minimum investment.
- 10. And last but not least…..the use of the brand! RE/MAX is the best known real estate brand in the world.
Why doesn’t RE/MAX Kenya grant protected territories?
RE/MAX Kenya doesn’t grant protected territories because of the nature of the real estate business. Protected territories make sense in other industries such as food franchises in which most clients walk-in mainly because of the location of the franchise. The real estate business is different. Most clients come from the marketing efforts of the Affiliates, who spend much of their time out of the office. Thus, it is common for a RE/MAX Kenya Franchise to enjoy having properties and buyers in many different areas of the city, and not just one neighborhood. And two RE/MAX Kenya offices can be close in proximity and not be in conflict or in competition with one another, as their Affiliates may work with clients in all parts of the city.
What advertising does RE/MAX Kenya do?
Each Agent and Office contributes to the advertising fund every month. The purpose of this fund is to invest in advertising of the brand for the benefit of all Affiliates countrywide and worldwide. Each month, millions of dollars are invested in to the RE/MAX advertising fund around the world and each new Franchisee benefits immediately from this effort. Additionally, each Agent is an independent entrepreneur and is encouraged to advertise and market their services and properties within their local market. The main advertising tool is the recognizable “Red over White over Blue” RE/MAX “For Sale” yard sign that is placed on listed properties. Each Franchisee should also run independent advertising programs; this advertising effort at the office level is paid by the Franchisee and their Agents.
Could I list properties in other cities and countries?
RE/MAX Kenya Affiliates can list properties anywhere (but we do not recommend it). Distance creates barriers to offering quality service that the public expects from us. Generally speaking, it doesn’t make sense to drive more than one hour to show a property, so Affiliates should not list properties that are too far away. Thanks to the RE/MAX Kenya network of Affiliates there is still a way to benefit from properties that are distant, without having to list them yourself. By referring them to a RE/MAX office or Agent close to the property and receiving a referral fee! Let someone close to the property do all the work regarding it. They are best placed anyway. In the end, get a commission share.
How much will I earn from referrals?
The referral fee is negotiated between the Agents, but it is generally 25% of the commission. Here is an example. Suppose that Affiliate “A” sends a buyer to Affiliate “B” who is in another city or country. Affiliate “B” sells a house that was listed by a third Affiliate (Affiliate “C”) that may be a RE/MAX Affiliate or even a person from a competitor. As a result of the sale, let’s say Affiliate “B” receives a commission of $10,000. From this commission, Affiliate “B” will keep $7,500 and pay $2,500 (25%) to Affiliate “A” for referring the buyer.
Assuming 2 commission sides for the transaction; if the property was listed by Affiliate “B” (as opposed to another Agent/Affiliate “C”), Affiliate “B” will make $10,000 for listing the property (sell side) and $10,000 for bringing the buyer to the transaction (buy side). From the $10,000 made on the buy side of the transaction, Affiliate “B” will pay $2,500 (25%) to Affiliate “A” since he/she referred the buyer but will keep 100% of the sell side.
In other words, Affiliate “A” receives a $2,500 referral fee in both cases.
How are commissions shared when there are two Affiliates involved in a transaction?
Commissions are most commonly divided 50/50 when there are two sides to a transaction. 50% for the Affiliate that listed the property and 50% for the Affiliate that brought the buyer. Occasionally there may be 60/40 and 70/30 arrangements depending on the market condition and personal agreements between the agents. In some markets it is more difficult to find buyers and the buyer-side Affiliate may be paid more; the opposite may also be true.
What initial training does RE/MAX Kenya offer to Office Owners?
There is a mandatory course for new Franchisees and one cannot open a RE/MAX Kenya office without completing this course (Broker 101). This course teaches attendees how they can obtain the greatest profitability possible in a Franchise. This is not a course that teaches how to sell real estate; instead it is a course about owning and operating a successful RE/MAX Kenya Franchise. This is a free course and several people from one Franchise can and should take it as participants only have to pay transportation, hotel, and travel expenses. It is recommended that the Franchise owner (or Office Owner) and the Office Administrator (if applicable) attend. Agents should not attend as the content does not apply. This course is taught at the RE/MAX Kenya Regional Office as well as at the World Headquarters in Denver, Colorado and occasionally is also taught in other countries. This course covers topics such as:
- - Leadership techniques
- - How to recruit good Agents
- - How much to pay the Agents
- - Physical design and layout of an office
- - Technology
- - How to distribute leads amongst the Agents
- - How many Agents are necessary to achieve the break-even point
How many employees will I need to run the franchise?
In addition to you (the Owner) and your Agents, we suggest you fill the positions of Receptionist and Office Administrator. The receptionist will answer the phone, receive leads/clients, assign leads/clients to Agents and take care of other office tasks they are assigned. The Office Administrator will take care of accounting, prepare reports for the Regional Office, office website management, ensure that each property has correct documentation, make sure that Agents don’t owe anything to the office, and any other tasks they are assigned.
What size should my office space be?
The minimum size acceptable (save for some rare exceptions) at RE/MAX Kenya is 430.55 sq ft (40m2). The cubicles for Agents should be small and can be shared (which is to say, not assigned to a specific person). Each Agent needs at most 50 sq ft, so an office of 500 sq ft should comfortably accommodate at least 10 Agents. Thanks to smartphones and technology, Agents are spending more and more time outside of the office. We have offices that accommodate up to 20 agents in a 500 sq ft space. Accommodating a good number of Agents in a small space is one of the best ways to increase office profitability.
How much will the total investment be?
There are two scenarios:
- A) New Franchise: In addition to a Franchise Fee for a 5 year Franchise contract, the future RE/MAX Franchisee should have money to pay for furniture, equipment, lease payments, hiring of employees, signs, flyers, working capital for the first 6 months, etc.
- B) Existing Franchise (Conversion or Transfer): In addition to the Franchise Fee for a 5 year franchise contract, the future RE/MAX Franchisee should have additional funds to cover conversion costs.
- *Actual dollars will depend on your market.
How much commission should I pay my Agents?
It’s convenient to offer various options. One option could be for Agents with a lot of experience, who would like to keep a high percentage of the commission and are willing to contribute a good amount to the office to help cover fixed costs. Another option could be for new Agents, who will accept keeping a smaller percentage of their commission and are only able to contribute smaller payments towards the fixed costs of the office. This subject is covered in great detail in the course for new Franchises.