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Real Property Management Franchise Cost & Fees

Date of Incorporation: 2004
Franchising Since: 2004
Headquarters: Salt Lake City, Utah

Business Description: A Real Property Management franchise permits franchisees to operate a business providing third party property management services for single-family and condominium homeowners, including the management of maintenance and repair management-services and rent collection.

Franchise Offer: Real Property Management offers a Standard Real Property Management franchise: a franchise purchased within an isolated metropolitan area that has a population of more than 100,000 people.

Financial Assistance: If the franchisee meets the franchisor’s credit standards, and in the franchisor’s sole discretion, the franchisor may consider financing a portion of the initial franchise fee for a Standard Real Property Management business over a two-year period. Except as disclosed, the franchisor does not finance any fee, or arrange financing from other sources, nor does the franchisor guarantee a franchisee’s lease or any other obligation. Additionally, except as disclosed above, the franchisor does not receive direct or indirect payments from placing financing.

Training and Assistance: Training includes over 40 hours of classroom instruction on various topics including: accounting, marketing, property management procedures, maintenance, office manager procedures, and sales/closing. Periodically, the franchisee, his or her managers, or employees must attend one ongoing training session and may attend additional ongoing training sessions to be conducted at company headquarters or another designated location.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands controlled by the franchisor. The boundaries of the non-exclusive territory are based on a variety of factors, including population, media population age, proximity to competitors, proximity to other franchisees and natural, physical or political boundaries. A typical non-exclusive territory for a Standard Real Property Management franchise will contain a population of approximately 100,000 people.

Term of Agreement and Renewal: The length of the initial term is 10 years. If conditions are met, the franchisee can renew for unlimited terms of 10 years each.

Obligations and Restrictions: The franchised business must always be under the direct, full-time, day-to-day supervision of a designated manager. If the franchisee is an individual, the franchisor may require the franchisee to be the designated manager of the franchise. If the franchisor requires the franchisee to be the designated manager, the franchisee must request the franchisor’s consent to select another individual to replace him or her as the designated manager. If the franchisee is a corporation or other business entity, the corporation/entity will select a designated manager for the franchise and the franchisor may require that the individual selected is an owner of the franchise. Franchisees must offer the services and products specified by the franchisor. Franchisees may not sell any products or services that have not been authorized and must discontinue offering any products or services that the franchisor may disapprove.

Estimated Number of Units: 285

Investment Tables:
Initial Investment for a Standard Franchise
Name of Fee Low High
Franchise Fee $40,000 $40,000
Marketing $3,000 $4,500
Real Estate/Rent $500 $5,500
Utility Deposits $100 $300
Leasehold Improvements $0 $1,000
Insurance $500 $2,000
Office Equipment and Supplies $1,500 $2,500
Training $1,000 $2,000
Signage $200 $1,000
Furniture, Fixtures & Equipment $500 $2,000
Property Management Software $400 $400
Licenses & Permits $500 $1,000
Dues & Subscriptions $100 $200
Additional Funds (3 months) $30,000 $40,000
ESTIMATED TOTAL $79,875 $103,875
Other Fees
Type of Fee Amount
Royalty Fee 7% of gross sales less maintenance revenues, or $250 whichever is greater.
Maintenance Revenue Royalty Fee 3% of maintenance revenues.
Marketing Fund Contribution Up to 2% of gross sales.
Local Advertising $1,000 per month or a minimum of 3% of gross sales, whichever is greater.
Monthly Property Management Software Fee Dependent upon number of units managed, with a monthly minimum of $178
Monthly BackOffice Bookkeeping Assistance Fee $17 per unit managed, $100 minimum. This may adjust to the market rates at BackOffice's discretion. A catch-up fee may also apply.
National Accounts Financial Services $12.50 per active National Accounts Property managed.
Technology Fee $79
Task Management Software Fee $27 per user per month if paid monthly or $264.00 per user if paid annually.
Fine for Marketing Outside the Territory $500
Audit Expenses All costs and expenses associated with audit, approximately $1,500 -$5,000
Late Fees 1.5% per month or the highest rate allowed by the state where you are located, whichever is less.
Late Fees on Royalties Amount will calculated averaging the previous three months of Royalties paid, multiplied by 10%.
Non-Sufficient Funds (NSF) Fee A fee of $50 will be collected for any payment that is returned as NSF.
Insurance Payment Amounts imposed by insurance companies.
Transfer Fee $10,000
Guarantor Change $1,000
Partial Ownership $1,000
Successor Franchise Fee $1,000
System Modifications Not more than $10,000 during the initial term of the franchise.
Substitute or New Manager Training/ Additional Training Currently, $250 per day, plus the expenses in attending.
Customer Service All costs incurred in assisting the franchisee’s customers, approximately $3,500 -$7,000
Ongoing Training $600-$1,500
Conventions and Other Mandatory Meetings $1,500-$3,000
Additional Operations Assistance Currently, $500 per day plus franchisor’s expenses.
Cost of Enforcement All costs including reasonable attorneys' fees.
Temporary Management Assistance Currently, $500 per day, plus franchisor’s expenses.
Indemnification All costs including reasonable attorneys' fees.

The above information has been taken from the FDD of Real Property Management. Year of FDD: 2016

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