Atlanta-based Metro Brokers Inc. announced today that the company is affiliating with Better Homes and Gardens Real Estate LLC, more than doubling the size of Realogy Corp.’s 17-month-old franchise.
Metro Brokers — which had been affiliated with GMAC Real Estate since 2001 — claims 2,300 agents in 28 office locations and $1.1 billion in closed sales in 2008.
Although Metro Brokers’ franchise agreement with GMAC Real Estate wasn’t scheduled to expire until 2014, the companies had a falling out this year after Metro Brokers allegedly stopped paying its franchise fees. Although the dispute ended up in court, it’s not viewed as an obstacle to Metro Brokers’ affiliation with Realogy Corp.’s Better Homes and Gardens Real Estate.
The 30-year-old Georgia company becomes the 10th brokerage to affiliate with Better Homes and Gardens Real Estate, which now boasts 4,200 sales associates in 14 states: California, Florida, Georgia, Illinois, Kentucky, Pennsylvania, Maine, Massachusetts, New Hampshire, New Jersey, New York, Tennessee, Vermont and Washington.
Sherry Chris, president and chief executive officer of Better Homes and Gardens Real Estate LLC, called the deal "exciting and significant" — not only because of Metro Brokers’ size, but because the company and its top executive, Kevin Levent, are "culturally such a good fit for the brand."
Chris said Levent and Metro Brokers share her vision of what a "next generation brokerage" should be, which includes making the most of technology and Web tools.
Levent, who has led Metro Brokers since 1996, will continue as president and chief executive officer, the companies said.
"We are very proud to be at the helm with Sherry, steering her ship to become the preeminent brand in real estate," Levent said.
The agreement with Metro Brokers was characterized as "long term," but no details were disclosed.
It’s one of the biggest rebrandings in recent years — Metro Brokers claims to be the largest residential real estate firm in Georgia, by agent count — and the process of establishing a new brand is not a trivial one, Levent acknowledged.
Metro Brokers has new business cards for agents and other marketing materials including thousands of new yard signs with Better Homes and Gardens Real Estate branding ready to go today, he said. …CONTINUED
The company must also change signage on more than two dozen offices, and redo four electronic billboards around Atlanta — a crane is scheduled to arrive at noon to tackle the first billboard today, Levent said.
"We think it’s a great consumer name that extends far past the world of real estate," Levent said of the Better Homes and Gardens brand. The brand "is already established in households across America," he said, and "consumers will want to do business with us just because of what we stand for."
Levent said having ties to Realogy — which also owns the Century 21, Coldwell Banker and ERA franchise brands — will also give the brokerage better national and international exposure.
Metro Brokers’ commercial real estate division has become part of Realogy’s Coldwell Banker Commercial franchise network, according to an announcement on the company’s Web site.
Chris said that Better Homes and Gardens Real Estate has experienced "100 percent retention" of agents at the brokerages it’s signed up in the past, and is confident that will be the case with Metro Brokers.
"There’s nothing more important than the transition itself," Chris said. "What you want to make sure of is on announcement day is that every single agent walks out happy, excited, and ready to face the challenges of the real estate business right now."
Although Metro Brokers previously operated under the Better Homes and Gardens name from 1996 to 2001, the Realogy franchise it’s partnering with today is a new, unrelated company.
Realogy launched Better Homes and Gardens Real Estate LLC in July 2008 after licensing the Better Homes and Gardens brand name from magazine, book and Internet publisher Meredith Corp.
Meredith Corp. operated a real estate franchise network under the Better Homes and Gardens name from 1978-98. When Meredith sold the franchise network to GMAC Real Estate, it kept the rights to the Better Homes and Gardens brand, later licensing it to Realogy.
Metro Brokers, which affiliated with Meredith Corp.’s Better Homes and Gardens in 1996, continued operating under the Better Homes name until 2001, when it rebranded as GMAC Real Estate.
Signs that the affiliation of Metro Brokers with GMAC Real Estate was crumbling emerged this year — a year after Metro Brokers allegedly stopped paying its franchise fees.
Metro Brokers put GMAC Real Estate on notice Oct. 1 that it intended to end its franchise agreement with the company, proposing a Jan. 16, 2010, termination date to allow it to "exit the relationship in a businesslike manner." …CONTINUED
GMAC Real Estate then declared the franchise agreement terminated as of Oct. 13, and sued Metro Brokers, claiming it was owed nearly $350,000 in unpaid fees and other losses on a 10-year franchise agreement. The lawsuit also sought to stop Metro Brokers from using the GMAC Real Estate service mark and trademarks (see story).
With Metro Brokers rebranding as Better Homes and Gardens, the legal dispute over its use of GMAC Real Estate’s trademarks appears to be moot.
A federal district court has rejected GMAC Real Estate’s attempts to obtain a temporary restraining order and injunction against Metro Brokers over its use of the GMAC name, which was still displayed prominently on the company’s Web site until this morning.
The dispute over franchise fees has been submitted for arbitration, as stipulated in the franchise agreement between the two companies, said Gary Freed, an attorney representing Metro Brokers.
GMAC Real Estate had been selling off company-owned brokerages and making its own plans to rebrand, since the company was acquired last year by Brookfield Residential Property Services, a division of Canadian-based Brookfield Asset Management Inc.
Last month GMAC Real Estate announced a merger with Columbus, Ohio-based Real Living, in which the two companies will operate under the Real Living name under parent company Brookfield Residential Property Services (see story).
Levent, who had served as a member of GMAC Real Estate’s brand committee, said Metro Brokers’ negotiations with Better Homes and Gardens Real Estate were under way long before the Real Living merger was announced.
"This is not something that we embarked on as a last resort" to changes in the works at GMAC Real Estate, Levent said. "This took a long time to think about and structure so it might work."
Chris confirmed that discussions between the two companies began "several months ago," and that the reason for aligning was the good cultural fit between the companies.
Asked if Better Homes and Gardens Real Estate would look for opportunities to sign other GMAC Real Estate franchises, Chris said she continues to look for opportunities "to partner with and affiliate with medium- to large-size companies that are unaffiliated or have reached the end of their current franchise agreement."
GMAC has said Metro Brokers was the company’s fifth-largest franchise in terms of gross commission income.
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