When Steve Morris launched Exit in
During the past 10 years, this built-in income supplement and “retirement plan” has helped Exit grow to approximately 1,100 franchises, largely in the U.S. Below, founder and CEO Steve Morris explains why Exit’s initial expansion efforts have been more successful south of the border than in Canada, and what his expectations are for Exit’s renewed focus on Canada, in conversation with REM Senior Editor Kathy Bevan.
REM: Why have Exit signs appeared more extensively in the
Steve Morris: The reason is opportunity. Initially what we did was divide
We sold it for $50,000 a district – $25,000 down, $25,000 in two years. And we broke the cardinal rule of franchising – we reached into the marketplace and took the top-producing agents to buy those districts. Normally, you don’t do that because when the market comes back, they put their other hat back on and go back to selling houses. So you don’t usually see top-producing agents selling franchises in a good market. But the recession had just fried most brokers like chickens – there weren’t too many left to draw from who had money. The top producers could generate money, no matter what the market was like. And to a top producer making a quarter of a million, buying one of our districts was like paying your taxes. So it wasn’t such a downside risk to buy in.
Then, faster than we thought, we had a syndicate of snowbirds who looked over the fence and said they wanted
Things were happening very fast and the
It was a very lucrative thing for us to do – to spend a lot of time in the
REM: What was happening with Exit in
Morris: The snowbirds who wanted
To a great degree, the ones who had bought the franchises here (in
REM: How important is growth in
Morris: Absolutely important. The first objective in the
Then our objective is to open up the West this year. Our president in
Right now we have 56 offices and 1,000 agents in
REM: And just what does work when you’re pounding that pavement?
Morris: We have a team of people – including me – who deliver group presentations, called “60 Minutes with Exit”.
In the insurance business there was an agent out of
In the Re/Max organization, I’d done hundreds of presentations, but they were always one-on-one. But I began thinking about telling the sales story to a group. And there’s a rule of thumb in the real estate business: if you supply the food and drink, real estate agents will follow you anywhere. So we began putting on the presentation. We’d sit people down for an hour, provide a great spread of food, and do these presentations as often as five days a week in
I still do these presentations – I do 65 a year. I’ve also got six other people who do the same thing, right across the country, in
REM: Once you get someone interested, what “sells” them on Exit?
Morris: What’s been the blowtorch to really make this hot? We specialize in teaching, training and coaching. We do this through apprenticeship – a top performer is going to be teaching you, whatever it is that you’re about to learn. These are people who have done it, are doing it – you fly under the wing of a champion to access that “pass me down” wisdom.
When we put in our trainers, we say from an apprenticeship standpoint, if you’re not making more than $500,000 doing what you’re going to teach, I don’t want you teaching anybody anything. When you arrive, I want the people you’re teaching to know you’re a pro.
We teach everything from personality and temperament analysis to the art of negotiation, to canvassing on the telephone – our trainer works with you on the phones while you’re making a call. We door knock with them – we take them on buses and take them right to the door. The person walking up to the door with you is a champion doorknocker – they take you through that apprenticeship. We don’t send them out and tell them to do it – we take them there. All of the psychology necessary from the standpoint of selling is strategically organized and developed from a central location.
All our training is centralized – it’s all done here, out of
REM: You explained some of the initial thinking behind Exit in your first interview with REM, when you launched your company in the
Morris: I had worked in the life insurance business, which taught me about residuals. I fell in love with residuals; I just didn’t love the life insurance product.
So when I came into this business, the thing that’s glued me into this business and kept me here is the product. The value of the product, in the hands of the customers, is so substantial – and it’s a big product, for a big commission return on that product sold. That was very important to me – I had sold small products up to that point.
When I went into the real estate business in 1976, I started in Canada Permanent Trust Real Estate. Ten months later I was a manager; then top sales manager in
Then Re/Max came along. I was with Re/Max for 13 years, and really cut my teeth. Desk fees meant you paid for the privilege of earning top commission – I describe it as high school in the real estate business. Public school was the way it used to be, previous to desk fees. The impetus of desk fees was a very important thing – in fact, without Re/Max, Exit would not exist. I got the idea from the insurance business, but it was important to get into the thick of it with the better producers and a competitive situation.
Then the question became, was there any way of outflanking the desk fee concept? I figured the only way you could ever outflank Re/Max was if you had a company where you could make more than 100 per cent and not pay any desk fees. And of course that looked like a huge enigma.
That’s when I thought of insurance business residuals. I figured I was onto the biggest thing since sliced bread, but I didn’t have any money – just a great idea. This would be a very big, systemic change – literally the second paradigm in real estate. The first paradigm was “pay for the privilege” of earning a top commission – desk fees. The second paradigm: single level residuals, creating a future where there had never been a future before, for real estate agents and brokers.
REM: Your choice of the name Exit appeared to be a bit of an enigma in itself.
Morris: The name makes people recoil a bit the first time they see it, but ultimately, that’s been our finest asset, that name. Our competition looked at the word Exit and said, “Why in the world would you ever choose a name like that?” Our competition to this day is still looking at the name, because they don’t see it with the eyes of an advertiser. Exit means “safe passage” – when you sell your house and you leave, you’re making an exit. It’s the perfect use of a four-letter word! Our name has acted like a smokescreen for us. It has stymied the competition – they are still looking up at that sign, while we’re sneaking under the bridge.