Engel & Völkers Licence Partner Regional Office Belgium > Blog > Advantages and disadvantages of a real estate franchise in Belgium

Advantages and disadvantages of a real estate franchise in Belgium

Whether it’s major real estate brands or entrepreneurs looking to get into the profession, franchising is on the rise in Belgium. And for good reason! The franchising model has proven successful in generating positive results and higher levels of performance compared to solo entrepreneurs. The combination of the franchisor’s expertise and the entrepreneurial spirit of the franchisee allow for rapid growth, but without losing simplicity or savings in terms of its structure compared to individual agencies. It is therefore a model that can be very advantageous to those who are looking to establish their own real estate agency, but don’t want to start from the ground up. But is it an option for you? To help you decide, here are the advantages and disadvantages of franchising.

Advantages and disadvantages of the Belgian franchise system

One of the main advantages of franchising has already been stated above: franchising offers a better chance for success compared to individual real estate agencies in Belgium. Another great advantage of franchising is the marketing power it brings. The franchisee benefits from the brand recognition of the franchise while the franchisor is able expand its brand into new areas. The sharing of expertise also makes it possible to keep up with the latest developments in the Belgian market.

However, these advantages come with disadvantages as well. Both parties in the contract must respect the franchise contract and its obligations. The franchisee, for example, must respect the standards put in place by the franchisor, while the franchisor must ensure the sustainability of the business while continuing to develop its concept.

Avantages and disadvantages for the Belgian franchisee

Certain avantages of franchising have already been mentioned above. Franchising is a model that helps ensure a real estate agency’s success, and the franchisee can typically achieve a higher level of profitability on their investment. This is due, in part, to the competitive avantages that the franchisee possesses. From the beginning, their startup is more secure. In addition, they can leverage the brand in addition to the franchisor’s expertise via initial and ongoing training, for example.

The biggest disadvantage for the franchisee is the significant investment of launching the business compared with a non-franchised business. In addition, the franchisee must respect the standards and rules put in place by the franchisor, especially with respect to the selling concept. Finally, as a franchisee, you will belong to a network of franchises, which means that you will have fellow franchisees in other parts of Belgium who can negatively affect the growth or the quality of the franchise. But these problems can be easily mitigated if the franchisor is selective in their recruiting.

Avantages and disadvantages for franchisors in Belgium

The franchising model is equally attractive for large Belgian real estate brands, which explains why they are choosing this model more and more. With franchises, the franchisor has a way to more quickly expand their network with fewer costs. Through this expansion, they can boost their brand and increase customer loyalty as well as their brand recognition and marketing power. Lastly, the franchisor can expand into parts of the country where they haven’t had a presence before, and with fewer managerial pressures since the franchisee manages the business him or herself.

Disadvantages for the franchisor, as for the franchisee, are fewer in number compared to the advantages. The franchisor is taking a risk with respect to the use of the brand by a third party. He or she also loses control over a portion of their Belgian territory.

Becoming a real estate franchisee

So, there you have the various advantages and disadvantages of the franchising system, both for the franchisee as well as for the franchisor. This model has proven to be effective, especially for those who are looking to establish themselves in the real estate profession without a lot of experience. Do the advantages appeal to you while the disadvantages aren’t as important? If so, nothing is stopping you, so get started with a franchise, and make your dreams of having a real estate agency come true!

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Engel & Völkers
Licence Partner Regional Office Belgium

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