HomeVestors of America Franchise Costs, Fees & FDD

Year Business Began: 1996

Franchising Since: 1996

Headquarters: Dallas, Texas

Estimated Number of Units: 1,005

Franchise Description: HomeVestors of America, Inc. is the franchisor. The franchises offered are for the right to operate a business to buy, sell and rehabilitate residential and commercial properties and provide certain services to buyers and sellers. Full franchises have a higher initial fee and lower ongoing fees than associate franchises, either of which may be operated on a full-time or part-time basis. Rehabilitation includes all remodeling and repairs necessary to make the property marketable.
Training Overview: Franchisees, and each of their owners who will be involved in the operation of the HomeVestors business (including their designated managing owner), and each of their employees and independent contractors the franchisor designates, must participate in an initial training program on the operation of a HomeVestors business. The initial training program is five days. All persons required to attend training must successfully complete training to the franchisor’s satisfaction. In the future, the franchisor may require franchisees or their employees to attend advanced, refresher and other additional training programs that will be approximately two to four days in duration. These programs may include improvements to the system, introduction to new products, and other issues.

Territory Granted: Franchisees will not receive an exclusive territory. The franchisor may establish other franchised or company-owned businesses that may compete in the territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. The territory in which franchisees may conduct their HomeVestors business is identified in the Franchise Agreement and is typically all or a portion of a designated market area, metropolitan statistical area, or group of contiguous counties.

Obligations and Restrictions: The managing owner must personally participate, full or part time, in the direct operation of the HomeVestors business, hold an equity interest in the franchise, use his or her best efforts to promote and enhance the sale of the products and services in the entire territory and faithfully, honestly and diligently perform the obligations under the Franchise Agreement. Franchisees must not engage in any other business or activity that conflicts with their obligations under the Franchise Agreement. Franchise owners and their spouses must execute personal guaranties in the forms attached to the Franchise Agreement. Franchisees must offer and sell all the products and services that the franchisor designates for a HomeVestors business. The franchisor may offer products, programs and services that may vary from state to state, and which may not be available in all states. The franchisor may require franchisees to qualify for some programs. The franchisee’s qualification may depend upon the successful completion of training classes, proof of financial capability or being current with their obligations to the franchisor and other vendors.

Term of Agreement and Renewal: The length of the initial franchise term is five years. Franchisees may renew their Franchise Agreement if the franchisor continues to maintain a franchise program and if they meet certain requirements and conditions of their Franchise Agreement.

Financial Assistance: The franchisor does not currently offer, directly or indirectly, any financing arrangements to franchisees regarding the initial franchise fee. The franchisor’s affiliate Silver Hill is an approved supplier of interim and permanent financing loans. Silver Hill may apply standards to obtain loans to meet its financing criteria. There is no specific security interest required to be pledged except on the real property franchisees acquire. There are no other lenders affiliated with the franchisor that currently provide financing to its franchisees. The franchisor and its affiliates may arrange financing for franchisees for the purchase and/or repair of real properties, but it is not under any obligation to do so. All financing is subject to market conditions. Franchisees must comply with all the franchisor’s systems and standards in making mortgage loans.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$42,500	$85,000
Leasehold Improvements	$0	$5,000
Furniture, Fixtures and Equipment	$0	$10,200
Signage	$0	$4,200
First Month’s Rent	$0	$2,000
Security Deposit	$0	$2,000
Opening Supplies	$200	$1,950
Advertising	$45,000	$150,000
Training Expense	$1,800	$6,000
iPad and Computer Equipment	$2,000	$10,000
Insurance	$2,000	$8,000
Miscellaneous Opening Costs	$1,000	$13,900
Purchase and Repair of Properties	$13,000	$129,000
Additional Funds for 6 Months	$0	$50,000
ESTIMATED TOTAL	$107,500	$477,250

 
Other Fees

Type of Fee	Amount
Transaction Fees	Franchisees must pay a transaction fee for five different types of transactions as specified in the FDD in the amount specified based on their current level.
Transaction Fee – Purchase Transaction	$500 for each purchase transaction.
Transaction Fee – Assignment Transaction	Greater of (a) $500 or (b) the lesser of (i) the amount determined in accordance with the transaction fee schedule or (ii) 10% of the assignment fee franchisees receive for (x) assigning the contract rights to purchase the applicable property, (y) referring the acquisition of such property, or (z) acting as a broker for the buyer or seller of such property.
Transaction Fee – Sale Transactions	The amount determined in accordance with the transaction fee schedule, less the amount of the transaction fee paid on the purchase transaction for the applicable property.
Transaction Fee – Hold Transactions	The amount determined in accordance with the transaction fee schedule, less the amount of the transaction fee paid on the purchase transaction for the applicable property.
Transaction Fee – Delayed Sale Transactions	The amount determined in accordance with the transaction fee schedule, less the sum of (a) the amount of the transaction fee paid on the purchase transaction for the applicable property and (b) the amount of the transaction fee paid on the hold transaction for the applicable property.
Associate Royalty Fee	Greater of (i) 2% of the sales price for each sale transaction, hold transaction, assignment transaction and delayed sale transaction, but not to exceed 10% of the assignment, referral or broker fee franchisees receive with respect to an assignment transaction, or (ii) $500, but less, with respect to any delayed sales transaction, the associate royalty fee paid on the hold transaction for the same property. In addition, 1% of the after repaired value of each property in the franchisee’s inventory on the date of upgrade to a full franchise.
Monthly Fee	$399 per month.
Local or Regional Marketing/Advertising Council	Level 1 franchisees are not required to advertise, unless their advertising council documents or the NAF require them to contribute to the advertising council or NAF, limited to a maximum contribution requirement of $1,000 per month. Notwithstanding the foregoing, franchisees must spend at least at least $1,000 in any given 6-month period. Level 2 franchisees must spend at least $1,000 per month for local advertising. A Level 2 franchisee may elect to contribute $200 to the marketing fund or the NAF, as the franchisor directs, that month in lieu of spending $1,000 for local advertising unless their advertising council documents or the NAF require them to contribute to the advertising council or NAF, limited to a maximum contribution requirement of $1,000 per month. Notwithstanding the foregoing, franchisees must spend at least at least $1,000 in any given 6-month period. Level 3 franchisees must spend at least $1,000 per month for local advertising. Level 4, 5 and 6 franchisees must spend at least $5,000 per month for local advertising.
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 the franchisor directs, for each month that it did not spend at least $1,000 for local advertising.
Review of Advertising and Marketing Materials	Not to exceed $1,000 per review. Currently, there is no fee for this review.
National Advertising Fund (NAF) Contribution	The franchisor may require franchisees to allocate to the NAF all or any portion of their required contributions to an advertising council or expenditures for local advertising.
Franchise Upgrade Fee	The then-current initial franchise fee for a full franchise, less (a) the initial franchise fee paid for the associate franchise, and (b) all the accrued credits from the payment of the associate royalty fee, but not less than $0.00.
Office Visits	Not to exceed $1,000 per visit.
Technology	Up to $425 per month.
UGVille Proprietary Software Program and Email Addresses	Currently included in the monthly fee is a license of the UGVille software.
Microsoft Office 365 and Email Addresses	Currently the monthly fee includes a license to use the base version of Microsoft Office 365 and up to 4 email addresses. Additional email addresses may be purchased.
DealVestors Website (optional)	Currently, there is no cost for use of this website.
Transfer Fee	$7,500 for an associate franchise, $17,500 for a full franchise.
Resale Lead (Referral) Fee	$22,500
Late Fee	$100 per late fee, report or statement.
Insurance Fee	A reasonable amount based upon the franchisor’s expenses.
Indemnification	Will vary under circumstances.
Interest on Late Payments	Highest contract rate permitted by law or 1.5% per month, whichever is less.
Inspections and Audits (Fee Compliance)	Cost of an audit (plus $1,000 penalty for each transaction fee or other fee not paid within 30 days of closing or due date, as applicable, or each report or other information not furnished within 30 days of due date).
Inspections and Audits (Brand Compliance)	Cost of an audit (plus up to $500 penalty for each violation of Systems and Standards, brand standards or policies or breach of Franchise Agreement).
Training Charges and Late Registration Fees	$200 per person.
Advanced and Other Training	Currently $200 per person.
Annual Convention Fee	Currently $899 per person. A minimum of one fee must be paid.
Renewal Fee	$2,000
Default Fine	Varies depending on circumstances.
Administrative Territory Change Fee	$1,000
Liquidated Damages	$4,000 (representing the transaction fees on 8 purchase transactions) as liquidated damages.
Franchise Marketing Numbers Fee	Currently $25 per month for up to 4 unique phone numbers connected to the franchisor’s call distribution system, plus $5 per month for each additional phone number, or if franchisees want less than 4 phone numbers, $15 per month for the first phone number, plus $5 per month for each additional phone number.
Lead Distribution System Usage Fee	Currently $0.29 per minute for all usage activity on phone numbers connected to our call distribution system.
Contact Center Fee	Varies by number of minutes.
Call Center Fee	Currently $1.35 per minute.
Loan Origination Fee	Currently up to 3% of loan amount, with a $2,000 minimum.
Loan Extension Fee	Currently up to 1% of loan amount.
Repair Draw Fee	Up to $400 per repair draw.
Loan Closing Fee	Currently $949 per loan closing with the franchisor or affiliate.
Document Preparation Fee	Currently $250 per loan closing with the franchisor’s affiliate.
Second Lien Loan Origination / Closing Fee	Currently $1,790 per loan closing with the franchisor’s affiliate.
Second Lien Document Preparation Fee	Currently $250 per loan closing with the franchisor’s affiliate.

The above information has been compiled from the FDD of HomeVestors of America. Year of FDD: 2025.
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