What are the primary reasons franchisees cite for closing their units ("ceased other" classification)? Are there common operational, financial, or market-related factors?
#1
Given that 2023 saw 19 closures and 2025 saw 19 closures compared to 13 in 2024, what changed operationally or in the marketplace between these periods?
#2
Your royalty rate of 4.0% is significantly below the typical 5.25-7.0% range. Is this rate permanent or introductory? Are there plans to increase it during renewal?
#3
The technology fee of $39.99 monthly is substantially below typical rates. What specific technology services and tools are included, and could this be increased in renewal?
#4
Your franchise fee of $18,000 is $2,000-$22,000 below the typical range for real estate services franchises. What is included in this fee compared to competitors, and is it adequate to cover your onboarding costs?
#5
Can you provide details on the single litigation case where Realty World was plaintiff? What was the outcome and does it reflect an ongoing issue with franchisees?
#6
Your contract lists 25 termination causes (above the typical 15-20 range). Can you explain which causes are most commonly exercised and under what circumstances?
#7
The renewal conditions specify that franchisees must "remodel and expand the business regardless of cost." How much investment is typically required, and are there alternatives if a franchisee cannot meet this requirement?
#8
With a non-exclusive territory and no encroachment protection, what prevents the franchisor from opening competing units nearby? How many franchisees have experienced this?
#9
The transfer fee of $3,500 is below typical rates. Does this fee cover the franchisor's administrative and training costs for transferring ownership?
#10
What percentage of franchisees renew their agreements at the 5-year mark? Is the $1,500 renewal fee the only cost, or are there additional remodeling/expansion costs?
#11
How many of the franchisees who closed their units in the past 3 years had been in the system for fewer than 5 years? What is the survival rate past the initial term?
#12
Given the System Health score of 13/100 (well below typical), what specific operational challenges is the franchise experiencing, and what turnaround initiatives are underway?
#13
Can you explain how the post-term non-compete clause (2 years, 25 miles) is enforced? Have there been disputes with closed franchisees reopening as competitors?
#14
The dispute resolution clause requires 4 hours of mediation before binding arbitration with no class action or jury trial rights. Why is individual arbitration mandatory rather than class action relief?
#15
Personal guarantees are required from all owners and spouses. If the franchise fails, are owners' personal assets at risk even if the franchisor is partially responsible?
#16
What support and training are provided after the initial setup, given that you have a relatively low royalty rate that may limit corporate resources?
#17
Are there financial reporting requirements or Item 19 sales data from existing franchisees that you can share to validate unit economics?
#18