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Century 21 Franchise ProfileReal Estate Franchises > Residential Brokerage |
What Are the Initial Investment Costs for a Century 21 Franchise?
To open a Century 21 franchise, you should expect a range of initial investment costs. The franchise fee is $25,000, but total initial investment can vary significantly, from $32,870 to $466,300. This range accounts for various startup expenses, including equipment, leasehold improvements, and initial working capital. Additionally, you'll need to have a minimum cash requirement of $114,370 and a net worth of at least $150,000 to qualify for franchise ownership.
What Are the Ongoing Fees Associated with a Century 21 Franchise?
As a Century 21 franchisee, you will be responsible for ongoing royalty and marketing fees. The royalty fee is set at 6% of your gross revenue, while a marketing fee of 2% is also required. These fees contribute to the overall support and branding efforts provided by the Century 21 corporate team, helping you to maintain a competitive edge in the real estate market.
What Financial Performance Can You Expect as a Century 21 Franchisee?
Century 21 franchises have shown strong financial performance, with average annual revenue estimated at $5,636,000. The revenue can vary widely, with the lowest reported at $1,145 and the highest reaching up to $8,843,829. With a breakeven time of approximately 12 months and an investment payback period of around 36 months, franchisees can anticipate a solid return on their investment if they effectively manage their operations and marketing strategies.
What Are the Trends in Century 21 Franchise Units?
The number of Century 21 franchised units has seen a gradual decline over the past few years, from 1,902 units in 2021 to 1,807 in 2023. Despite this decrease, the franchise continues to maintain a strong presence in the real estate industry. It’s essential for prospective franchisees to consider market conditions and competition when evaluating the sustainability and growth potential of their franchise location.
Century 21 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.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Century 21 Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1902 | 1870 | 1807 |
| Net Change YoY | -32 | -63 | |
| Franchised Units | 1902 | 1870 | 1807 |
| Net Change YoY | -32 | -63 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Century 21 franchise offers a low initial investment ranging from $32,870 to $466,300, making it accessible for aspiring entrepreneurs. The initial franchise fee is set at $25,000. Franchisees can expect a royalty fee of 6% on gross sales, along with a 2% marketing fee. To get started, franchisees should have cash reserves between $114,370 and $466,300, and a net worth of at least $150,000, ensuring a solid financial foundation for business operations.
Revenue Potential
Franchisees in the Century 21 network can anticipate significant revenue potential, with average annual revenue per unit reported at $5,636,000. The highest annual revenue recorded is an impressive $8,843,829, while the lowest stands at $1,145. This wide range highlights the variability in performance, influenced by factors such as location, market conditions, and operational effectiveness.
Breakeven and Payback
The Century 21 franchise has a breakeven timeframe of approximately 12 months, allowing franchisees to recover their initial investment relatively quickly. The investment payback period is projected at 36 months, providing a clear timeline for franchisees to evaluate their financial performance and profitability.
Franchise Growth
Century 21 has shown a steady presence in the real estate market, with a total of 1,807 franchised units as of 2023. This reflects a slight decline from 1,902 units in 2021. The absence of corporate-owned units indicates a strong focus on franchising, allowing independent operators to leverage the brand's reputation and resources in their local markets.
Financial Performance
The average profit and loss metrics for Century 21 units demonstrate a gross profit margin of 35%, with operating expenses accounting for 20% of revenue. This results in an EBITDA of $825,000, representing 15% of total revenue. Understanding these financial dynamics is crucial for potential franchisees to assess the viability and profitability of their investment.
Operational Expenses
Franchisees should be aware of average running expenses, which range between $81,500 and $187,300 annually. Key expenses include occupancy costs (up to $50,000), furnishings and communications equipment (between $27,000 and $87,500), and employee salaries and benefits (ranging from $15,000 to $40,000). Proper management of these costs is essential for maintaining profitability within the Century 21 franchise model.
Frequently Asked Questions
The initial investment for a Century 21 franchise ranges from $32,870 to $466,300, which includes the franchise fee of $25,000 and other startup costs.