In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for a HomeVestors franchise, based on Item 7 of the company’s 2023 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for a HomeVestors franchise, based on Items 5 and 6 of the company’s 2023 FDD
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Section IV – News updates on the HomeVestors franchise opportunity
Section V – Presentation and analysis of HomeVestors’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:
- 2022 average, median, low, and high gross price differential, and average and median advertising spend for the 991 franchised HomeVestors businesses in the United States that were operating through all 12 months of the year 2022 (the “Covered Franchises”), by quartile and overall
- percentage of Covered Franchises in each region (Midwest, South, Northeast, and West) within each gross price differential quartile for the year 2022
Section VI – Key ratios, comparables, computations, and analyses for the HomeVestors franchise opportunity (exclusive content for Platinum subscribers)
Section I – HomeVestors Franchise Costs
- HomeVestors franchise costs (full franchise), based on Item 7 of the company’s 2023 FDD:
- Initial Franchise Fee: $85,000
- Leasehold Improvements: $0 to $5,000
- Furniture, Fixtures, and Equipment: $0 to $10,200
- Signage: $0 to $4,200
- First Month’s Rent: $0 to $2,000
- Security Deposit: $0 to $2,000
- Opening Supplies: $200 to $1,950
- Advertising: $30,000 to $140,000
- Training Expense: $1,800 to $6,000
- iPad and Computer Equipment: $2,000 to $10,000
- Insurance: $2,000 to $8,000
- Miscellaneous Opening Costs: $1,000 to $7,900
- Purchase and Repair of Properties: $13,000 to $129,000
- Additional Funds for 6 Months: $0 to $50,000
- Total Estimated HomeVestors Franchise Costs: $135,000 to $456,250
Section II – HomeVestors’ Initial Franchise Fee, Royalty Fee, and Marketing Fee
- HomeVestors’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:
- Initial Franchise Fee: $80,000
- Transaction Fees: Level 1: 3.0% of the sales price; Level 2: 2.0% of the sales price; Level 3: 1.5% of the sales price; Level 4: 1.25% of the sales price; Level 5: 1.0% of the sales price; Level 6: 0.80% of the sales price
- Monthly Fee: $399 per month
- Local or Regional Marketing/Advertising Council: Level 4, 5, and 6 franchisees must spend at least $5,000 per month for local advertising; Level 3 franchisees must spend at least $1,000 per month for local advertising; Level 2 franchisees must spend at least $1,000 per month for local advertising. Level 1 franchisees are not required to advertise, unless their Advertising Council documents or the NAF requires them to contribute to the Advertising Council or NAF, limited to a maximum contribution requirement of $1,000 per month. Notwithstanding the foregoing, you must spend at least $1,000 in any given 6-month period.
- Marketing Fund Contributions: currently $300 for each Sale Transaction, Assignment Transaction, and Hold Transaction, maximum of $1,000 for each Sale Transaction, Assignment Transaction, and Hold Transaction. In addition, a Level 2 franchise must contribute $200 to the Marketing Fund or NAF, as HomeVestors directs, for each month that it did not spend at least $1,000 for local advertising.
- National Advertising Fund (“NAF”) Contribution: the amount HomeVestors designates from time to time; provided that you will not be required to contribute to the NAF and Advertising Council (or expend for local advertising if there is no Advertising Council in the Territory) more than the minimum monthly local advertising requirement specified for your Level or 25% of your monthly advertising spend, whichever is greater
Section III – Number of Franchised and Company-Owned HomeVestors Outlets
Franchised
2020
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.🔴Free Webinar: 6 Under-the-Radar Franchise Concepts That Serious Buyers Should Know
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- Outlets at the End of the Year: 1,148
- Net Change: +15
2021
- Outlets at the Start of the Year: 1,148
- Outlets at the End of the Year: 1,154
- Net Change: +6
2022
- Outlets at the Start of the Year: 1,154
- Outlets at the End of the Year: 1,144
- Net Change: -10
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
🎯Find Best-Fit Franchises Still Available in Your Target Area (Free Tool)
When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.📈Dreaming of Multi‑Unit Success? Lock In Prime Territories Before They're Gone.
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. A franchise specialist will be in touch to present what's available.- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 3
- Net Change: +3
Section IV – News Updates on the HomeVestors Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the HomeVestors Franchise (Item 19, 2023 FDD)
- This Item 19 presents information about the Gross Price Differential (as defined below) and the annual advertising spend for the period from January 1, 2022 through December 31, 2022 (the “Year 2022”) for all 991 franchised HomeVestors Businesses in the United States that were operating through all 12 months of the Year 2022 (the “Covered Franchises”).
- It does not include (i) 76 franchised HomeVestors Businesses that opened for the first time during the Year 2022, (ii) 86 franchised HomeVestors Businesses that were permanently closed during the Year 2022 (82 of which have been open for at least 12 months prior to closing), and (iii) 81 franchised HomeVestors Businesses that were transferred to another franchisee or reacquired by HomeVestors during the Year 2022.
- “Gross Price Differential” means the total sales prices of all properties sold by a HomeVestors Business during the Year 2022 less the total purchase prices of such properties, regardless of when such properties were initially purchased.
- Gross Price Differential does not take into account any costs incurred by a Covered Franchise in purchasing, rehabbing, or selling such properties, including repair costs, advertising costs, including Ad Spend (defined below), real estate commissions, transaction fees payable to HomeVestors, closing costs, seller’s concessions, taxes, holding costs, or utilities, or any other costs incurred by a Covered Franchise in operating their franchises, including labor costs, vehicle costs, insurance costs, royalty and marketing fees, or any of the other fees disclosed in the Disclosure Document.
- “Ad Spend” means the total amount spent by a Covered Franchise during the Year 2022 on advertising related to generating property acquisition leads through contributions to their Advertising Council and the NAF. It does not include Marketing Fund Contributions, money spent on Dig Leads, or advertising related to marketing properties for sale.
- Each “Quartile” has been determined by dividing the Covered Franchises based on total annual Gross Price Differential into four groups, each containing a quarter of the Covered Franchises. The “Top Quartile” means the top 25% performing Covered Franchises, the “2nd Quartile” means the next highest 25% performing Covered Franchises, the “3rd Quartile” means the next highest 25% performing Covered Franchises, and the “Bottom Quartile” means the lowest 25% performing Covered Franchises.
Part 1 – Gross Price Differential and Advertising Spend by Quartile for the Covered Franchises
Top Quartile
- Average Gross Price Differential: $1,696,458
- Number and % Exceeding Average Gross Price Differential: 77/248 (31%)
- Median Gross Price Differential: $1,293,416
- Low Gross Price Differential: $760,110
- High Gross Price Differential: $9,950,210
- Average Ad Spend: $186,883
- Number and % Exceeding Average Ad Spend: 82/248 (33%)
- Median Ad Spend: $139,250
2nd Quartile
- Average Gross Price Differential: $517,862
- Number and % Exceeding Average Gross Price Differential: 111/247 (45%)
- Median Gross Price Differential: $497,990
- Low Gross Price Differential: $344,000
- High Gross Price Differential: $756,900
- Average Ad Spend: $94,937
- Number and % Exceeding Average Ad Spend: 113/247 (45%)
- Median Ad Spend: $88,000
3rd Quartile
- Average Gross Price Differential: $194,783
- Number and % Exceeding Average Gross Price Differential: 117/248 (47%)
- Median Gross Price Differential: $187,650
- Low Gross Price Differential: $56,344
- High Gross Price Differential: $342,950
- Average Ad Spend: $50,175
- Number and % Exceeding Average Ad Spend: 107/248 (43%)
- Median Ad Spend: $45,000
Bottom Quartile
- Average Gross Price Differential: $3,962
- Number and % Exceeding Average Gross Price Differential: 29/248 (12%)
- Median Gross Price Differential: $0
- Low Gross Price Differential: $0
- High Gross Price Differential: $55,617
- Average Ad Spend: $18,212
- Number and % Exceeding Average Ad Spend: 79/248 (32%)
- Median Ad Spend: $5,000
All Covered Franchises
- Average Gross Price Differential: $603,353
- Number and % Exceeding Average Gross Price Differential: 311/991 (31%)
- Median Gross Price Differential: $342,950
- Low Gross Price Differential: $0
- High Gross Price Differential: $9,950,210
- Average Ad Spend: $87,544
- Number and % Exceeding Average Ad Spend: 343/991 (35%)
- Median Ad Spend: $56,500
Part 2 – Percentage of Covered Franchises in Each Region Within Each Gross Price Differential Quartile for Year 2022
- Part 2 lists by geographic region the percentage of Covered Franchises in that region that are included within each Quartile presented in Part 1 based on such Covered Franchise’s Gross Price Differential for the Year 2022.
Top Quartile
- Midwest: 31.25%
- South: 23.19%
- Northeast: 22.22%
- West: 27.07%
2nd Quartile
- Midwest: 18.75%
- South: 28.30%
- Northeast: 23.33%
- West: 23.20%
3rd Quartile
- Midwest: 28.13%
- South: 25.96%
- Northeast: 25.56%
- West: 19.34%
Bottom Quartile
- Midwest: 21.88%
- South: 22.55%
- Northeast: 28.89%
- West: 30.39%
- The Midwest is comprised of the following states: IL, IN, IA, KS, MI, MN, MS, NE, ND, OH, SD, and WI.
- The South is comprised of the following states: AL, AR, DC, FL, GA, KY, LA, MS, NC, OK, SC, TN, TX, VA, and WV.
- The Northeast is comprised of the following states: CT, DE, ME, MD MA, NH, NJ, NY, PA, RI, and VT.
- The West is comprised of the following states: AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, and WO.
- Some HomeVestors Businesses have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.
- As described above, Gross Price Differential does not take into account all categories of expenses that Covered Franchises incur related to buying, rehabbing, and selling properties and operating their businesses.
- The amounts in the table are based on information reported to HomeVestors by franchisees. HomeVestors has not audited this information.
Section VI – HomeVestors Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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