If you are the owner of a property management company, chances are you have thought about joining a franchise.
Joining a property management franchise can be a tempting option, and it certainly has its benefits for business owners.
But how do you know if it is the right choice for you?
The truth is, it all depends on what you want to gain – and what you are willing to give up.
When you join a franchise, there are many tools and benefits that you will gain access to. These tools can help you grow your business, automate your operations, and strengthen your team’s expertise.
However, there are also things that you will have to give up, including some of your revenue and ultimate control over your company’s procedures.
For some, the idea of joining a franchise can be extremely beneficial to the overall health of their business. For others, it may not be the best choice.
In this blog post, we will help you figure out which category you fall into.
We will first discuss what it actually means to join a franchise. Then, we will talk about some options regarding which franchises that your property management company can join. We will then talk about the main benefits to joining a franchise.
Finally, we will talk about the cons associated with this endeavor, and whether joining a franchise would be the right choice for you and your company.
So, if you’re ready to learn more, let’s dive in!
What Is a Property Management Franchise?
Many industry professionals decide that it is in their best interest to join a property management franchise, and at the end of the day, you may decide this as well.
But what exactly does joining a franchise include?
Essentially, the owner of a property management company enters an agreement with a larger organization in order to become a part of their franchise.
Then, in exchange for franchise fees and more, the property manager gains access to training, tools, brand recognition, and an overall greater support from the franchise.
When it comes to different property management franchises to choose from, you’ve got a fair amount of options.
For now, let’s touch on some of the most popular franchises that you could join.
Types of Property Management Franchises
Keyrenter Property Management
Keyrenter Property Management is a leading franchise that stands out in the competitive real estate industry.
The franchise offers a comprehensive suite of services, including tenant placement, property maintenance, and financial management.
Franchisees benefit from a proven business model, extensive training, and ongoing support, allowing them to thrive in the dynamic property management sector.
Real Property Management
As one of the first franchises in property management, Real Property Management is the most popular choice.
This franchise has been operating for over 3 decades, and they currently have around 350 franchises under their company umbrella.
PMI (Property Management Inc.)
If you work in residential property management, PMI can be a great choice if you are looking to join a franchise.
They offer lots of helpful services for a fee, including online training and ongoing franchise support.
They currently have about 380 locations under their franchise umbrella.
This company is another great option for anyone who works specifically in residential property management.
With a solid multi-day training course and high tech tools that can help automate your operations, All County is popular in property management for a reason.
Pros of Franchising Your Property Management Company
When considering whether or not it is the right choice for your company to join a franchise, it is important to determine what exactly the benefits are.
Training and Expertise
If you are a beginner property manager, having access to a wide range of training and expertise can be extremely beneficial to your career.
The training provided once you join a franchise is expansive, covering topics such as proper procedures for rent / fee collection, effective marketing techniques, legal training, accounting, and any other aspect of property management that you can think of.
If you already have a bit more experience in the field, though, you can still benefit from a franchise.
Your training will handle more of the specifics of the company, such as how they brand their business or the ways in which they work with owners and tenants on a regular basis.
Marketing Tools Resources
In order to grow and attract new tenants and owners, your property management company will need a strong marketing strategy.
However, taking the time to do this can be taxing on your business.
When your company joins a franchise, you will have access to their marketing tools, which makes your life significantly easier.
At the very least, you will receive the tools that are required in order to set up a marketing strategy that is truly effective.
At most, the franchise will simply handle all the advertisement for you, taking the task off your hands entirely.
Cons of Franchising Your Property Management Company
While there are certainly a lot of benefits that you can receive from joining a franchise, there are also some aspects that may be a deal breaker to your success as a property manager.
Here are some things that may stop you from wanting to proceed with joining a franchise.
The first downside to joining a franchise is the financial strain that it could place on your company, as there are a fair amount of costs required.
To put it into perspective, a property manager with a scrappy, DIY attitude can start their company with as low as $2000.
As a contrast however, it is recommended that candidates who are looking to join a franchise have as much as $75,000 available to start.
While it may be riskier to start your own business, you can also keep any revenue that you make at the end of the day.
When you are a part of a franchise, however, you will be paying franchise fees on a regular basis, in addition to the percentage of your revenue that the franchise will earn.
But what fees are associated with being a part of a franchise?
Well, most services that a franchise will provide to you will be associated with a fee of some kind. This includes things like marketing, software, training, renewals, and more.
Further, you could also find yourself subject to penalty fees along the road. This could be for a variety of reasons, including a bounced check, late payments, using unapproved suppliers, or marketing outside of your territory.
Another aspect of joining a franchise is following all of the rules and restrictions that are set by the company.
If you are a company that wants to set your own rules and business practices, then joining a franchise may not be for you.
The restrictions that come with joining a franchise include regulations regarding how your company can collect rent, handle vacancies, market to new owners and tenants, and more.
As a property manager, you know that each market and demographic comes with its own set of needs in order to make a rental property successful.
This means that it is important to consider the needs of your owners and tenants before jumping to join a franchise.
Consider whether your local market’s needs align with the franchise’s procedures, and whether or not it makes sense for your currently managed properties, tenants, and owners to change your way of doing things.
At the end of the day, before you decide to join a franchise, you must ask yourself the following question: Do I want my company’s reputation to be tied to this franchise?
This point can ultimately be a pro or a con in your decision making process.
If the company you are considering has an excellent reputation in the real estate industry, then it can work to your benefit.
You will have an easier time attracting owners and tenants alike if they know that the larger company that you work with is reliable and overall a good business to work with.
However, if the company you are considering has a less than positive reputation among real estate professionals, then attaching your business to theirs can hurt your growth.
The Bottom Line
If you are a property manager, you most likely have considered the option of joining a franchise. After all, there is a wide range of both pros and cons that are associated with joining a franchise.
On one hand, joining a franchise means that you will gain access to solid training and expertise that can help you become a better property manager in the long run.
You will also be able to access the company’s extensive marketing tools that will help your business attract more owners and tenants.
On the other hand, joining a franchise means being subjected to a wide range of costs and fees, in addition to giving up a portion of your revenue.
You also have to be willing to give up control over how your company operates on a day to day basis, and you will have to be able to figure out whether or not these new practices would make sense for your market and your existing clients.
So, should your company consider joining a franchise or not?
At the end of the day, this decision must be weighed by determining your company’s unique set of needs.
Do you have a specific set of practices that you are determined to stick to, or are you alright with doing business in accordance with someone else’s regulations?
Are you in a place financially where you can afford to join a franchise?
These are all questions that you need to ask yourself and your team before making this decision that can affect your business indefinitely.
If you want to know more about whether or not your property management company would benefit from joining a franchise, we can help.
Contact our team at Upkeep Media for our expertise.