Twenty-two real estate firms in nearby Maryland and Northern Virginia have signed contracts with the Red Carpet Corp. of America and eight more are in the final stages of discussion for affiliation with the national real estate chain, a spokesman announced.
David Hutton, eastern divisional marketing director for Red Carpet, said that 11 of the firms have authorized the release of their names but that the others are awaiting the planned formal opening of Red Carpet service. He said the formal opening is likely this summer after the goal of 50 firms are signed is reached for the start-up.
Already three other franchising operations are under way in this area. The Century 21 operation was begun several years ago and now includes some 2,600 offices in the U.S. and Canada. ERA (Electronics Realty Associates) and Realty Word began operations here recently.
The franchising movement, which generally tends to affiliate smaller real estate brokerage firms (competing against big firms with many offices in an area), began on the West Coast. Red Carpet was the first to become a giant. It now has more than 700 franchised offices coast-to-coast.
The announced list of offices planning to go Red Carpet here include Medallion Real Estate, Gaithersburg Realty, Rozier Realty, Court Square Realtors and Andrews Realty in Maryland and Market Homes Realty, Allen & Marcey Realty, Sentry Realty, Woodward Real Estate, Landmark Realty and Homes & Acreage in Virginia.
The franchisor usually furnishes a package of aids to to firms that pay an initial fee to sign up and then pay an ongoing percentage of total earned commissions. For this the real estate firm receives training programs for its personnel, management counsel, aid in recruitment of personnel, signs and other materials.
The franchisor fee to affiliate 70 per cent returned in services and materials, Hutton said. Then the ongoing fee is 6 per cent of all commissions earned on transactions by member brokers.
The Red Carpet office is in Rockville and Hutton has had Gary R. Biles representing the franchisor in seeking affiliating brokers in this area for several months.