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Real Estate and Home Improvement Franchise Investment Information

Important Note: The provisions and fees illustrated in this report are only the most common and not a complete listing. Please review the Franchise Disclosure Document (FDD) for all provisions and fees related to investing in a specific franchise.

Interested in the home improvement franchise industry? Assess your qualifications to see if they match up with industry requirements. There are 14 franchises profiled below and more are readily available in the Real Estate and Home Services sections of our website.

What are franchisors looking for in potential franchisees?

Real Estate FranchisingQualifications for each franchise system vary by franchisor. For instance, the franchise House Doctors doesn’t require technical abilities often associated with the home improvement industry. Due to  a strong belief that managing figures is key to success, Jim Hunter says that House Doctors looks for “managers with drive who are good communicators and team builders. Our franchisees do not swing a hammer.”

Adds Kathleen Kuhn, “Naturally [HouseMaster has] certain liquid capital requirements as well as net worth requirements, but just as important are the less tangible traits. Self-confidence, strong communication skills as well as family support are important characteristics we look for before we award a franchise. We love franchisees that come from entrepreneurial families or background as well.”

What should I be looking for in a potential franchisor?

In addition to finding an area that you will enjoy working in for the next five, 10, or more years, also get to know the culture of a franchise organization. “This is critical,” says Kuhn. “While the formal support provided by the franchisor must be strong, the best franchise systems have a true fellowship among their franchisees. This secondary layer of support is powerful and can be an important factor in terms of a franchisee’s ROI on joining the system.”

An important question to ask these franchisors is how they inspire customer trust.

Unfortunately, unethical business practices can have a negative impact on the perception of the real estate and home improvement industries. Fortunately, franchisors within these business areas are aware of this and are taking proactive steps to assure customers of their trustworthiness.

For the home inspection industry, third party programs have become more common as a way to provide a short term warranty to their customers and increase peace-of-mind.

For HouseMaster, the task of inspiring consumer confidence is woven into the foundation of the company—and it ventures to offer more than industry standard. “Over 20 years ago HouseMaster introduced the first home inspection Guarantee,” says Kuhn. “Only HouseMaster home inspectors back the quality of their service with a written Repair Reimbursement Guarantee. The guarantee provides reimbursement of repair expenses incurred by our customers on eligible elements for a minimum of 90 days from closing or 120 days after the inspection (terms vary by location). This guarantee gives our customers the peace of mind that we are going to do our very best on each inspection.”

Pay special attention to regulations that may be required of your franchise system.

Regulations have a large role in both the real estate and home improvement franchise industries. Franchisees are ultimately responsible for following all laws, rules and regulations that apply to where their franchise is located.

Franchise system requirements may have slight variances, but most have many similarities. For instance, mostly all real estate franchisees are required to maintain a valid real estate broker license, or employ a licensed broker to remain compliant.

Prospective home improvement industry franchisees may be required to obtain construction or contractor licenses or permits. Again, license and permit requirements vary depending on the laws, ordinances and regulations present where the franchised business is located.

The financial element of investing in a franchise can be broken down into two segments: the initial investment and ongoing fees, which are summarized below.

The Initial Investment

Investment costs vary for different franchises depending on the particular business system and execution requirements. The graph below compares initial costs associated with opening one of the 14 sample franchises presented and also gives an average. The median estimated minimum investment for the 14 sample franchises is $60,675 and the median high estimate is $152,550.

Note that some franchises do not include real estate/rent costs in their estimates because of franchise requirements and the variability of real estate/rent costs in different locations.

Real Estate and Home Improvement Franchise

Initial costs associated with opening a franchise include the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening marketing costs, and more. 

A significant cost within the initial investment is the franchise fee. This part of the overall initial investment grants franchisees the right to use the franchisor’s trademarks, service marks and other branding. It also provides access to the franchisor’s business system, including training opportunities. Franchise fees can vary based on whether the franchise is a conversion from an existing independent operation, on the size of territory the franchisee is to receive, or on if the franchisee is a military veteran.

Franchise

Franchise Fee

1-800-GOT-JUNK? 

$30,000

Budget Blinds 

$14,950

Century 21 

$0-$25,000

CertaPro Painters 

$52,500

Coldwell Banker Residential 

$25,000

Engel & Volkers

Minimum of $35,000

HouseMaster 

$42,500

Mr. Handyman 

$19,900

Re-Bath 

$30,000-$115,000

RE/MAX 

$10,000-$24,000

Real Property Management 

$20,000-$40,000

The Grout Doctor 

$12,000-$16,000

TruBlue Total House Care 

$38,900-$44,900

WIN Home Inspection 

$17,000-$27,000

Ongoing Costs

Throughout the length of the agreement there will be costs for being a part of the franchisor’s business system. These costs include items such as royalty fees, charges for technical support and marketing costs. Most of the franchises profiled have an initial franchise term length of 10 years.

The most common is the royalty fee and below is a look at royalty rates for each of the sample franchises.

Franchise

Royalty

1-800-GOT-JUNK

8% of Gross Revenue

Budget Blinds

Monthly payment:
$300 - months 1-6
$700 - months 7-12
$1,100 - months 13 - 24
$1,500 thereafter

Century 21

6% of Gross Revenue; Gross Revenue from Property Management separately assessed with a Royalty Fee equal to 1.5%

CertaPro Painters

Greater of 5% of Gross Sales or required minimum royalty payment

Coldwell Banker Residential

6% of Gross Revenue; Gross Revenue from Property Management separately assessed with a Royalty Fee equal to 1.5%

Engel & Volkers

6% of Net Commissions or $1,000 per month, whichever is greater

HouseMaster

5% to 7.5% of Gross Sales per year based on a sliding scale; franchisee must pay minimum monthly royalty fee

Mr. Handyman

7% of Gross Sales less material revenue generated

Re-Bath

Greater of 4% to 6% of Gross Sales or Minimum Royalty Fees; special rates apply to conversion franchises

RE/MAX

Minimum $134 per month for each Sales Associate in the office

Real Property Management

7% of Gross Sales less maintenance revenues or $250, whichever is greater

The Grout Doctor

6% to 9% of monthly Gross Sales based on a declining scale or a minimum payment of approximately $575 to $1,500

TruBlue Total House Care

Greater of 6% of Gross Revenues or $300 per month

WIN Home Inspection

6% to 7% of monthly Gross Revenues with varying monthly minimums

Royalties for Sample Real Estate & Home Improvement Franchises

In addition to regularly assessed fees, other fees are charged on an “as needed” basis such as audit fees or costs for additional training. Prior to investing, prospective franchisees should do their research and carefully review a franchisor’s FDD for more detailed information on all systems, procedures and costs.

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Handyman Franchises...

Mr. Appliance Our market is not seasonal, not cyclical, it’s just consistent - perfect for building a very predictable business. Read More Min. Cash Required:
$50,000.

Sears Handyman Solutions A handyman franchise from the nation's largest provider of home services. Read More Min. Cash Required:
$50,000.

Outback GutterVac Poised to become the premier gutter cleaning brand nationwide, partner with Outback GutterVac! Read More Min. Cash Required:
$50,000.


Kitchen Solvers Kitchen Solvers has over 30 years of experience as the premiere franchise for total kitchen remodeling solutions.... Read More Min. Cash Required:
$75,000.

TruBlue Total House Care Led by one of America’s top franchisors, TruBlue’s executive team has decades of experience in the senior and home... Read More Min. Cash Required:
$45,000.


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