Franchising success: Insights from real estate brokerage

Abstract

This article highlights factors that contribute to the success of franchising in the Australasian real estate brokerage industry. Evidence from both franchisor and franchisee perspectives reveals underlying fundamentals of competitive advantage. System success is argued to be based on the development of a complementary resource competency that ensures relationship sustainability. The franchisee adds value to the franchisor-initiated system and brand by developing presence and expertise in the local market. Franchisee screening and recruitment strategy is important, with prior experience and industry acculturation occupying a central place as a driver of success. The nature of entrepreneurship is a key question addressed and the strength of the entrepreneurial alliance is shown to be a component of the success equation. The pursuit of explanations beyond agency and resource scarcity theory widens the theoretical lens for examining the ubiquitous phenomenon of franchising in the real estate domain.