Franchise affiliation has become common in the real estate brokerage industry. Department of Commerce estimates show that in 1981 about 30% of all real estate brokerage establishments were franchise affiliated. This paper develops and estimates a model of brokerage firm sales, using sample data collected in 1982 for three North Carolina cities. Controlling for the size and experience of the brokerage staff and the experience of the broker, the paper finds that franchise affiliation contributes to firm sales. Affiliation with a national franchise appears to be worth about $930,000 in additional sales to the average firm.
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Frew et al. (1986) studied this question.
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