I was approached by a friend to find a company or group of companies to generate real estate possibilities for Russian real estate investors outside of Russia. This initially implied also that they would be wealthy Russians. This search was to be done for a company called Geology in St. Petersburg Russia and the family of owners. The real estate company has the web URL of www.geo-estate.ru. This began my search for companies. I found one German and a few American companies that had a franchised office type approach to sharing real estate leads, clients and branding. I researched the various payments, fees and overall marketing approaches for each of these companies. I, however, kept coming back to one thought that would not go away. Why pay an American, or in one case a German company, a fee for a Russian to buy a house in Turkey?
I realized that it was the brand awareness crossing over borders that was what was being offered and for which a fee was to be paid. But was the fee, to be sent to Denver or New Jersey, really based upon a trust long established between say St. Petersburg and Antalya Turkey?
I began to realize it was a trust based upon dealings between say California and New Jersey USA and then just implied between Russia and Turkey as well. But was this again reason to want to send a good portion of the money to America for this implied trust?
I began to think not.
But then what was the alternative for the company in question? Create a brand of their own? I began to more and more think that this might be indeed a solution. But the obstacles of creating that web of brokerage offices and leads and brand recognition when they could just get it relatively easily by paying the $20,000 franchise fee and 6% or so annual royalty payments? Was that not easier?
How to make it easier I then pondered? Who would benefit if they were to create a new franchise team of offices? I noticed that the larger of the companies that offered franchises also relied upon regional offices to choose and administer the system. This was, I was sure, not done for free. Perhaps this system of regional administrators and offices could be a key to starting a new franchise system? After all what the original company that brought the question really wanted was still that system.
So I first thought to divide Russia into three regions. The original owners would keep one of the regions and then my idea was to essential just give the other two away at no up front cost to any company that the original owners might choose to work with. What the original company would bring is their current and ongoing success, a brand name to take to an international level, and the drive and desire to create an international system that worked. The other two regional established real estate companies would get from joining would be the ability to choose all those other franchise systems in their region as well as collecting a sizable majority of the initial upfront franchise fee to keep for themselves. Plus they would be directing all further regional advertising budgets and also collecting a good portion of the yearly franchise royalty payments from their region as well. This on top of continuing to run a real estate office or offices under the new national/international brand name. Thus they too would get the opportunity for using the international system of real estate listings and client referrals enjoyed by all franchise companies.
For the original real estate company, what this also meant is that for well over half of the Russian country, they would not have to be involved in the marketing of the brand or ongoing management of the regional issues. But they would be receiving portions of initial franchise fees and ongoing royalty and advertising fees. They would also control the important GeoEsta Data System that would be used to establish and maintain computer software and systems for the system wide use of the entire brand team. They would also direct and coordinate all international advertising and brand management. This would be done from the headquarters in St. Petersburg.
The cities of Anapa and Barnaul Russia were chosen as prospective regional cities for a few reasons. First they were on what I call the S7 flight map. I wanted all European cities to be on the S7 flight map. The cities are also, to be blunt, what I would consider to be 3rd tier cities. This was on purpose. They are vibrant, growing cities but perhaps feel in the shadow of neighbors such as Sochi or Novosibirsk. This again was on purpose to help make the point of what belonging to GeoEsta Real Estate could do for their companies and their cities.
Having established this method of rolling out the brand to other areas relying heavily upon regional offices while also granting them the vast amount of up front monies to be collected, it seemed only naturally to attempt to then use the same method to continue with expansion across Europe.
Thus the idea again of three regions, all in this case to be divided among newly chosen real estate companies or professionals.
Again, just as Anapa and Barnaul were chosen, so were Plovdiv, Bulgaria, Kaliningrad, Russia and Santa Cruz, Tenerife, Spain chosen. Again cities that would not perhaps spring to mind instantly as regional European headquarter cities. This is exactly why they were chosen. To become regional European headquarter cities. I believe that real estate companies in these respective cities would find the idea of being a regional administration company for a franchise real estate company that they belong too an enticing idea. And again they could enjoy a great amount of the upfront and ongoing fees associated with being regional administrators. And again they are all on the S7 flight map.
