Is it better to build or franchise a real estate brokerage?

Building an Independent Brokerage

Building your own independent brokerage means creating everything from scratch: your brand, your systems, your technology, and your operations. This approach offers maximum control and flexibility.

Advantages of building:

• Complete control over your brand, operations, and decisions
• No franchise fees or royalties
• Flexibility to adapt quickly to market changes
• Ability to build equity in your own brand
• Freedom to set your own commission structures and policies

Disadvantages of building:

• Higher upfront costs for technology development ($500K-$2M+)
• No established brand recognition
• Must build all systems and processes yourself
• Longer time to market (12-24 months for custom software)
• All risk and responsibility falls on you

Buying a Franchise

Franchising provides an established brand, proven systems, and ongoing support in exchange for fees and reduced autonomy. Major real estate franchises include Keller Williams, RE/MAX, Century 21, and Coldwell Banker.

Advantages of franchising:

• Immediate brand recognition and credibility
• Proven business systems and training
• Marketing support and national advertising
• Technology platform included
• Network of other franchisees for support

Disadvantages of franchising:

• High upfront franchise fees ($50K-$200K+)
• Ongoing royalties (typically 6-8% of gross commission income)
• Limited control over branding and operations
• Restrictions on commission structures and policies
• Less flexibility to adapt to local market conditions

Cost Comparison

Building an independent brokerage:

• Custom software development: $500,000-$2,000,000
• Brand development and marketing: $50,000-$200,000
• Legal and licensing: $10,000-$30,000
• Office setup (if physical): $50,000-$200,000
• Total first year: $610,000-$2,430,000+

Buying a franchise:

• Franchise fee: $50,000-$200,000
• Office build-out: $100,000-$300,000
• Marketing and launch: $50,000-$150,000
• Ongoing royalties: 6-8% of gross commission income
• Total first year: $200,000-$650,000+ plus ongoing royalties

The White-Label Alternative

White-label platforms like Brokurz offer a third option that combines the best aspects of both approaches:

Independent-level control:

• Your brand, your domain, your customer experience
• Full control over commission structures and operations
• No franchise fees, royalties, or restrictions
• Flexibility to customize and adapt

Franchise-level technology:

• Enterprise-grade CRM, transaction management, and commission processing
• Comprehensive agent management and onboarding
• Built-in compliance and document management
• Professional reporting and analytics
• 24/7 support and training

Cost advantages:

• Monthly platform fee: $500-$2,000 (vs $500K-$2M+ for custom development)
• No franchise fees or royalties
• Launch in days or weeks (vs 12-24 months for custom software)
• Total first-year cost: $15,000-$40,000

Which Option is Right for You?

Choose building if: You have $500K+ for custom development, want complete control, and have 12-24 months to launch.

Choose franchising if: Brand recognition is critical in your market, you have $200K+ for franchise fees, and you're comfortable with ongoing royalties and restrictions.

Choose white-label if: You want independent control with franchise-level technology at a fraction of the cost, and you want to launch quickly without massive upfront investment.