Corcoran is officially ready to start selling franchises.
The New York City-headquartered real estate brokerage, under the umbrella of its parent company Realogy, officially filed its franchise disclosure document Dec. 28, which was subsequently approved this week on a state-by-state basis by various state agencies, meaning prospective franchise owners can finally bring the Corcoran brand to their home market.
Corcoran currently has brokerage offices in Manhattan, Brooklyn, The Hamptons and South Florida. But by franchising, parent company Realogy hopes to make money by licensing the brand name out to brokerages across the country.
Prospective franchise owners in Michigan and Indiana can open a Corcoran franchise starting today, Wednesday, January 9. The effective date is still pending in several states that require a franchise disclosure document, but elsewhere, in states that do not require such a document, franchises are available today.
The total initial investment necessary to begin operation of a Corcoran franchise is estimated to cost roughly between $43,850 and $231,200 for a conversion office and $153,350 to $518,500 for a startup office, according to a franchise disclosure document obtained by Inman Tuesday. That figure includes $10,000 to $35,000 that must be paid to the franchisor as an initial franchise fee. The franchise fee of $35,000 is for the first branch office and $10,000 is for each additional office.
“We are excited to begin a dialogue with prospective franchisees who believe the Corcoran brand provides a competitive edge in their market,” Corcoran CEO Pamela Liebman said in a statement.
Additional required fees included in that total cost, include marketing materials, legal expenses, computer equipment, website and branding.
Franchisees will also pay a 6 percent royalty fee, until they cross the $5 million threshold in transaction volume. The fee slides down as volume goes up. Once a franchise hits $40 million in transaction volume, the fee will reach 4 percent and stay there for the rest of the year, but resets to 6 percent when a new year starts.
Franchises will also need to contribute one percent of revenue for a brand marketing fee. That fee goes down to 0.5 percent when the franchise hits $10 million in transaction volume.
“Corcoran is recognized for its client-centric, personal approach and success in marketing and selling properties in the most competitive U.S. markets,” Liebman said. “With the power of the Corcoran brand and the resources and support of Realogy, brokerage firms across the U.S. can now, by aligning with Corcoran, become more competitive, and utilize the brand to help increase their market presence and build their business.”
Realogy announced it would franchise Corcoran along with Climb Real Estate in October 2018. The goal for Corcoran was to expand its footprint to the West Coast and international markets through franchising.
The announcement puts Corcoran and Climb alongside Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, ERA Real Estate and Sotheby’s International Realty in Realogy’s suite of well-known real estate franchises.
“We are pleased to welcome Corcoran into our powerhouse family of franchise brands, which collectively cover the largest share of the residential real estate market,” John Peyton, president and CEO, Realogy Franchise Group said in a release. “They each offer a distinct personality, history, and expertise, fueled by Realogy’s leading technology and unparalleled access to data.”
“We believe Corcoran with its dynamic approach and strong brand recognition will allow us to unlock additional franchisee opportunities, drive productive agent recruitment and ultimately, capture more share of the market,” Peyton added.
Alvaro Cardenas, the senior vice president of global development for Realogy will oversee the Corcoran franchise rollout in U.S. and global markets.