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Description
Investment Icon

What is the Initial Investment for a Realty World Franchise?

To start a Realty World franchise, you will need an initial investment ranging from $18,600 to $195,000. This includes a franchise fee of $18,000. Additionally, you should have cash available between $34,200 and $110,000 to cover various startup costs and initial operating expenses. Understanding these financial requirements is crucial for aspiring franchisees to ensure they are adequately prepared.

Fees Icon

What Are the Ongoing Fees for a Realty World Franchise?

Franchisees are required to pay a royalty fee of 4% on their gross sales, along with a marketing fee of 1%. These ongoing fees contribute to the support and resources provided by Realty World, helping franchisees to effectively market their services and maintain brand consistency. It’s important to factor these costs into your financial planning to ensure sustainable profitability.

Revenue Icon

What Are the Financial Performance Metrics for Realty World Franchisees?

The average annual revenue for a Realty World franchise unit is approximately $1,021,128, with a median revenue of $1,021,128. However, revenues can vary significantly, with the lowest reported at $3,736 and the highest at $1,000,000. Understanding these metrics can help potential franchisees gauge the earning potential and assess their own business strategies to maximize profitability.

Breakeven Icon

How Long Does It Take to Break Even with a Realty World Franchise?

Franchisees can expect to break even within 12 months of operation, with an investment payback period of about 36 months. This timeline can vary based on individual performance and market conditions. Knowing the breakeven point is essential for franchisees to plan their financial strategies and set realistic expectations for their business growth.

Realty World 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:

$34,200 - $110,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

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

i Franchise Fee:

$18,000
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

4%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

1%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

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

i Initial Investment:

$18,600 - $195,000
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$34,200 - $110,000
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$6,892
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$1,021,128
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$1,000,000
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$3,736
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:

Andrew Cimerman
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

1101 Dove Street, Suite 228Newport Beach, California 92660
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

2006
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

Realty World, Inc.

Realty World 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

148
The number of locations owned by independent franchisees.

Franchised Units i

148
The number of locations owned and run by the franchisor.

Corporate Units i

0
Units 2021 2022 2023
Total Units 188 166 148
Net Change YoY -22 -18
Franchised Units 188 166 148
Net Change YoY -22 -18
Corporate Units 0 0 0
Net Change YoY 0 0
Investment About

Initial Investment

The Realty World franchise offers a range of initial investment costs, with a low end of $18,600 and a high end of $195,000. The initial franchise fee is set at $18,000, while prospective franchisees should prepare for additional cash requirements ranging from $34,200 to $110,000. This investment structure provides flexibility for various types of investors looking to enter the real estate market.

Potential About

Ongoing Fees

Franchisees are subject to a royalty fee of 4% on gross sales, along with a marketing fee of 1%. These ongoing fees contribute to the overall support and branding efforts provided by Realty World, ensuring franchisees benefit from a recognized name and marketing resources that can help drive business growth.

Metrics About

Revenue Potential

Realty World franchise units have shown promising financial performance, with an average annual revenue of $1,021,128 per unit. The revenue range varies significantly, with the lowest annual revenue reported at $3,736 and the highest reaching $1,000,000. This diverse revenue potential allows franchisees to gauge their market's viability and set realistic financial goals.

Fees About

Breakeven and Payback

Franchisees can expect to reach breakeven within approximately 12 months of operation. The investment payback period is estimated at 36 months, allowing franchisees to plan their financial strategies effectively and understand the timeline for recovering their initial investment.

Breakeven About

Franchise Growth

The Realty World franchise system has seen a gradual decline in the number of franchised units, from 188 in 2021 to 148 in 2023. This trend highlights the importance of evaluating market conditions and operational challenges that may affect franchise growth, providing insights for prospective franchisees on the current health of the brand.

Units About

Operational Expenses

Franchisees should anticipate annual running expenses ranging from $29,000 to $82,000. Key expenses include insurance, miscellaneous opening costs, and additional funds for the first eight months of operation. Understanding these costs is crucial for effective budgeting and ensuring sustainable operations within the Realty World franchise system.

Frequently Asked Questions

The initial investment for a Realty World franchise ranges from $18,600 to $195,000, which includes an initial franchise fee of $18,000.