Converting a Family Business Into a Franchised Brand
Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email email@example.com.
For Matt Rand, real estate is a family business. However, when he took over Rand Realty, he wasn't content to continue with business as usual. In 2009, he converted the company to a Better Home and Gardens Real Estate franchise. Here's what he has learned.
Name: Matt Rand
Franchise owned: Better Homes and Gardens Real Estate Rand Realty, with 25 office locations with over 800 agents serving N.Y. and N.J.
How long have you owned a franchise?
We have been a franchise since 1984.
We are one of the top 100 real estate brokerages in the country, and have dominant market share in the markets we serve, but people coming from outside the area wouldn’t recognize us. A franchise allows us to leverage billions of dollars in brand equity to make our company instantly recognizable and appealing to consumers.
We’re attached to one of the most recognizable names in real estate, but our clients get the benefit of working with an entrepreneurial, family-owned, local broker. We’re able to offer local expertise because we know the schools, local history and housing styles better than anyone and we’re committed to bettering the communities we serve. For clients, it’s the best of both worlds.
What were you doing before you became a franchise owner?
Rand Realty is a family business that I was literally born into. My mother was a nurse prior to getting into real estate. After having kids, she wanted to go back to work, but preferred a career with more flexibility. So, she got her real estate license.
What started out as a side-gig turned into a major real estate franchise, which she founded more than 30 years ago. We grew up in this business and now have two generations of the Rand family running our franchise. That deepens our commitment to the communities we serve and it connects us to the 800 professionals who work with us every day.
Why did you choose this particular franchise?
First and foremost, it was the quality of the people running the franchise. We knew we would get tremendous value from the relationship based on their passion and talents. Second, more than any other real estate brand, Better Homes and Gardens speaks to home, family and lifestyle, and allows us to instantly connect with consumers.
Following the example of Better Homes and Gardens, we were able to create our own three-pronged philosophy to running a business focusing on service, technology and knowledge.
When it comes to service, we practice client-oriented real estate, meaning we always ensure our clients have a delightful experience. Part of that experience includes technology and we’ve always been the first in our region to adopt innovative technology. For example, we signed on with a company called dotloop that brings the entire real estate transaction online. Our consumers and our agents love to use it. Finally, we provide the best market intelligence in the industry, keeping our clients informed and giving them a competitive edge. We’re able to do all of this because we have the support of Better Homes and Gardens behind us.
How much would you estimate you spent before you were officially open for business?
We’re not comfortable disclosing this information.
[Editor's note: Entrepreneur estimates Better Home and Garden's total investment to cost $190,970 to $513,550, with a franchise fee or $35,000.]
Where did you get most of your advice/do most of your research?
When we were looking to change brands, we did our research by meeting with every major real estate franchise in the area. For us, our choice was mostly about the people who we’d be working with every day. There was no Better Homes and Gardens franchise in the area so this felt a bit like a startup for us, which was exciting.
A lot of the franchises were offering great products and services, but ultimately it came down to the people involved and what kind of impact those people would have on our business at the agent level as well as the corporate level.
What were the most unexpected challenges of opening your franchise?
We converted to Better Homes and Gardens Real Estate in 2009. We had already been operating with another franchise brand, so we knew what to expect as far as franchising is concerned. That said, we decided to make the switch to Better Homes and Gardens at the worst point in the real estate market and that’s been our biggest challenge overall. It was a great change for us and really energized our employees since we were doing something optimistic and making big waves in the marketplace at a time when few were.
A lot of people have asked how we managed to keep our employees motivated during that time. The answer is that while others were cutting back and trying to consolidate, we were rolling out new products, new services and making exciting changes to our business. The lesson to be learned here is that even if you’re scaling back in some areas, make positive, innovative changes in others and think ahead. Even when the market was bad, we were still looking to grow so we could reap the benefits in the future.
What advice do you have for individuals who want to own their own franchise?
Don’t expect any franchise to be a magic bullet and immediately provide you with a successful business. You have to run the franchise as you would any other business, keeping customers top of mind. No franchise name will save a poorly run business.
What’s next for you and your business?
We’ve expanded into New Jersey and we are planning to continue to grow. Our goal is to reach $100 million in revenue in the next five years. We hope to reach a new subset of the consumer and cater to a new generation looking for homes through innovative and creative strategies.
Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor.