Can a Counselor Realty franchisee face competition from Franchisor-owned outlets?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees or Franchisor-owned outlets, or from other channels of distribution. During the term of the Franchise Agreement, Counselor will not itself establish or operate a "Counselor" office, or license another to establish or operate a "Counselor" office within the Territory. However, both Counselor and other "Counselor" franchisees are free to enter into, and to provide residential and commercial real estate brokerage services within, your Territory, and you are free to provide real estate brokerage services in territories in which other franchisees' "Counselor" offices are located. Continuation of your rights in the Territory is contingent on your achieving and maintaining the minimum sales agent schedule agreed upon by you and Counselor, and on your payment of continuing agent fees based on that schedule. See Item 6. Counselor is engaged in the real estate brokerage business and reserves the right to establish and conduct this business at any location except as described above.
Source: Item 12 — TERRITORY (FDD pages 21–23)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, a franchisee may face competition from franchisor-owned outlets. Specifically, while Counselor Realty will not establish or operate a "Counselor" office, or license another to do so, within the franchisee's Territory during the Franchise Agreement term, both Counselor Realty and other franchisees are free to provide real estate brokerage services within the franchisee's Territory. Counselor Realty is engaged in the real estate brokerage business and reserves the right to establish and conduct this business at any location except as described above.
This means that while Counselor Realty agrees not to directly set up a competing office within the franchisee's designated territory, they can still operate and provide real estate services within that territory. This could occur through various channels or under different brands, potentially creating competition for the franchisee. Additionally, other Counselor Realty franchisees are also permitted to offer services within another franchisee's territory, further intensifying the competitive landscape.
This lack of an exclusive territory is a significant factor for prospective franchisees to consider. It means that success will depend heavily on the franchisee's ability to effectively market their services and build a strong customer base within their territory, despite potential competition from both the franchisor and other franchisees. Maintaining the agreed-upon minimum number of sales agents is crucial, as failure to do so could result in losing the right to operate exclusively in the territory or even alteration of the territory itself.