INDUSTRY BENCHMARK · 22 SYSTEMS · FISCAL 2023–2025
Are real estate franchises a good investment?
Across 22 real estate franchise systems, the median system's exit rate in its latest fiscal year was 7.8%, and its opening rate 7.1%. Pooled across systems, with no system counting for more than 20% of the weight, the exit rate was 11.2%. RE/MAX alone is 39% of the sector's franchised base. Median franchise fee: $35K; median royalty: 5.5%; median total investment: $87K–$253K.
There is no official “real estate franchise failure rate.” What franchisors must disclose, in the Item 20 outlet tables of the FDD, is how many franchised outlets were terminated, not renewed, or “ceased operations — other reasons” each year. The exit rate here is that count divided by franchised outlets open at the start of a single fiscal year. It counts exits for any reason (some are retirements, sales, relocations or non-renewals) and misses struggling units that were sold as transfers.
7.8%
22 systems · latest fiscal year each
11.2%
RE/MAX alone is 39% of the sector's franchised base.
7.1%
610 outlets opened in total
22
FDD filed within 24 months
7,904
at latest fiscal year end
$35K
FDD Item 5
5.5%
FDD Item 6
$87K–$253K
FDD Item 7
8/22
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 22 SYSTEMS · 22 FILINGS · FISCAL 2023–2025
| Signal | Brand | Verdict |
|---|---|---|
| STRONGEST RECORD | Keyrenter Property Management | Strong |
| STRONGEST RECORD | REAL PROPERTY MANAGEMENT | Steady |
| STRONGEST RECORD | Property Management Inc. | Steady |
| WEAKEST FILED RECORD | Realty Executives | Weaker |
| WEAKEST FILED RECORD | MOTTO MORTGAGE | Weaker |
| WEAKEST FILED RECORD | HOMEVESTORS | Weaker |
VERDICTS FROM EACH BRAND'S OWN FDD ITEM 20 FILING · METHODOLOGY
Real Estate franchise questions, answered from the filings
How many real estate franchised outlets leave their systems each year?
There is no official failure rate. FDD Item 20 tables report how many franchised outlets were terminated, not renewed, or "ceased operations — other reasons" each year. Across 22 real estate systems, the median system's exit rate in its latest fiscal year (fiscal 2023–2025) was 7.8%; pooled across systems, with no system counting for more than 20% of the weight, it was 11.2%. RE/MAX alone is 39% of the sector's franchised base. Not every exit is a failure: some are retirements or sales.
How much does a real estate franchise cost?
Across the latest FDD filings of 22 real estate systems, the median initial franchise fee is $35K (Item 5) and the median total investment range is $87K–$253K (Item 7).
What royalty do real estate franchises charge?
The median ongoing royalty across 22 real estate franchise systems is 5.5% of gross sales, per Item 6 of their latest FDD filings.
Are real estate franchises growing or shrinking?
In each system's latest Item 20 fiscal year (fiscal 2023–2025), the median real estate system opened new franchised outlets at 7.1% of its starting base and lost 7.8% to exits. For the median system, exits matched or outpaced openings; check individual systems closely.
What is the healthiest real estate franchise?
Of the real estate systems rated from their FDD Item 20 tables, Keyrenter Property Management has the strongest record (verdict: Strong). A verdict describes the filed record, not a recommendation to buy.
A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing the numbers, including talking you out of a bad deal.