Australian real estate agency design: strategies for the franchising business model
Creators: name: Chartres, Linda
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350405
subject: Sport and leisure management
classificationCode: 350704
subject: Entrepreneurship
classificationCode: 350705
subject: Innovation management

description: As a significant contributor to the modern Australian economy, the residential real estate agency industry contributes approximately A$9.9 billion in revenue and A$4.2 billion in wages thus underpinning the Australian residential real estate employment (IBISWorld 2015a). In addition, as a perpetually evolving and valuable investment asset class, residential real estate is regarded as a repository of wealth for millions of Australian households.<br><br>The need to service the growing demand for residential real estate as well as to achieve sustainability in the competitive agency environment, are regarded as the predominant drivers of the real estate market. As such the residential real estate market is highly conducive to an affiliation of independent real estate organisations with franchised organisations as franchised organisations are able to offer a myriad of benefits such as economies of scale (IBISWorld 2014, 2015b). Conversely and for this reason, franchising as a business format has been popular among a diverse range of industry sectors within the Australian economy.<br><br> Franchising within the real estate industry remains an under-researched field in Australia. Instead much of the research within the real estate franchising field conducted to date focuses on the intrinsic benefits of franchising with the researchers generally electing to use a pragmatic lens to explain the franchising phenomenon. As such the findings emanate from a specific perspective and concern relatively practical issues such as “encroachment, location and franchise fee policies, or more theoretical discourse on transaction cost analysis, ownership direction etc.” (Price 2000, pp. 52).<br><br>It is predominantly for this reason that this study’s focus is principally linked to researching the basis of franchising strategy beyond its practical layer. In doing so, the study is directed towards an analysis of operational strategy adopted by different real estate agency business models, franchised and non-franchised, found in operation throughout Australia. As such this research exposes prevalent key themes and factors underpinning the strategic choice of business modelling within the Australian residential real estate agency industry.<br><br>Additionally undertaking this study serves to add to a limited body of literature by investigating how many non-franchised real estate organisations gain competitive advantage through development of innovative business modelling in relation to positioning within the marketplace. The organisations adopting the innovative business modelling are thus seen as challenging the traditional franchise business model by way of posing the question whether the traditional franchise model has a boundless future as well as whether the franchising business model can be argued to be boundary-less.