FRANCHISE VS. GOING IT ALONE
For Realtors today, the options are vast in terms of which company to join — if they’d like to join a company at all. Some agents, such as Jane Glenn with RE/MAX, prefer the recognition that comes with joining a large franchise, while agents like Anthony Gambino with MSK Realty enjoy the freedom permitted by a smaller independent firm. Despite the current economy, some brokers are eager to explore the world of owning their own franchise or starting an independent firm. In the following pages, Jim Roth of The Real Estate Group shares his feelings about starting his own firm, while Constance Antoniou provides a step-by-step guide to purchasing a franchise. Starting from scratch can be a difficult task, and Mike Sato and Chris Feurer feel lucky to have joined forces with names like Charles and Harry Huzenis, which they address in Chicago Agent’s first-ever roundtable discussion. We’ve also included thoughts from a variety of other agents that highlight the many opportunities available today.
In the end, the decision of which company to join can only be made by each individual Realtor. There is no right or wrong answer to the question of where to belong, but instead each agent must follow their own individual path to success. In our cover story, we’ve provided insight into a variety of options to help agents make one of the toughest decisions of their careers.
Buying Into an Existing Brokerage
A roundtable discussion with the owners of Jameson
By Zipporah Porton
In August of 2008, Christopher Feurer, the principal of the Feurer Companies, and Michael Sato, his partner at CRF Marketing, joined forces with the principals of the Jameson Realty Group, Harry and Charles Huzenis, to form Jameson LLC. Feurer and Sato became CEO and president, respectively, of the new Jameson, while the firm’s founders are still actively involved with the ongoing operations.
To find out the details of the sale, as well as how the new company has grown and matured, I sat down with the four main players, as well as agents Mike Battista and Lindsey Delrahim on the residential side and Will Crowden with the expanded commercial division.
It quickly became clear that the new incarnation of Jameson is continuing to develop, despite the ebbs and flows of the economy. Sato and Feurer may hold the title of president and CEO, but a mutual respect was visible between all members of the company, and a playful camaraderie continued throughout the candid discussion.
Zipporah: Let’s start from the beginning. How did the deal go down?
Harry Huzenis: We knew Chris and Mike over the last couple of years [before the merge]. We had been looking at our business and we felt to really provide what agents needed and to be competitive and stay competitive, we needed to grow. Technology was getting more extensive and we needed some fresh marketing. These guys were great marketers. We approached them, they were interested and we cut a deal in one night. It took months to work out the details, but in terms of reaching a dollar amount between us and a general structure – that took place in one evening. It’s been a great relationship for the last 24 months. We have not had one disagreement. We have different points of view, but we’ve never had an argument.
Charles Huzenis: I think he captured it. We looked at the markets and like most businesses you have to continue to grow or you will fade back. We looked at where we were in our careers and felt we wanted to continue but we needed growth and they (Sato and Feurer) had a stellar track record as the two top marketers in the GMAC program. We felt we had a lot of good people and it would be a creative [decision] joining together.
Z: Were you surprised when they approached you?
Chris Feurer: It wasn’t expected. Once the idea was out there it was very natural. It fit immediately. Mike and I quickly realized the Jameson brand was near 30 years old and was solid as can be in the industry. For us to start something from scratch would be difficult. You had a complete organization built around a solid noteworthy, trustworthy reputation. And we immediately saw we could bring a new level of marketing technology and growth, and that pairing was too good to pass up.
Z: Did you think about it for a while, or was it a pretty easy decision?
Mike Sato: It was an easy decision, I think. For Chris and I it was twofold. First to be able to buy a reputable company and be partners with Charley and Harry. I was fortunate to work with them in 2001 for a year when I was marketing a project, and it was a great company. They were at the forefront of developments and real estate and Chris and I had a lot of momentum going and it made sense to bring all our talents together.
Z: How much are you involved, Charley and Harry?
Charley: We are usually the last ones out of the door every night except for maybe Will (Crowden). We’re still highly involved. We’re here to see the company grow and be supportive. There’s a huge amount of potential and opportunities that are forming, that are getting developed now, which couldn’t happen if the markets were riproaring. Things are shaping because the markets were struggling. That couldn’t occur in hot markets. So I don’t think the result of what was put together is going to show for a little bit of time — but then I would say watch out.
Mike S: For Chris and I, being first-time owners and being in the most challenged markets, to have the experience level and civility and calmness they bring to the table was phenomenal. There were times we wanted to pull our hair out and they’d say let’s sit down and talk about it. We’ve always been able to work it out and find that right path, so for us it’s been helpful to have their experience — they’ve been through a lot in these tough markets.
Charley: Harry and I just pulled our hair out a long time ago.
Z: What has changed at Jameson?
Lindsey Delrahim: The marketing department is in-house and it is a streamlined process and innovative in terms of our online system, virtual assistant and projects that are provided with marketing. From Eblast to signage that stands out in the marketplace, it is produced here, so the access to that is excellent. We come up with creative ideas, and Chris, Mike, Charley and Harry are here to help agents process the decisions immediately versus going up a corporate ladder.
Chris: One of our main concepts here is that with one main location, 20,000 square feet houses a lot of talented people. We started seeing a disconnect in the industry when you had numerous offices. This central location allows us to be in direct contact with agents on a day-to-day basis. When Lindsey has a great idea in marketing for a project, we can immediately jump on that and make a switch without going up a corporate ladder. We make a decision, we confirm with our managers and we implement it. And we have the resources in house to do it and it comes out creative and concise and makes an impact. Whether that’s commercial or residential the capacities are equal on both sides.
Will Crowden: Whenever we have an idea or a project or something we may need advice on or help and insight with industry history, we can walk into Harry and Charley and Chris and Mike’s office and I can sit down and pick their brains. Not a lot of people can say they can do that on a regular basis and it’s an unbelievable resource.
Z: What about with new agents?
Chris: We’ve added 200 agents in two years. We’ve got that process down. Agent concierge does a complete inundation of the process —
Mike S: We do a full orientation and acclimation to Jameson’s systems and resources. The concierge walks around and introduces the agent to all the members of management. It’s a pretty full-blown process. Depending on their years of experience, we have training classes from rookie 101 to something that would be more like web 2.0. I meet with most of the new agents. For the most part we hire people who are experienced. Now and then we see talented individuals that can add value and we bring them on. Sometimes we set them up in a mentoring program where we bring in a more experienced agent to take them under their wings to help them through the process. Our doors are always open. I would say a majority of the new people are referrals to us from someone who we know.
Z: What changes have Chris and Mike implemented?
Chris: Twenty-eight employees onsite any day. Any other office maybe a managing broker and other employees, but nowhere near 28 people and that value is almost intangible. People don’t know what they need until they need it and if you don’t have an answer the opportunity passes you by.
Z: Have you really never had any disagreements?
Harry: The world that came about in September 2008 was so different than what had preceded over the previous 10 years. There were many challenges and many brand-new landscapes in the real estate world. It became harder for the agent in every part of the sales and leasing process and it became a more difficult decision for the principals involved. I think every agent had to get better at their craft. We had so many challenges that we didn’t have time to disagree on anything. It was really managing sellers’ expectations, buyers’ expectations, getting financing for people. It was challenging for a while. Part of 2008 and 2009, particularly on the commercial and residential side, you had a lot of lenders that were adrift in knowing how to underwrite deals. All hands were on deck working through, trying to help everybody survive in the market and prosper. During that time a lot of growth occurred and we were able to provide that level of stability to the agents and so forth.
Z: Was there ever a moment where you guys thought, “Maybe this isn’t a good idea to get involved in starting out a business right now?”
Chris: There was no time to think to the contrary, it was purely instinctual to move forward. Knowing the base was there, we knew that the market could be overcome by a good business plan. And it just seemed to follow suit that the talent was attracted to us. And that’s probably our other general promise: When you’re surrounded by talent, that will inspire you to do better and more talent will come to you. Since we’re one office we can be more choosy, we don’t have to have 1,000 agents. We’re hovering on a 250- to 300-agent range and it seems to be a very comfortable area to have a lot of talent and maintain it.
Lindsey: That attitude of moving forward, which was obvious here at Jameson, really helped the mentality of the average agent during those hard times.
Mike S: That’s a good point. I think that when you look back to September 2008, which we all try to forget, most companies were retracting and closing offices and cutting back on resources and staff, they were trying to control their expenses. We took a different approach and we said this is a time for us to grow and gain market share aggressively with marketing, technology and recruiting and with going after business. Looking back two years, that really help set the foundation for where we are today.
Z: What are your plans for the future? Do you think you will open another office?
Harry: There is so much growth taking place right here that there hasn’t been a need to grow geographically. And the world has changed and with Internet there is not a requirement to have 10 offices of bricks and mortar because people are pretty mobile and could work in different areas in the city and suburbs and they can operate very well remotely without a physical office in every marketplace.
Mike Battista: As an agent, I feel the same way. I don’t think it’s necessary to have six different offices in different locations, I think the presence of signs, the talent — the people coming in from the street is more reflective of being able to broaden that scope of business than an office would be in another neighborhood.
Mike S: We’re seeing our agents diversify their business. There was a time when the agent was doing the city business and couldn’t do the suburban or anything outside their strike zone. Now we see agents doing business in the North Shore and the western suburbs. And agents in the North Shore and the suburbs in the city. It’s pretty interesting with the technology, you can be a virtual agent. For us to be able to create the synergy and have the high excitement and energy level here, that’s going to be our magic sauce, or whatever you call it.
Will: The marketing support I’ve had here has helped me secure more suburban business and penetrate different markets that I’ve been wanting to for a long time, but just couldn’t. But now being able to get in front of them with beautiful marketing pieces and a different fresh perspective, I’m able to secure those accounts.
Z: Do you have any advice to other agents about opening up their own company?
Mike S: Chris and I considered opening our own firm for a second, but it was way too much responsibility and liability. To be able to associate ourselves with Charley and Harry and Jameson, something that has been established in the marketplace, it was just that much easier. It was still a hard process but it got us to the next level and got us over the hump. You don’t have to get a new staff and get new agents. There are so many things that I don’t know that we wouldn’t have been able to do anything. We would’ve been too busy worrying about everything. I think the size of our company and where we want to stay is one of the most important directions and paths we want to continue on. We want to be big enough to enjoy the economy and do some things in the marketplace that will give us exposure. But not too big so we can give attention to our agents. Be able to be nimble and agile as the market changes. Those are hugely important to us.
Z: Has not being a national name ever hurt? How do the people who aren’t from Chicago find you?
Chris: Of all the effective avenues of marketing out there, we are so pinpoint accurate on reaching all those avenues, and we do it in a way that we provide the amount of resource that’s not only required but goes above and beyond. And we insure that anyone coming to the market is going to find to us first. It has nothing to do with whether they saw us in New Hampshire, they sought us out because we were in a place we knew they were looking.
Charley: We’re also seeing, because we see large developers and national developers, we’re finding that the very successful investors and developers are realizing they want the local market knowledge to get really tight now. They want to come in from other states and want to know who’s in Chicago, who’s focused on Chicago, they don’t want to hear what you know in Florida or Washington, D.C.
Chris: All real estate is local. That’s the root
Charley: It was a real awakening. I’m talking about developers who do multi billion dollars in business. We hear this over and over again. How focused money wants to be right now. People have to dig down deeper and deeper now. Before, you were always saved by the rising market. Now that’s no longer true. You have to really dig deep into your knowledge base to come up with the right decision.
Z: So there are no disadvantages at all to being an independent company?
Charley: In this type of economic environment we really believe this is the right model. You can get diluted in your focus when you’re national, when you have a lot of offices right now. It’s critical to get your focus really high in these economic times.
Chris: There is only so much talent. There’s only one Elana (Spector) and one Mike, etc., and when you put them in different offices, you lose something. C.A.
Jameson has seen many changes in the last coupe of years. The new Jameson partnership was formed on August 1, 2008. Since then, the following changes have taken place:
• Sales volume is up 67%
• Number of transactions has increased 113%
• Number of agents is up 300%