How To's
Complete Franchise Cost Breakdown of CENTURY 21
Real estate can be a very competitive industry. Don’t believe us? Just ask the 1.4 million members of the National Association of REALTORS (NAR). It’s no wonder that the prospect of opening a real estate franchise like CENTURY 21 looks more promising than starting from scratch. In this article, we’ll discuss the CENTURY 21 franchise cost as well as the duties that come with the business. We’ll also give you a few fun facts you might want to know about the brand. So, let’s dig right in.
Franchise Description
When it comes to experience in the real estate industry, CENTURY 21 is golden. The company started in 1971 and started franchising a year after. With almost half a century of real estate franchising under the belt, they’ve seen the best and worst of times, so to speak.
Given its tenure, it’s not shocking to know that it already spawned over 8,000 franchise brokers across 80 countries and territories. The franchisor, CENTURY 21 Real Estate LLC, has its headquarters in Madison, New Jersey, and operates as a subsidiary of Realogy Group and Realogy Holdings.
Most franchise applicants are owners of existing real estate offices. However, the franchisor may also offer a franchise to newly established brokerages in certain situations.
Training Overview
Besides the CENTURY 21 franchise cost, applicants also need to invest time and effort into the business. The franchisee or a designee (possibly an office manager) needs to attend the International Management Academy (IMA) Program in NJ. The program, which lasts for three and a half days, could be held at the main office, a local hotel, or an off-site location.
Aside from the initial training program, the brand also offers continuous assistance through online and written communications. In the same vein, the franchisee can consult the franchisor via phone or in-person for any business concern. There may also be extra training programs designed to keep all offices on the same page when it comes to service standards.
Obligations and Restrictions
Aside from the CENTURY 21 franchise cost and required training, there are also obligations to comply with. For instance, the brand requires franchisees to participate in managing the business. Also, the franchisee must have a “Responsible Broker.” Along with the office manager, this person needs to comply with laws, rules, and regulations.
The brand also requires equity interest holders to sign a Guarantee of Payment and Performance. The franchisees must meet quality service that adheres to standards. Added to that, the franchisor may come up with a client survey to monitor an office’s service quality.
The initial franchise term lasts for ten years, starting on the opening date of the office. However, the franchisor may negotiate either a greater or a lesser period under the franchise agreement. There are no renewal rights, but if the franchisor grants an extra term, the franchisee must sign a term extension addendum with different terms.
As for granted territory, the franchisee must operate the business only from the office stated in the agreement. The head office will not allow other offices within a quarter-mile radius of an existing location. However, franchisees can seek buyers or listings in any area.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $0 | $25,000 |
| Real Estate and Improvements | Not included in total | |
| Leasehold Improvements | $0 | $105,000 |
| Computer Equipment and Electronic Data System | $5,000 | $10,000 |
| Signs – Exterior | $800 | $20,000 |
| Signs – Yard, Open House and Rides | $2,000 | $5,000 |
| Name Badges (approx. 7 to 70) | $150 | $750 |
| Miscellaneous | $250 | $500 |
| Other Advertising – 3 Months (Not required) | $0 | $10,000 |
| Legal Expenses | $0 | $4,000 |
| Office Supplies | $1,000 | $7,500 |
| Website | $0 | $30,000 |
| Multiple Listing Services | $0 | $2,000 |
| Data Fees Transmission | $0 | $5,000 |
| International Management Academy (IMA) | $0 | $1,800 |
| Insurance Deposits and Premiums | $500 | $2,500 |
| Additional Funds (3 Months) | $15,000 | $40,000 |
| ESTIMATED TOTAL FOR CONVERSION OFFICE | $24,700 | $269,050 |
| Additional Fees for Start-Up Office | ||
| Facility and Space Planning | $9,000 | $17,500 |
| Security and Other Deposits | $7,500 | $17,700 |
| Furnishings and Communications Equipment | $27,000 | $87,500 |
| Prepaid Business Expenses | $3,000 | $4,600 |
| Additional Funds – First 3 months after opening | $35,000 | $60,000 |
| ESTIMATED TOTAL FOR A START-UP OFFICE | $106,200 | $456,350 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 6% of gross revenue, except that gross revenue for Property Management Services is assessed separately with a Property Management Fee equal to 1.5% of gross revenue. |
| Property Management Fees | 1.5% of gross revenue from Property Management Services. |
| Minimum Monthly Royalty Fee | $500 per month. |
| Minimum Annual Royalty Fee | Varies by location. |
| Brand Marketing Fund Fee (BMF) | PROGRAM A: 2% of monthly Gross Revenue up to $3,000,000; 0.5% of Gross Revenues over $3,000,000.PROGRAM B: 2% of monthly gross revenue, subject to a monthly minimum of $708 and maximum of $1,925. |
| CRM and Consumer Platform | As of the issuance date of this disclosure document, franchisees will not be required to pay a separate fee to use the CRM and Consumer Platform , although we reserve the right to require payment of reasonable fees to the franchisor, or an affiliate, for the use of the CRM and Consumer Platform (or enhancements thereto). |
| Lead Management System | $0 to $5,000 per year. |
| Computer Hardware and Software Maintenance and Support | $1,000 to $2,000 or more per year. |
| International Management Academy Fee (IMA) | $399 per attendee – the fee includes tuition, lodging and function meals only. |
| Other Education Fees | Varies by course and duration. |
| Audit Fees | Cost of audit plus fees past due, interest, late charges and costs. |
| Liquidated Damages | See FDD. |
| Special Assistance | As negotiated. |
| Late Charges and Interest | All past due payments will bear interest at the highest legal rate (not to exceed 1.5% per month) plus the highest allowable legal late charge. |
| Transfer/Assignment Fee | $5,000 |
| Costs and Attorney’s Fees | Will vary. |
| Taxes | Will vary. |
| Indemnification | Will vary. |
| Relocation/Improvement Fees | Will vary. |
| Insurance | Cost of Insurance |
| Product/Service Fee | Will vary. |
| Testing/Inspection Fees to Approve Supplier | The franchisor does not currently charge fees for approval of a supplier, but it has the right to charge reasonable testing and inspection fees. |
| Limited Purpose Office Initial Franchise Fee | $1,000 |
| One21 | $469 – $669 per registrant for One21, depending upon when franchisees register. |
Did You Know?
Here are a few fun facts about CENTURY 21 you should know while trying to decide if it’s the right franchise for you:
- The company knows that many house sellers and buyers are hesitant to trust real estate agents. Not to mention, they try to counter clients’ skepticism with brand awareness. Because more people are familiar with the CENTURY 21 brand, they’re more likely to trust realtors affiliated with it.
- With the real estate industry already saturated, the company adopted a new mission – to defy mediocrity and deliver extraordinary experiences. This new mission powers them and their system members to be relentless in serving clients and strengthening the brand.
- The brand has launched CENTURY 21 University to fulfill its goal of empowering brokers, managers, and sales associates. It’s a platform that provides programs designed to help improve skills, knowledge, and habits. It offers certifications with the National Association of REALTORS®, so it’s an awesome training treasure trove.
- There are five basic benefits of being under the brand: global exposure, full training, in-market support, marketing, and the scale and buying power of a global partner.
- Alongside working hard to maintain its position as an industry leader, the company also lends a hand to the needy. In fact, in 2018, the brand raised over $3 million for Easterseals, a group that offers indispensable resources for people and families facing disabilities. The brand has been an Easterseals ever since, and has raised over $123 million since 1979.
While mulling over the CENTURY 21 franchise cost, it’s also crucial to consider the perks you’ll get in return. If you’re aiming to run a business that pushes your team to be better, then CENTURY 21 is surely worth the investment.