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Description
Investment Icon

What Are the Initial Investment Requirements for a 1st Class Real Estate Franchise?

To become a franchisee with 1st Class Real Estate, you should be prepared for a range of initial investment costs. The franchise fee is set at $20,000, while the total initial investment can vary between $23,500 and $113,500. This investment encompasses various startup expenses, including equipment, marketing, and operational costs. Additionally, you will need to have a net worth between $100,000 and $500,000, along with cash reserves of at least $23,500 to $113,500 to ensure you can cover initial operational needs.

Fees Icon

What Are the Ongoing Fees Associated with a 1st Class Real Estate Franchise?

Owning a 1st Class Real Estate franchise involves ongoing financial commitments. Franchisees are required to pay a royalty fee of 5% of their gross revenue, which contributes to the brand's support and development. Additionally, there’s a marketing fee of 2% that helps fund national and local marketing initiatives. These fees are essential for maintaining brand presence and driving customer engagement, so it's important to factor them into your financial planning as you operate your franchise.

Revenue Icon

What Is the Average Revenue Potential for a 1st Class Real Estate Franchise?

The revenue potential for a 1st Class Real Estate franchise can be impressive. On average, each unit generates annual revenue of approximately $119,174, with a median revenue figure of $239,210. However, revenue can vary significantly, with the lowest reported annual revenue at $67,154 and the highest reaching an impressive $2,577,858. Understanding these figures can help you assess the financial viability of this franchise opportunity and set realistic revenue goals for your business.

Breakeven Icon

How Long Does It Take to Break Even with a 1st Class Real Estate Franchise?

Franchisees can expect to break even within approximately 30 months of operation. This payback period is crucial for potential investors to consider, as it indicates the time frame in which you can expect to recover your initial investment. It’s important to maintain a close eye on your financial performance during this period to ensure that you are on track to achieve profitability and sustain long-term success in your franchise venture.

1st Class Real Estate Franchise Financial Requirements

Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$100,000 - $500,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

30 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$20,000
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

5%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

2%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

30 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$23,500 - $113,500
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$23,500 - $113,500
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$119,174
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$239,210
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$2,577,858
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$67,154
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Real Estate Franchises
Category icon A more specific division within the broader industry.

i Category:

Residential Brokerage
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

Rhyan Finch
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

831 Seahawk Circle, Virginia Beach, Virginia 23452
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

2018
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

1st Class Properties LLC

1st Class Real Estate Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

23
The number of locations owned by independent franchisees.

Franchised Units i

23
The number of locations owned and run by the franchisor.

Corporate Units i

0
Units 2021 2022 2023
Total Units 15 21 23
Net Change YoY 6 2
Franchised Units 15 21 23
Net Change YoY 6 2
Corporate Units 0 0 0
Net Change YoY 0 0
Investment About

Investment Overview

The 1st Class Real Estate franchise offers a low initial investment ranging from $23,500 to $113,500, making it accessible for aspiring entrepreneurs. The franchise fee is set at $20,000, with ongoing royalty and marketing fees of 5% and 2% respectively. To ensure financial stability, prospective franchisees must have a net worth between $100,000 and $500,000, along with cash reserves matching the required investment range.

Potential About

Revenue Potential

Franchisees can expect average annual revenue of approximately $119,174, with a median revenue of $239,210. The franchise has shown impressive financial performance, with the highest annual revenue per unit reaching $2,577,858. This revenue potential highlights the brand's strong market presence and the opportunity for franchisees to achieve significant profitability.

Metrics About

Breakeven Timeline

The breakeven time for a 1st Class Real Estate franchise is estimated at 30 months. This timeline indicates the period it typically takes for franchisees to recoup their initial investment. The same 30-month payback period for the investment reflects the franchise's solid revenue generation capabilities and efficient operational model.

Fees About

Franchise Growth

The growth trajectory of the 1st Class Real Estate franchise is promising, with an increase in franchised units from 15 in 2021 to 23 in 2023. This consistent growth demonstrates the brand's appeal to new franchisees and its potential for expansion in the real estate sector, making it an attractive option for investors looking to enter a growing market.

Breakeven About

Operational Expenses

Franchisees should be aware of operational expenses, which total approximately $2,299,451 annually. Key expenses include salaries and related costs, franchise fees, and software expenses, among others. Understanding these costs is crucial for maintaining profitability and ensuring effective financial management within the franchise operation.

Units About

Franchise Support

1st Class Real Estate provides comprehensive support to its franchisees, including training, marketing assistance, and operational guidance. This support is designed to help franchisees navigate the complexities of running a real estate business, equipping them with the tools and resources needed to succeed in a competitive market.

Frequently Asked Questions

The initial investment for a 1st Class Real Estate franchise ranges from $23,500 to $113,500, which includes a franchise fee of $20,000.