Property Manager

Should You Invest in a Property Management Franchise?

9 views March 13, 2023 March 13, 2023 Justin Stowe 0

One of the best ways to build a successful career in the property rental industry is with a property management franchise. Management franchises provide you with everything you need to get started without going through the daunting set-up process yourself. Additionally, you receive expert training, a tried and tested business model, customized software, plus expert support and advice from the franchisor. All you need is to put in an initial investment.

Even though a property management franchise won’t give you complete autonomy compared to running a management outfit of your own, many will argue that the benefits outweigh the cons.

Below, we have listed the pros and cons of a property management franchise. After reading through each item, we’ll leave it up to you to decide what is the best fit for the goals you’re aiming for in your property management business.

Pros of a Property Management Franchise


Companies like McDonald’s are still around, making huge profits because they assure customers they’ll always get a consistent experience wherever they are. So a burger at a restaurant in Georgia will taste the same as one in Washington.

Having a strong brand isn’t always necessary, but it certainly doesn’t hurt. This is especially true if you’re targeting to manage commercial real estate, condos, and apartment complexes rather than just a few residential properties.


Even if you have some experience as a property manager, a little extra training will always be good in case you have plans for future expansion. In addition, buying into a property management company franchise will give you access to some of the best training resources in the industry (assuming it’s a good company!).

Business Support and Systems

Entrepreneurs have to wear all kinds of hats. This is especially true in the property management industry, as one can quickly go from the mundane task of helping a tenant with issues around the home to researching more critical matters such as local rental laws and policies.

Running your property management operations under a franchise not only helps with your day-to-day operations but also with financial and legal concerns and other industry-related matters of which you may need to be made aware. And even if the franchisor isn’t able to offer the exact answers you’re looking for, they will always help you work through management issues that will occasionally arise.


When you’re first starting out, the most important thing to focus on is marketing. If potential customers don’t know you exist, how are you ever going to succeed? Getting the word out isn’t easy though, especially if you’re relatively new to the industry and don’t have an extensive network yet.

That’s where the franchise can come in. Carrying a respected brand itself already does half the work. Besides just instantly giving you access to a large network, they will also show you how and where to market your services. In other words, they take out a lot of the guesswork and will sometimes even do the marketing for you.

property management franchise

Cons of a Property Management Franchise

Upfront Cost

The biggest hurdle for most potential franchise owners is the upfront cost. Regardless of which company you choose to work with, you can expect to pay at least $100,000 in initial fees and costs. That doesn’t even include the $75,000 liquid cash requirement you’re expected to have to carry you through the startup period.


Franchise costs don’t just stop with the upfront fees. You also need to be prepared for the regular royalty fees charged for being able to use their name, training, software, etc.

What kind of numbers can you expect? Seven percent is currently the market rate in the industry. So when you include that 7% fee on top of various other business expenses, you can see that “fat wallet” starting to look a little slimmer.

Limited Flexibility

This depends on the company, but in general you can count on having a limited number of ways to run your business. Your franchiser wants to look good and maintain a certain reputation, and they can only do that if they control what their franchisees do.

Of course this was also referenced in the “pros” category, as some entrepreneurs like the idea of not having to worry about how they’ll go about their operations. Franchisors already have their best practices laid out. But if you want to have the freedom to make your own rules  or if your local market needs don’t align with the franchisor’s procedures, a franchise won’t give you that much flexibility.

False Expectations

You’ll often hear that it’s much less risky to open up a franchise vs. starting your own business from scratch. But while that may be true, it can lead to a false sense of security.

At the end of the day, there’s no guarantee that you’ll succeed. Running a franchise is hard work, and there’s a good chance you’ll fail if you don’t market yourself well, take care of your customers and tenants, control costs, etc.

The Bottom Line

So is a property management franchise worth the investment? There’s no right or wrong answer here—it all depends on your business needs and personal preference.

Property management companies have been started from scratch with zero upfront cash and gone on to be great successes. Others have gone the “guaranteed” franchise route with lots of cash in the bank and still failed.

You have to look at your own goals and determine what you want. You can either invest a lot of money in training and systems that hold your hand, or save the money and go solo.

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