By Maria Patterson
For Chuck Scoble, founder and CEO of Avalar Real Estate & Mortgage, attracting brokers and agents to his budding real estate franchise is a matter of giving them what they want-a plan for increased income, the support of a parent company, and a chance to run the business the way they see fit.
The Las Vegas-based Avalar almost makes it look easy. Hitting the market with a model that combines a residual revenue-sharing program with a flexible, non-bureaucratic parent company, Avalar is attracting franchisees by bucking the traditional franchise approach. With 128 offices already in place around the United States, Avalar has a goal of 200 offices by year's end, and believes it has the right business plan in place to get there.
"I think most agents and brokers are looking for something a little bit different and brokers are looking for a system to grow to become more profitable," says Scoble. "Many of our brokers have been with a national brand before so they've experienced that aspect of the franchise business. A great brand does not make a great broker."
While real estate has always preached the importance of recruiting and retention, Scoble believes that there has never been a true, organized system in place for brokers to follow. Making recruiting and retention central to the company's business model, Scoble believes he has filled that void with its patented recruiting plan, the Avalar Path to Success®. With an opportunity to increase income by sponsoring other agents into the company and thereby participate in revenue sharing, agents are incentivized to join Avalar brokerages…and stay for the long-run.
The seeds for Avalar's Path to Success revenue-sharing model were planted in 1990 when Scoble launched his own real estate company in Sonoma County, California, and then acquired four more offices shortly thereafter. Building a sales force became an obvious priority.
"I was interested in building my sales force and the best way to do that was to reward people for helping to build the team by bringing people into the company," Scoble explains. "Usually real estate industry people get a license and become independent to a fault. Most times, the connectivity between salespeople gets lost. Our model creates a real nice interdependence between agents and sponsors. The more experienced salesperson can now have a vested interest in the people they sponsor."
The Avalar revenue-sharing program is different than other residual programs. Scoble stresses that the Avalar model is not a profit-sharing model but a straight revenue share based on gross commissions and gross transactions. When an Avalar employee sponsors a new person into the Avalar system, he or she will then share in a portion of the royalty fee that is paid based upon gross commission income. What's more, the revenue-sharing program is not just for agents, but for all staffers and employees within an Avalar office, whether they're full time or part time.
Understandably, the opportunity to increase income through this residual program is attractive to today's agents, especially in a tougher real estate market. "Agents are pretty business savvy and they are seeing Avalar as one of the true programs where they can earn more through revenue sharing," says Scoble. "They have an opportunity to earn as much residual income as they want."
"Agents want to feel like a valuable member of the team," agrees Jason Lawrence, Avalar's director of franchise sales for the Southeastern region. "Our program elevates them to a position to feel like a partner in the firm when they bring other successful agents in to help them grow the company. And as the company grows, they'll get more income. They're contributing to the company's growth."
The Avalar model is also different from other franchise models in that there is no fixed commission split. "We don't have a corporately mandated commission split, like some companies that have a 70/30 rule," explains Lawrence. "Our approach is that every marketplace is different. If we said you had to be a 70/30 company, it could be too generous or not generous enough depending on the marketplace."
The Independent Advantage
In addition to the revenue-sharing program, many brokers and agents gravitate to Avalar over a brand-name franchise for another key reason as well: flexibility.
"The appeal of the program for people who have been around the block in this business, is that they like the idea of a franchise, but they don't want micromanagement and corporate guidelines," says Lawrence. "The Avalar business model gives them complete flexibility to operate the brokerage under their own local market guidelines."
Avalar franchises are not required to adopt the company's brand name. "Brokers who have an existing identity can retain that identity," says Scoble.
Michael Brown, for example, had been an independent broker for 24 years prior to joining Avalar in March of 2005. Based in Austin, Texas, with five offices, Brown recently opened an office in the Dallas area, is eyeing locations in Houston and is purchasing the entire Texas region in order to create "Avalar Lonestar."
"I had looked at a number of brands over the years," says Brown, "But when my wife and I got into our early 50s, we decided to get into a franchise to create a legacy for our kids. We began looking at different brands and then a friend introduced us to Avalar and we joined immediately."
According to Brown, while Avalar's revenue-sharing program played a key role in his decision, the business model also offered him the chance to operate an office that was "independent with no constraints," he explains.
"Chuck has an entrepreneurial spirit and he's allowing brokers to do the same thing," Brown explains.
"At Avalar, agents can work for a broker and have all the benefits that they'd get from a traditional franchise, but they have the flexibility of not working for a corporate entity where the broker is a puppet for the corporation," says Lawrence. "Avalar is a business model, not a brand model."
On the Growth Front
Looking ahead, Scoble is investigating awarding master licenses to foreign countries. He is, in fact, currently in negotiations with several Central American companies. "We are customizing the entire program to fit that market," he explains.
Ultimately, the biggest advantage of the Avalar business model is that it builds relationships. "We are allowing employees to build their own residual income-we do it in a person-to-person and employee-to-employee way."
Sidebar: Training and Technology
At press time, Avalar was preparing to roll out the "Avalar Career Center," a 24/7 on-demand training and education system. This online mentoring system will provide Avalar agents with access to teleseminars, downloadable marketing materials, continuing education and "anything you can think of from cradle to grave," says Jason Lawrence, director of regional sales for the Southeastern region.
With over 300 hours of online courses, the Career Center is the next step in Avalar's technological journey. Over the past two years, the company has overhauled its Web site and added an intranet where all agents have 24/7 access to their revenue-sharing numbers.
"We are creating lead-generation, marketing and professional development tools that are very specifically designed for the agent," says Lawrence.
The many features of the Avalar Career Center include:
-Individual Web-based business-planning tool
-Weekly marketing to-do lists and accountability tracking
-Over 100 hours of skills-based classes
-Online real estate mentoring library
-Access to over 1,000 online licensing and continuing education classes
-Access to a wide range of industry designations such as: ABR, ASR, C-CREC, etc.
– Special reports covering such topics as: customer acquisition, profitability, bundled services, business planning, technology, etc.
-Web-based business planning tools
-Over 20 different skills based on recruiting, sales meetings, retention, etc.
The Career Center will also include:
-Daily industry news
-A 2,500-term online real estate dictionary