HomeVestors Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$89,000

-

$456,000

OPERATING PROFIT

Unlock

Adam

Updated

February 27, 2024

Is

HomeVestors

a franchise?

Yes,
HomeVestors
is a franchise and
currently
accepts
franchise
applications

HomeVestors, widely recognized by its "We Buy Ugly Houses®" slogan, is a prominent player in the real estate investment franchise industry. The company offers a unique business model that focuses on buying, rehabbing, and selling or renting out houses, differentiating itself through a strong national brand presence and a comprehensive support system for franchisees.

Founded in Dallas, Texas, HomeVestors began its journey in the real estate market with a vision to provide solutions for homeowners looking to sell their properties quickly, regardless of their condition. This approach not only serves homeowners in distress but also contributes to neighborhood revitalization and provides investment opportunities.

HomeVestors started franchising in 1996, allowing entrepreneurs to be part of the growing real estate investment sector by leveraging the company's proven system and brand recognition. The franchise offers extensive training and support, including marketing strategies, lead generation, financing for property purchases and repairs, and a mentorship program, making it accessible for individuals with varying levels of real estate experience.

What sets HomeVestors apart from the competition is its commitment to ethical business practices and its focus on providing "solutions for ugly situations®" to homeowners. The franchise's model is designed to assist franchisees in navigating the complexities of real estate investing, ensuring they can operate responsibly and profitably in their local markets.

How many

HomeVestors

franchises

are there?

In 2022, there were
1155
outlets in the United States, of which
1155
are franchises, and
0
are corporate-owned.

What are the

HomeVestors

franchise

fees?

Initial franchise fee

$85,000

Royalty fee

0.8% to 3%

Advertising fee

$1,000 to $5,000 per month

Initial Franchise Fee

The Initial Franchise Fee is $85,000 paid in cash.

Advertising Fee

For advertising, there is a requirement to spend a minimum amount on local advertising. If this minimum is not met, a Level 2 franchise must contribute $200 to the Marketing Fund or NAF for each month the minimum is not met.

Marketing Fund

A $1,000 contribution to the Marketing Fund or NAF is required for each Sale Transaction, Assignment Transaction, and Hold Transaction. This is in addition to the required minimum local advertising expenditure.

Lease or Rent Fee

Leasehold Improvements range from $0 - $5,000 as agreed with the lessor or vendor. This suggests costs associated with leasing or renting space for the franchise.

Transfer Fees

The Transfer Fee is $7,500 for an Associate Franchise and $17,500 for a Full Franchise. There are administrative fees for certain types of transfers, such as between original owners, not exceeding a 10% ownership interest, or to an entity wholly owned by the original owners, with a minimum of $750 to cover reasonable costs and expenses.

Renewal Fees

The Renewal Fee is $2,000 unless you are at or above Level 3, in which case the fee is waived.

How much does

it cost

to start a

HomeVestors

franchise?

It costs between
$89,000
and
$456,000
to start a
HomeVestors
franchise.
Type of Expenditures Amount
Initial Franchise Fee $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 $30,000 - $140,000
Training Expense $1,800 - $6,000
iPad and Computer Equipment $2,000 - $10,000
Insurance $2,000 - $8,000
Miscellaneous Opening Costs $1,000 - $7,900
Purchase and Repair of Properties $13,000 - $129,000
Additional Funds for 6 Months $0 - $50,000
Total Estimated Initial Investment $135,000 - $456,250

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

HomeVestors

provide

training

to its

franchisees?

Yes,
HomeVestors
provides training to its franchisees.

The franchisor provides comprehensive training to franchisees, covering various aspects of operating the HomeVestors business. The training includes:

  • Initial Training: Conducted within 90 days of the Effective Date, this program is mandatory for the franchisee, their owners involved in the operation, and designated employees or independent contractors. It covers the operation of a HomeVestors Business and is held at the franchisor's designated training facility or virtually. The training spans 5 days and includes topics such as management, goal setting, time management, web site functionality, and more. All attendees are responsible for their travel and living expenses during the training.
  • In-Field Training: For Associate Franchisees, eight hours of in-field training are provided by a Development Agent, acting as a mentor. This training includes property acquisitions, marketing, comparable programs, property valuations and rehab, and contract management. It must be completed within three months after signing the Franchise Agreement.
  • Supplemental Training: Franchisees, their owners, and employees may be required to attend advanced, sales, refresher, and other additional training programs designated by the franchisor. These programs could include updates to the System, new products introduction, and other relevant topics. The franchisor may charge reasonable fees for such training, and attendees are responsible for their travel and living expenses.
  • Annual Convention: Franchisees are required to attend, participate in, and pay the registration fees for each annual convention designated by the franchisor. At least one attendee per franchise must pay the registration fees, and all travel and living expenses for attending the convention are the franchisee's responsibility.

Does

HomeVestors

provides

territory

protection?

The franchise agreement for HomeVestors does not offer exclusive territory rights to franchisees. The document explicitly states that the territory assigned to a franchisee is not exclusive for any purpose. This means the franchisor may grant additional franchises or operate its own businesses within the same territory as an existing franchisee.

Franchisees are expected to devote their best efforts to promote the sale of products and services throughout their territory but must be aware that they may face competition from other HomeVestors businesses, including those operated by the franchisor or other franchisees within the same territory. Additionally, the franchisor retains the right to sell any of the products and services within any territory​​.

Can a

HomeVestors

franchise

be run as

a passive

investment?

The franchisor requires the managing owner to personally participate, either full or part-time, in the direct operation of the HomeVestors Business. The managing owner is expected to hold an equity interest in the franchise, use their best efforts to promote and enhance the sale of products and services within their territory, and faithfully, honestly, and diligently perform their obligations under the Franchise Agreement.

Additionally, the managing owner is required to not engage in any other business or activity that conflicts with their obligations under the Franchise Agreement. This indicates a significant level of involvement is expected from the franchisee in the day-to-day operations of their franchise​​.

Related Posts