It will cost between $153,350 and $518,000 to open a Corcoran Group franchise, according to newly-filed public documents.
In a franchise disclosure form filed with the Federal Trade Commission, the New York brokerage laid out a series of fees for potential franchisors. Corcoran said this fall it would franchise its name as it seeks to expand to “global megacities,” and leisure markets starting with Miami.
As of this month, the firm is actively selling to prospective franchisors, whose royalties will start at 6 percent but go down as they bring in more revenue.
According to the filing, franchisors will also be required to contribute a percentage of gross revenue for brand marketing — to the tune of 1 percent for those pulling in up to $5 million; 0.75 percent for those grossing $5 million and $10 million; and 0.5 percent for those making more than $10 million.
By going the franchise route, Corcoran may inadvertently compete with its own owned offices, some skeptics have noted. And franchisors will be going up against other Realogy brands, including Century 21, Coldwell Banker and Sotheby’s International Realty.
In the filing, Realogy said franchisors will be able to engage in new development marketing — a notable detail given the dominance of Corcoran Sunshine Marketing Group. Franchisors will pay royalties of 6 percent of new development revenue.
In a statement, Corcoran CEO Pam Liebman said the firm’s brand will provide franchisors a “competitive edge” in their respective markets, “to help increase their market presence and build their business.”
Realogy said Alvaro Cardenas, senior vice president of global development, will oversee the franchise rollout.
Source: The Real Deal Los Angeles