Berkshire Hathaway HomeServices Franchise Conversion to an Iconic Brand
In October 2012, HomeServices of America, Inc. (a Berkshire Hathaway affiliate) and Brookfield Asset Management announced a partnership involving the purchase of Prudential Real Estate. The acquisition agreement limited the duration of Prudential Real Estate brand usage to five years, necessitating the creation of a new franchise brand called Berkshire Hathaway HomeServices (BHHS). The organization would be the first consumer-facing brand entrusted to use the world-renowned Berkshire Hathaway name. To maintain the equity of the acquired Prudential assets, more than 400 existing Prudential Real Estate franchisees needed to buy into the new brand by signing new franchise agreements.
Agreements had to be quickly negotiated and signed with hundreds of franchises, representing more than 50,000 independent agents. Previously, new affiliate on-boarding involved 20 to 30 new franchises per year, but a far more efficient process would be required to establish the strength and credibility of the new brand and to meet the deal requirements on eradication of the Prudential Real Estate name. In fact, while the majority of the existing franchisees had to be transitioned within 24 months, the largest and most complex conversions had to happen within six months. All told, the scope of the transition required was unprecedented.
To meet this immense challenge, we created and executed a project plan that proved to be the cornerstone of the conversion process. Our work also included development of the transition strategy and project design to accommodate the decentralized structure implicit in a franchise network. From there, we designed and managed a centralized portal that would lead franchisees through the conversion process across major assets. The portal also gave corporate management precise control over cost, quality, and brand compliance.
Our strategy successfully secured buy-in from top franchisees whose support was critical to establishing credibility and gaining momentum. Within the first six months, we were on track to successfully convert two-thirds of the top 75 franchisees (representing some 70% of total franchisee revenue). All remaining conversions were expected to be complete within the prescribed time frame. The quality of the brand conversion execution also helped to cultivate a new and cohesive corporate culture.
“We were converting more affiliates in the first four months than we would normally onboard in two years—and that pace was only going to escalate. This required that we let go of a business-as-usual mind-set. By late March, the network had more than 27,000 agents and almost 700 offices in 33 states—exceeding our retention and revenue goals. While results like those are important, the ultimate value lay in the long-term, fruitful relationships with affiliates that a well-executed brand rollout brings.”— Senior Vice President Network Services, HSF Affiliates