This Global Company is Rehashing India's Growth in Real Estate
"Stick with the philosophy of company"
Larry Oberly - Vice President, Global Development, Re/Max, oversees 100 countries of the real estate major. On his recent trip to India, post the Joint Venture of Re/Max India Master Franchise with Franchise India, we caught up with Larry to understand the strategy of Re/Max 2.0 in India. Here is more on his close to two decades, he spent in the company and the focus of Re/Max on existing countries. (Edited Excerpts)
Over the course of 19 years, how have you seen this global company evolve? Initially, we went to countries that were a little more regulated, transparent and had more systems in place. Later, we opened up to places that are more tough markets, so it’s moving fast.
Would India come in the top five countries, when it is about performance?
We have an amazing set of operations in terms of Re/Max India. In countries such as Portugal, Mexico, Spain, Italy, Israel, we have been operating for 20 to 25 years and they are far ahead as far as revenue and sales are considered. Some are more organized while others are highly priced so it is really a hard comparison. In terms of franchise sales, we have different terms of the tenure in the real estate category at the national and regional level. We have some great recognition from Re/Max India. It is just now that the draconian laws are removed to have a better outlook.
What are the strategies for a successful global foray?
The operations around the world that have really done well work exactly like the US and Canada model, in terms of building organizations of entrepreneurs and agent centric models. Initially, it seems difficult to follow but those whoever sticks with the philosophy of our company, they are successful and we start to grow. So it’s about sticking with the model, teaching people how to attract the right ones, attracting the right franchise that makes us successful. It doesn’t matter what country we are operating in. The core functioning of the organization is exactly what it is in the US.
Do you consider tweaking the model for different regions?
Sure, for Re/Max India it is different. The charging prices are different based on the economies. The commission of the agents depends from country to country like from the range of 80 per cent - 99 per cent. While in some places, it doesn’t work at all as the cost is higher, so the broker cannot afford to pay.
Which do you think are the best and the worst, in terms of performance?
Some of the operations that I am very proud of would be Portugal, where we have 20 per cent to 25 per cent of market share and we have 200 offices. In Italy, we have 275 offices and in Argentina, we have one of the best operations with 2000 agents and 100 offices.
I would go back to 2009, when Sam and Saloni Chopra opened Re/Max India, we knew that there would be challenges as the market was not regulated or transparent and it would be very difficult for people to change at once. There are several countries like this, where we have to be patient at the initial stage and find an appropriate partner, who would help us go to the next level. So, we went to countries like Armenia, Qatar, which did not work. They were small. Whereas in India, the opportunity is huge so it’s all about sticking to the fundamental promises of the organization and sustaining through the tough time.
In case you see that the owner has given up to the market, what do you do in those cases? We really want to help our initial owners to build what they really dreamt of, so we try to help them with the businesses that makes them happy. We do benchmarking across a region as well from the first consultation.
We follow a vibrant communication and sharing tactics that works when regional owners get together and communicate. Even in the US, we have owner changes, consolidations and all. For instance, in South Africa, one organization started with a single country and now they have 11 countries so they have been able to grow through their performance and also we have instances of ownership change in Canada, so we are also an extended strategist for few regions of North America.
Have there been instances where you have got back the franchises?
In a couple of them. We got them back in few and we have bought them back in others. Way back in 1998, we had a region in Caribbean extension and we had 100 franchise extensions in Cuba, we have an embargo with Cuba and we took that franchise and they actually bought the Australia region back in 2015. We eliminate opportunity in those kinds of things.
What are the expansion plans in the global market?
We are already a 100 countries strong and we don’t know if we have any more desires to go into. We have really built a great reputation in real estate. The focus has shifted to the countries where we have already spread to rather than spreading to any more countries.
The longest running partnership would be with which franchise?
Canada would be the longest from 1991. He was an agent for us in Canada.
How Re/Max US grew its operations further?
We brought in an exclusive BE firm in 2010, in the bottom of the US market. Re/Max went public in October 2013. The other founders are controlling interest in the company and they work in the office full time.
(This article was first published in the September 2017 issue of Entrepreneur Magazine. To subscribe, click here)