In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for a Real Property Management franchise, based on Item 7 of the company’s 2023 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for a Real Property Management franchise, based on Items 5 and 6 of the company’s 2023 FDD
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Section IV – News updates on the Real Property Management franchise opportunity
Section V – Presentation and analysis of Real Property Management’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:
- 2022 average and median number of units managed per franchise and annual revenue per unit for reporting franchises more than 1 year and less than 3 years old, reporting franchises over 3 years old, and all 320 reporting franchises that were operating for at least 12 months as of December 31, 2022
- 2022 average and median rent for all 320 reporting franchises that were operating for at least 12 months as of December 31, 2022
Section VI – Key ratios, comparables, computations, and analyses for the Real Property Management franchise opportunity (exclusive content for Platinum subscribers)
Section I – Real Property Management Franchise Costs
- Real Property Management franchise costs, based on Item 7 of the company’s 2023 FDD:
- Initial Franchise Fee: $59,900
- Marketing: $8,000
- Real Estate/Rent: $2,250 to $6,000
- Vehicle: $3,000 to $5,000
- Insurance: $6,250 to $7,250
- Equipment and Supplies: $2,500 to $5,000
- Training, Travel, Lodging, and Food: $1,000 to $1,500
- Property Management Software: $1,028
- System Technology Fee: $240
- Task Management and Lead Management Software: $300
- Licenses, Permits, and Subscriptions: $750 to $2,000
- Legal and Accounting: $1,500 to $5,000
- Additional Funds (12 months): $5,000 to $175,000
- Total Estimated Real Property Management Franchise Costs: $91,718 to $266,218
Section II – Real Property Management’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- Real Property Management’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:
- Initial Franchise Fee: $59,900
- License Fee: the greater of (i) 7% of Non-Maintenance Gross Sales, plus 3% of Maintenance Revenues; or (ii) the Minimum License Fee, except for “roll-in” sales. The Minimum License Fee will be $0 per month for months 1-4; $250 per month for months 5-12; $500 per month for months 13-24; and $1,000 per month for months 25 to the end of the term of the Franchise Agreement.
- Marketing, Advertising, and Promotion Fee: 2% of Non-Maintenance Gross Sales
- Local Marketing Groups: not to exceed 5% of Non-Maintenance Gross Sales for the previous calendar year
- Minimum Local Marketing Spending: the greater of: (a) $32,000 per calendar year or (b) 5% of Non-Maintenance Gross Sales for the previous calendar year; monthly fees for the Digital Marketing Program are a minimum of $349 per office
Section III – Number of Franchised and Company-Owned Real Property Management Outlets
Franchised
2020
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- Outlets at the End of the Year: 336
- Net Change: +21
2021
- Outlets at the Start of the Year: 336
- Outlets at the End of the Year: 360
- Net Change: +24
2022
- Outlets at the Start of the Year: 360
- Outlets at the End of the Year: 389
- Net Change: +29
Company-Owned
2020
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
2021
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
2022
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Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does.- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
Section IV – News Updates on the Real Property Management Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Real Property Management Franchise (Item 19, 2023 FDD)
- As of December 31, 2022, there were 389 Real Property Management franchises.
- This Item 19 includes data from 320 franchised businesses, which were all in operation and reporting sales for the entire calendar year 2022.
- The information provided in this Item 19 does not include data from (a) 37 new franchised businesses that opened during the calendar year 2022 and therefore were not in operation for the entire reporting period, (b) 10 franchised businesses that transferred ownership to new owners during 2022 and were not in operation for the entire reporting period, and (c) 22 franchised businesses that failed to report sufficient or reliable data to Real Property Management for the entire 12-month reporting period.
- Seven franchised businesses closed during the 2022 calendar year and so they did not report data to Real Property Management for the entire reporting period and therefore their data is also excluded from this Item 19.
- “Annual Revenue” as used in the following charts means the sum of the Non-Maintenance Gross Sales and Maintenance Revenues for each franchisee during the fiscal year ended December 31, 2022. Also, because these are Annual Revenue results only, no costs or expenses are taken into account.
- Non-Maintenance Gross Sales include the total revenues and receipts from whatever source (whether in the form of cash, credit, agreement to pay, barter, trade, or other consideration) that arise, directly or indirectly, from the operation of or in connection with a Real Property Management Business whether under any of the Marks or otherwise, including, without limitation, all proceeds from any business interruption insurance, minus Maintenance Revenues.
- Non-Maintenance Gross Sales exclude sales taxes collected from customers and paid to the appropriate taxing authority and any other bona fide refunds, rebates, or discounts that Real Property Management authorizes in writing.
- Maintenance Revenues include all gross revenue derived from repairs and maintenance services to real property or equipment, such as, but not limited to, painting, lawn care, preventative maintenance, cleaning, plumbing, and general repairs to real property or equipment, whether such gross revenue is generated by (i) the franchisee; (ii) any business entity that controls, is controlled by, or is under common control with the franchisee; or (iii) any person or family member of any person with an ownership interest in the franchisee.
- Pass-through expenses, such as costs of outside vendors, may not be deducted from Maintenance Revenues without prior approval from Real Property Management, and must be accounted for through your trust account.
- Maintenance Revenues exclude sales taxes collected from customers and paid to the appropriate taxing authority and any other bona fide refunds, rebates, or discounts that Real Property Management authorizes in writing.
- Monthly reports from franchise owners provide Real Property Management’s only visibility into the financial results of the individual franchise owners’ operations. Neither Real Property Management or its independent certified public accountants have audited or independently verified any of the data submitted by franchisees. Franchisees are not required to use generally accepted accounting principles when reporting these figures.
- All calculations are based on financial and unit data for the year ended December 31, 2022. This report does not include information about previous periods or any future periods.
- The following charts represent the average and median number of units and average and median revenue per unit being managed by Real Property Management franchised businesses (“Franchises”). The data is broken down according to the age of the franchise, based upon the year the franchise was opened.
- The average and median annual revenue per unit data was drawn from the franchisee reports described above. No adjustments, including adjustments for geographic location, have been made to these reported sales.
Part 1 – Reporting Franchises More Than 1 Year and Less Than 3 Years Old
- Total Number of Reporting Franchises: 45
- Average Number of Units Managed Per Franchise: 123
- Median Number of Units Managed Per Franchise: 63
- Average Annual Revenue Per Unit: $6,628
- Median Annual Revenue Per Unit: $4,940
- There are 45 reporting franchises included in this analysis. The actual range of the Annual Revenue per Unit in 2022 was $1,484.87 to $51,643.37.
- 19 franchises (25%) achieved or exceeded the reported Average Annual Revenue per Unit.
- 19 franchises (42%) achieved or exceeded the reported Median Annual Revenue per Unit.
Average Source of Revenue breakdown:
- Property Owners (property owners who pay franchisees fees to manage the property): 46%
- Property Residents (tenants who pay franchisees for background checks, application fees, lease renewal fees, resident benefits packages, setup fees, etc.): 7%
- Property Maintenance (maintenance done on the property): 45%
Part 2 – Reporting Franchises Over 3 Years Old
- Total Number of Reporting Franchises: 275
- Average Number of Units Managed Per Franchise: 320
- Median Number of Units Managed Per Franchise: 237
- Average Annual Revenue Per Unit: $3,889
- Median Annual Revenue Per Unit: $3,634
- There are 275 reporting franchises included in this analysis. The actual range of the Annual Revenue per Unit in 2022 was $856.93 to $12,114.20.
- 108 franchises (39%) achieved or exceeded the reported Average Annual Revenue per Unit.
- 128 franchises (47%) achieved or exceeded the reported Median Annual Revenue per Unit.
- Average Source of Revenue breakdown: Property Owners (47%); Property Residents (7%); Property Maintenance (44%).
Part 3 – All Reporting Franchises
- Total Number of Reporting Franchises: 320
- Average Number of Units Managed Per Franchise: 286
- Median Number of Units Managed Per Franchise: 169
- Average Annual Revenue Per Unit: $4,353
- Median Annual Revenue Per Unit: $3,814
- There are 320 reporting franchises included in this analysis. The actual range of the Annual Revenue per Unit in 2022 was $856.93 to $51,643.37.
- 105 franchises (33%) achieved or exceeded the reported Average Annual Revenue per Unit.
- 142 franchises (44%) achieved or exceeded the reported Median Annual Revenue per Unit.
- Average Source of Revenue breakdown: Property Owners (47%); Property Residents (7%); Property Maintenance (44%).
Part 4 – All Reporting Franchises
- Total Number of Reporting Franchises: 320
- Average Monthly Rent: $1,368
- Median Monthly Rent: $1,325
- Rent is calculated as total rent charged on leases/active units managed (including vacancies). Local market rental rates may vary.
- The actual range of the rent in 2022 was $161.70 to $3,125.79.
- Number (and percentage) of franchises charging the Average Monthly Rent or greater rent: 161 (50%)
- Some outlets have earned this amount. Your individual results may differ. There is no assurance that you will earn as much.
Section VI – Real Property Management Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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