A Dec. 12 Washington Business article incorrectly used the terms "franchisees" and "franchise holders" to refer to real estate agencies associated with, but not owned by, Sotheby's International Realty before Cendant Corp. bought it in February 2004. They were "marketing affiliates." (Published 12/14/2005)
Washington Fine Properties LLC lists some of the area's toniest homes. Its current properties include the Kennedy family's Hickory Hill estate in McLean, for example. But after six years as a Sotheby's International Realty affiliate, it's no longer using that luxury brand.
"We chose to sever the tie. It wasn't for us anymore," said Dana E. Landry, principal broker in the District-based brokerage.
"What brought the value of Sotheby's was the affiliate network they created," said partner Thomas B. Anderson. "It was exclusive. Now it's not."
There's been an exodus of longtime franchisees since the Sotheby's auction house sold its luxury real estate brand in February 2004 for $100 million-plus to franchise giant Cendant Corp., owner of the Century 21, Coldwell Banker and ERA brands.
Franchise holders that departed said they were unhappy with Cendant's approach -- including what some describe as a tenfold increase in licensing fees and the likelihood that Sotheby's yard signs will more often go on any property a franchisee lists, not just luxury homes.
"Over time, it will mean a diminution in the meaning of Sotheby's," real estate consultant Steve Murray said. "It's as if Tiffany's allowed all kinds of retailers of jewelry to use their name. But it will take a long time to happen."
Brokers at Tutt, Taylor & Rankin Real Estate LLC, though, say they're "thrilled and honored" to be the new affiliate in the District and close-in suburbs, effective Jan. 1.
Principal broker Michael Rankin said there's no question that the Sotheby's brand is solid and that the opportunity is ripe to gain prestigious listings. "We would expect our sales in the first year to be increased by at least 50 percent," Rankin said. Sales for 2005 were "just short of $500 million."
Rankin said Sotheby's remains picky, requiring its affiliates to clear "numerous hurdles." And his company had to beat out others for the local franchise. It helps that the District-based firm has impressive credentials in the luxury world. Founder J. Wallace Tutt redid Florida mansions for Gianni Versace and Cher, specializes in Miami Beach luxury projects and sometimes offers his island in the Bahamas to Robert De Niro.
Under Cendant, Sotheby's International Realty is committed to its "new business model," said Michael R. Good, president and chief executive. And he said that doesn't mean abandoning its luxury reputation. "Mercedes-Benz doesn't just sell $250,000 cars or $100,000 cars," he said. "You can get Mercedes-Benz in a C-class, you know."
-- Sandra Fleishman