Why Invest in a White-Collar Franchise Opportunity

Repeat Customers, Steady Revenue Stream and Professional Relationships are Among Numerous Advantages, Says Commission Express Founder

Relationships are key to success in life, business – and particularly in white-collar franchises that rely on longstanding affiliations with other professionals. John Stedman, co-founder and CEO of Commission Express, knows this very well. As the only franchised real estate commission advance company in the U.S., Commission Express has advanced more than $1 billion to real estate professionals since the company’s founding in 1992, he says, and 80% of those transactions are with repeat clients who use the company’s services an average of four to six times a year.

The Commission Express franchise model is based on a specialized form of invoice factoring (defined as the sale of receivable income to a third party). The franchise helps support real estate agents’ and brokers’ cash flow by purchasing their pending commissions at a discount prior to settlement.

Franchising since 1996 with locations across the country, Commission Express maintains long-term relationships with agents and brokers at some of the nation’s leading real estate firms. Those trusted relationships, as well as the longevity of Commission Express, have contributed to the brand’s success.

White-Collar Franchises Versus Other Business Models

Commission Express offers all the advantages of a white-collar franchise, as well as other benefits. For starters, Commission Express clients – state-licensed real estate agents and brokers – are established professionals who value long-term relationships built on trust and mutual respect. As with other white-collar businesses, interactions between franchise owners and clients typically are pragmatic and rational, which contributes to a positive working environment.

Real estate professionals who work with Commission Express earn an average $125,000 a year or more, and the average commission purchased by the company is $8,000, Stedman says.

While real estate experience is not necessary for Commission Express franchisees because training from the franchisor is comprehensive and support is ongoing, company officials prefer that they have “enough life experience to have good judgement,” Stedman says. Along with such life experience come skills such as leadership, management and communication, which are valuable in any white-collar business.

Quick Startup, Lower Costs

As opposed to business-to-consumer models, white-collar businesses don’t need commercial storefronts to attract a broad consumer base. Commission Express franchise owners can work from their homes (“white collars” not required!) or anywhere there’s an internet connection.

New franchise owners can be in business in as little as 14 days (with a month being more typical) from the time they express interest, review the franchise disclosure document (FDD) and go through training, National Manager Rachel Feghali says. Some new franchisees even purchase their first commissions while still in training. “We have real-time data here at the national franchise,” Stedman explains, “so if a deal comes in from North Carolina, for example, and we’re here training the new North Carolina franchise owner, we just bring that deal right over. Rachel underwrites with the new franchise owner and away we go.”

Because their focus is on cultivating long-term relationships within a specific, targeted client base and generating repeat business, white-collar businesses such as Commission Express typically don’t require expensive marketing or advertising to continually reach a broad base of new customers, as would be the case with B2C models. And, unlike other types of businesses, they don’t need inventory or storage for inventory, and they don’t have staffing expenses because they don’t need employees.

Established Client Base from Startup

Launching a business with an existing base of clients is an enviable advantage most entrepreneurs don’t have. But Commission Express is able to offer a ready-made client base to its franchise owners because of its longevity as a real estate advance company and the long-term relationships established with real estate professionals nationwide.

“We’ve been in business so long that it would be hard to find a market where we don’t already have some customers,” Stedman says. “So, when we sell a market, we give the franchise owner all the data on every customer that we’ve ever done business with in that market.”

Having an established client base from startup accelerates the timeline to profitability. “Once you have 50 clients in your database, you will do a deal every business day. That’s the tipping point for us because of the four to six times a year that they use us and the business resulting from their referrals to others,” Stedman says.

Continuous Demand

White-collar franchises typically see ongoing demand for the services they provide for other professionals. Commission Express is no different.

Although the real estate market may fluctuate with the season or economy, agents’ and brokers’ expenses remain constant, and so does their need for reliable cash flow. Demand for Commission Express services also is continuous, regardless of market conditions, Stedman says. When the market is hot, agents and brokers have to spend more on lead generation and marketing to compete with other real estate professionals all vying for buyers and listings. Housing inventory might be lower, too, contributing to longer periods between sales and commission payments. When the market slows down, properties take longer to sell and agents must spend more to entice buyers from a smaller pool and to showcase slow-moving properties.

Managing cash flow is crucial for long-term financial stability in the real estate industry, and it can be an ongoing challenge for agents and brokers. Such was the motivation for Stedman and his partner, formerly real estate brokers themselves, in founding the real estate commission advance company more than three decades ago. The Commission Express mission remains the same today: to empower real estate professionals by providing fast, reliable access to the income they’ve already earned.

To learn more about franchising opportunities, including several high-volume territories currently available, visit Commission Express.