Why some teams are leaving the franchise model behind 

Three large teams — including a four-office REMAX operation in Arkansas and a multi-market team serving several Southeast states — have moved their agents from traditional franchise brokerages to LPT Realty, the company announced this week, highlighting a growing frustration with the franchise business model and the accelerating shift toward "single-entity" national models like those offered by LPT, The Real Brokerage and eXp.

Team leaders told Real Estate News they faced a common set of pressures under traditional franchise firms, including internal politics, inconsistent rules and economics across markets, and growing concerns that top-producing agents would leave for platforms that make it easier to expand, recruit and build wealth over time.

Hitting the limits of franchise fragmentation

Jeremy Wilson, co-founder of the Charleston, South Carolina-based ChuckTown Homes, said his team spent two decades building its business — including surviving the 2008 downturn — while experimenting with different brokerage models. After starting at Keller Williams, Wilson and his partner left to operate independently for roughly a decade, then settled with the Keller Williams Expansion Network as they began pushing into other Southeastern markets, including Savannah, Charlotte and Jacksonville.

But the realities of the franchise model — where each office is independently owned and operated, and has its own cap structure, fees, leadership priorities and internal politics — began to collide with the team's growth goals. Operating across multiple cities meant Wilson's organization had to navigate multiple office rules and "systems," and he was also starting to hear whispers about Keller Williams raising team and agent caps. 

"In the franchise model, everything is territorial," Wilson said. "If the ownership mindset in a market wasn't welcoming to a team like ours, then we simply couldn't go there — unless we opened another brick-and-mortar office ourselves, which wasn't realistic."

That dynamic made expansion unpredictable and sometimes contentious, Wilson said, particularly as his team grew larger and more productive. In markets with only one franchise office, he said, growth could hinge less on consumer demand or team performance and more on whether local ownership viewed the team as an asset — or a threat.

ChuckTown Homes completed its transition to LPT Realty in January, Wilson said.

Christie Cannon, founder of The Cannon Team in Texas, also recently moved from KW to LPT Realty as her roughly 100-agent team looks to scale. "What works when a team is just getting started doesn't always work the same way as it grows," she told Real Estate News in an email — a reassessment that she believes is driving broader shifts across the industry.

A model that hasn't adapted to the times

Brokerage leader Keith Pike — who owned and operated four REMAX offices in central Arkansas before moving to LPT — said he experienced similar pressures and came to believe the franchise model no longer aligned with how agents and teams operate today. 

Pike said franchise brokerages were designed for a different era, when people were less mobile, when business was more localized, and when operating across markets — particularly across state lines — was far less common. Today, he said, business isn't constrained by geography, and it's not unusual for agents to be licensed in multiple states — a shift Pike views as central to both his own growth and the broader direction of the industry.

"Under the traditional models, the only way that any of my agents could ever be me was to leave me," Pike told Real Estate News. "If they wanted to build something bigger, they had to go open a competing brokerage" — a dynamic with real implications for retention. 

Pike has 14 agents licensed in multiple states, many of whom want a seamless experience with consistent fees and compensation, and without the territorial issues common in franchise systems. 

After raising concerns about those constraints with REMAX leadership, Pike concluded the company was not inclined to change a decades-old model. At that point, he said, it became clear it was time to move on. 

Why teams are winning the growth conversation

LPT Realty CEO Robert Palmer said the franchise model has an "inherent problem" in that it is built around territories and ownership structures that may not reward performance or innovation.

"It's not a meritocracy," Palmer said. "It's who bought that territory, whenever they bought it."

Palmer argues that teams, rather than traditional franchise brokerages, are increasingly becoming the core operating unit in residential real estate. In his view, teams are naturally "merit-based" and must consistently deliver value to agents, or risk being outpaced by stronger competitors.

Over the next decade, Palmer believes teams will increasingly "replace" the local franchise entity, providing their own training, culture and hands-on support in local markets, while being supported by national platforms that offer the infrastructure needed to scale.

"It's really hard to build something large inside a local franchise construct," Palmer said. Many of the leaders who join LPT do so because they have outgrown what a local franchise office can realistically support, he added. "Teams that want to think bigger eventually need a platform that isn't limited by geography."

Palmer said LPT has challenged team leaders to do just that — "think bigger" — and he has a goal of producing the industry's first "1,000-agent team" within the LPT ecosystem.

As LPT grows, the company is also preparing for a potential initial public offering. Palmer declined to comment on timing or additional details, saying the company is in a period when it cannot discuss those plans publicly.