Century 21 Franchise Costs & Fees

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Description

Year Business Began: 1971Franchising Since: 1972Headquarters: Madison, New JerseyEstimated Number of Units: 8,000Franchise Description: Century 21 Real Estate LLC is the franchisor. The franchisor operates as a subsidiary of Realogy Group and Realogy Holdings. The franchisor offers franchises for real estate sales offices in the United States to owners of existing real estate brokerage businesses and to persons who want to start a real estate brokerage business.Training Overview: The franchisor will conduct the International Management Academy (IMA) Program, which includes RECRUIT 21 at or near its Headquarters in New Jersey or at other locations as it may choose. Franchisees or their designee approved by the franchisor, is required to attend the IMA Program within 24 months after signing the Franchise Agreement. If an office manager will operate the Office, the office manager may attend IMA in the franchisee’s place. IMA is approximately three and a half days in length. The franchisor offers IMA at its corporate headquarters, a local hotel nearby, or at another off-site location of its choice. During the operation of the franchised Century 21 Office, the franchisor will provide continuing assistance to franchisees with respect to improvements and changes to the Century 21 System. Guidance may be in the form of bulletins or other written materials, electronic communication, consultation by telephone or in person at a franchisee’s office, or by other means. The franchisor will also hold other education programs or networking events on a periodic basis for Century 21 brokers and independent sales associates at locations it selects or through online courses. Territory Granted: Franchisees must operate their franchised business only from the office(s) identified in the Franchise Agreement. The franchisor will not grant another Century 21 franchisee a location within a ¼-mile radius (as the crow flies measured between exterior office walls) from the franchisee’s office(s). No franchisee is prohibited, however, from seeking listings or buyers in any area.Obligations and Restrictions: Franchisees, if they are an individual and obtaining the franchise as a sole proprietor, or the Owners, if the franchisee is an entity, must participate in the management of the franchise. Franchisees must retain a “Responsible Broker” (as defined in the Franchise Agreement) and they, their office manager(s) and their Responsible Broker must comply with all applicable laws, rules and regulations. Each equity interest holder in the franchise must sign a Guaranty of Payment and Performance. Franchisees may only operate a real estate brokerage business from their Office(s), unless the franchisor allow them to conduct other activities. Franchisees can only operate under a business or trade name which includes the words, “Century 21”, and which complies with the P&P Manual. Franchisees are required to meet certain quality service standards that the franchisor may establish periodically, and their customer service may be monitored through a client survey developed by the franchisor.Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the Opening Date. The franchisor has the right, however, to negotiate with franchisees a greater or lesser term under the Franchise Agreement. There are no renewal rights. The franchise agreement will be extended for 10 years if the franchisee signs a Term Extension Addendum.Financial Assistance: Neither the franchisor nor any related company is obligated to provide the franchisee with any financing. The franchisor or a related company, however, has the right to offer franchisees financing based on several factors including without limitation the franchisee’s financial need, credit history, ability to repay, net worth, stability, as well as the franchisor’s need for the development of the franchisee’s market area. The franchisor has the right to require the franchisee to furnish financial statements, tax returns and other documents. The terms of any financing are open to negotiation between the parties. The franchisor or a related company offers three types of financing in the form of promissory notes. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $0 $25,000 Real Estate and Improvements Not included in total Equipment/Fixtures (Not required) $5,000 $10,000 Signs – Exterior $800 $20,000 Signs – Yard, Open House and Rides $2,000 $5,000 Name Badges (approx. 7 to 70) $150 $750 Miscellaneous $250 $500 Other Advertising – 3 Months (Not required) $0 $17,000 Legal Expenses $0 $4,000 Office Supplies $1,000 $7,500 Website $0 $30,000 Multiple Listing Services $0 $2,000 International Management Academy (IMA) $0 $1,800 Insurance Deposits and Premiums $500 $2,500 Additional Funds – 3 Months $13,000 $43,000 Additional Fees for Start-up Office Leasehold Improvements $20,000 $125,000 Facility and Space Planning $1,800 $2,800 Security and Other Deposits $7,500 $17,700 Furnishings and Communications Equipment $40,200 $80,200 Prepaid Business Expenses $3,000 $4,600 Additional Funds – First 3 months after opening $50,000 $100,000 ESTIMATED TOTAL $132,200 $456,300 Other Fees Type of Fee Amount Royalty Fee 6% of Gross Revenue, except that Gross Revenue for Property Management Services is assessed separately with a Property Management Fee equal to 1.5% of Gross Revenue. Property Management Fees 1.5% of Gross Revenue from Property Management Services. Minimum Monthly Royalty Fee $500 per month. Minimum Annual Royalty Fee Varies by location. Brand Marketing Fund Fee (BMF) PROGRAM A: 2% of monthly Gross Revenue up to $3,000,000; 0.5% of Gross Revenues over $3,000,000PROGRAM B: 2% of monthly Gross Revenue, subject to a monthly minimum of $672 and maximum of $1,658 Zap Platform Currently, franchisees do not have to pay a separate fee to use the technology platform, although the franchisor does reserve the right to require payment of reasonable fees to the franchisor, Zip or an affiliate for use of the platform. LeadRouter Fee $375 – $5,000 per year. Computer Hardware and Software Maintenance and Support $1,000 to $2,000 or more per year. International Management Academy Fee (IMA) $399 per attendee – the fee includes tuition, lodging and function meals only. Other Education Fees Varies by course and duration. Audit Fees Cost of audit plus fees past due, interest, late charges and costs. Liquidated Damages The combined monthly average of Royalty Fees, advertising contributions, and any other fees under the Agreement (without regard to any fee waivers, rebate or other reductions) payable from the Opening Date through the date of early termination, multiplied by the lesser of (i) 36 or (ii) the number of full months remaining in the Term. Special Assistance As negotiated. Late Charges and Interest All past due payments will bear interest at the highest legal rate (not to exceed 1.5% per month) plus the highest allowable legal late charge. Transfer/Assignment Fee $5,000 Costs and Attorney’s Fees Will vary. Taxes Will vary. Indemnification Will vary. Relocation/Improvement Fees Will vary. Insurance Cost of Insurance Product/Service Fee Will vary. Testing/Inspection Fees to Approve Supplier The franchisor does not currently charge fees for approval of a supplier, but it has the right to charge reasonable testing and inspection fees. Expanded Location Fee Varies Global Conference Fee $569 – $799 per registrant for One21, depending upon when franchisees register The above information has been compiled from the FDD of Century 21. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty Fee 6% of Gross Revenue, except that Gross Revenue for Property Management Services is assessed separately with a Property Management Fee equal to 1.5% of Gross Revenue.
Property Management Fees 1.5% of Gross Revenue from Property Management Services.
Minimum Monthly Royalty Fee $500 per month.
Minimum Annual Royalty Fee Varies by location.
Brand Marketing Fund Fee (BMF)

PROGRAM A: 2% of monthly Gross Revenue up to $3,000,000; 0.5% of Gross Revenues over $3,000,000

PROGRAM B: 2% of monthly Gross Revenue, subject to a monthly minimum of $672 and maximum of $1,658

Zap Platform Currently, franchisees do not have to pay a separate fee to use the technology platform, although the franchisor does reserve the right to require payment of reasonable fees to the franchisor, Zip or an affiliate for use of the platform.
LeadRouter Fee $375 – $5,000 per year.
Computer Hardware and Software Maintenance and Support $1,000 to $2,000 or more per year.
International Management Academy Fee (IMA) $399 per attendee – the fee includes tuition, lodging and function meals only.
Other Education Fees Varies by course and duration.
Audit Fees Cost of audit plus fees past due, interest, late charges and costs.
Liquidated Damages The combined monthly average of Royalty Fees, advertising contributions, and any other fees under the Agreement (without regard to any fee waivers, rebate or other reductions) payable from the Opening Date through the date of early termination, multiplied by the lesser of (i) 36 or (ii) the number of full months remaining in the Term.
Special Assistance As negotiated.
Late Charges and Interest All past due payments will bear interest at the highest legal rate (not to exceed 1.5% per month) plus the highest allowable legal late charge.
Transfer/Assignment Fee $5,000
Costs and Attorney’s Fees Will vary.
Taxes Will vary.
Indemnification Will vary.
Relocation/Improvement Fees Will vary.
Insurance Cost of Insurance
Product/Service Fee Will vary.
Testing/Inspection Fees to Approve Supplier The franchisor does not currently charge fees for approval of a supplier, but it has the right to charge reasonable testing and inspection fees.
Expanded Location Fee Varies
Global Conference Fee $569 – $799 per registrant for One21, depending upon when franchisees register