CENTURY 21's FRANCHISEE PUSH Chain campaigns to sign local firms

July 04, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

When James Ford and his wife, Traci, decided to sell their brick duplex on one-tenth acre in the Fullerton section of Baltimore County, it was natural they would turn to a neighborhood firm named Kayhouse Realty. After all, Mr. Ford grew up along the Belair Road corridor where Kayhouse is practically a household name.

Now -- even though the 30-year-old Kayhouse has linked itself with Century 21 of Irvine, Calif. -- the Fords are remaining loyal. The same Kayhouse agent who sold their $86,000 duplex will soon take them to the closing table on their next home, a $122,000 colonial with a pool in White Marsh.

"Kayhouse knows the local market. It really doesn't make any difference to us that they're going with Century 21," said Mr. Ford, a 23-year-old draftsman.

The giant Century 21 chain is counting on the loyalties of families such as the Fords to firms such as Kayhouse as they make a major push to gain market share in the Baltimore area.

"Baltimore is one of the top 12 hot areas in the United States for us," said Richard Loughlin, chief executive of Century 21 International. Intensified competition among real estate brokerages in Baltimore has made small independent companies more vulnerable to appeals that they join the big franchise network, he said.

Within the past year alone, Century 21 has converted nine locally owned companies like Kayhouse into franchisees -- increasing its Baltimore-area presence to 32 offices. And by 1995 it hopes to have at least 55 offices in the area, said Rick DelSontro, marketing director for the Century 21 mid-Atlantic states divisional office in McLean, Va.

'Forgotten stepchild'

"For a while, Baltimore was almost a forgotten stepchild in the region. There was so much business in the Washington area," Mr. DelSontro said, admitting that recruitment in the Baltimore area did not receive the attention it deserved in past years because the Washington area was so lucrative for Century 21.

A new push for quality control -- which means that poor performers in the Century 21 chain have been kicked out -- have convinced more successful companies such as Kayhouse to sign on as franchises, Mr. DelSontro said.

An aggressive drive in the field to find Century 21 converts also has been effective.

The drive in the Baltimore area, which began late last year, is possible because a recent Century 21 reorganization moved more people into the field, where they could search for converts, company officials say.

"We wanted to get our leadership closer to the customers," said Mr. Loughlin, whose franchise organization now includes 6,000 offices in the United States, plus franchisees in France, Japan, Australia, Canada and Mexico.

Gold-colored blazers

Fiercely independent yet desirous of the national advertising exposure and referral network that comes with the Century 21 name, Kayhouse co-owner George Schiaffino recently flew to the chain's California headquarters, where Century 21 officials still wear the gold-colored blazers seen on the chain's television commercials. There he signed the papers officially making Kayhouse a Century 21 office on July 1.

"We have strong locals in the Baltimore area and they're spending mega-dollars to get market share," said Mr. Schiaffino. He contends that Timonium-based O'Conor, Piper & Flynn, as well as Long & Foster of Fairfax, Va., are the most formidable rivals he faces in his Northeast Baltimore County markets, where Kayhouse hopes to push its market share from 10 percent to 12 percent in the near future.

Affiliating with Century 21 could help Kayhouse fight off turf challenges from regional firms, allowing it to gain customers in such Belair Road communities as Fullerton, Rosedale and Parkville, where small, well-kept brick Cape Cods and colonials are particularly attractive to first-time buyers.

"I think there's always a segment of the population that recognizes a name like Century 21," said Irene Boulden, a co-owner and office manager of Kayhouse. Not only will sellers and buyers be attracted to the Century 21 name, she said, but Kayhouse should be able to build its agent base, which now stands at 60.

Rising costs, competition

Several forces in the real estate industry are threatening small independents like Kayhouse -- pushing them either into mergers with regionally based chains or into franchise arrangements with national chains such as Century 21, ERA, RE/MAX and Prudential, industry analysts say.

Rising advertising costs and stiffer competition for productive agents have made it increasingly difficult for small players to compete unless they hitch to a larger wagon, said Peter G. Miller, the Silver Spring-based author of "Inside the Real Estate Deal," a HarperCollins book about the workings of the real estate industry.

"In the past several years, real estate transactions have become more complex. And there is a trend in the industry to create larger offices -- with a greater variety of services," Mr. Miller said.

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