Verified — real FDD extraction
Not found in the SBA Franchise Directory — SBA financing may be unavailable; verify with your lender
HOMEVESTORS
Other · independent · est. —
HomeVestors, known for its We Buy Ugly Houses marketing, is a real estate investment franchise whose operators buy houses directly from sellers, typically distressed or dated properties, for renovation and resale or rental. A franchisee runs a house-buying business, generating seller leads, making cash offers, and managing rehab and disposition of acquired homes.
HOMEVESTORS net unit count grew +1.9% from 2019–2021 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse.
Exit rate · latest year
8.9%
fiscal 2021, per Item 20
Cost to open
$80K–$456K
Item 7 total investment range
SBA loan defaults
No loan record
no SBA 7(a)/504 loans found for this brand
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2019–2021
Survival record
FDD Item 20 · outlet status by year
In fiscal 2021, 102 of 1,146 franchised outlets left the system — a 8.9% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2019 | 2020 | 2021 |
|---|---|---|---|
| Outlets at start | 1,055 | 1,132 | 1,146 |
| Opened | 138 | 142 | 108 |
| Transfers | 81 | 87 | 79 |
| Terminations | 55 | 95 | 78 |
| Non-renewals | 6 | 32 | 24 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 0 | 1 | 0 |
| Outlets at end | 1,132 | 1,146 | 1,153 |
| Net change | +77 | +14 | +7 |
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $80K franchise fee (Item 5) and a total investment of $80K–$456K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$80K–$456K
all-in investment range
Franchise fee (Item 5)
$80K
upfront, one-time
Royalty (Item 6)
—
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$0
0% of sales, before profit
Over a 10-yr term
$0
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for HOMEVESTORS with an independent CPADistress signals
news-sourced · bankruptcies, closures, lawsuits
Dallas’ HomeVestors Sues HGTV Over Its ‘Ugliest House in America’ Show
news:Dallas Innovates · 45mo ago
8 questions to ask a HOMEVESTORS franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These are the questions built from what HOMEVESTORS has actually disclosed — each one carries the number it came from, so you can tell whether the answer squares with the record.
- 01
HOMEVESTORS’ own Item 20 shows 102 of 1,146 franchised outlets left the system in fiscal 2021 — about 8.9%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2021
- 02
79 units transferred to new owners in fiscal 2021. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Transfers count as neutral in every ranking. They are the single easiest place to hide distress.
FDD Item 20 · FY2021
- 03
HOMEVESTORS makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2026
- 04
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 05
Item 3 discloses 7 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2026
- 06
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 07
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 08
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if HOMEVESTORS’ numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is paid by the franchisor to place you. I'm paid by you — and the job is pressure-testing HOMEVESTORS's numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
HOMEVESTORS franchise questions, answered from the filings
What percentage of HOMEVESTORS franchises closed last year?
In HOMEVESTORS's latest FDD Item 20 (fiscal 2021), 102 of 1,146 franchised outlets left the system — an annualized exit rate of 8.9%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a HOMEVESTORS franchise cost?
Per HOMEVESTORS's 2026 FDD, buying in requires an initial franchise fee of $80K (Item 5) and a total initial investment of $80K–$456K (Item 7).
Does HOMEVESTORS disclose earnings (Item 19)?
Yes — HOMEVESTORS makes a financial performance representation in Item 19 of its 2026 FDD, reporting a median unit volume of $328K. Read it closely: franchisors choose which units and which metrics to include.