March 8, 2010 - A real estate franchise may be an intriguing investment for a property investor looking to expand.

Franchising allows a businessperson to invest and manage a proven successful business model and system with an already established brand. It permits the operator, referred to as the franchisee, to focus on the core aspects of the business, which is often sales, while the vision and growth of the system have been worked out in advance.

A good franchise system will provide the necessary training regarding operating the business so a franchisee doesn't have to be an expert in the service the franchise provides, however, it's still important to make sure that the service matches the franchisee's skill set and interests.

"Owning a franchise is not an automatic licence for success," says Walter Melanson, director of partnerships, Propertyguys.com Inc. "It still requires at lot of hard work and commitment of the owners. So, find something that you enjoy and are willing to put your heart and soul into."

The benefit to owning a brokerage is simple. If you own the brokerage, you own the listing. You will pay a 2.5 per cent commission to the co-operating broker (of record) to sell the property but you'll also save another 2.5 per cent commission by using someone in-house. In addition, you will have more control over the listing and pricing, making it possible to absorb some of the costs of selling your own properties, says Steve Zubovits, the national director of business development for HomeLife.

If you decide to research real estate franchises or real estate-related franchises as an investment option, we've got the low-down on what steps you need to take before signing on the dotted line.

For the full article, pick up a copy of the March issue of CRE, currently on newsstands