HomeVestors of America

Franchise fee: $42,500 to $85,000 depending on franchise type (Associate vs. Full Franchise).

Royalty: transaction-based, tiered by annual volume. You pay 3% of each property's sale price if you close 1–4 properties/year; 2% at 5–9/year; 1.5% at 10–14; 1.25% at 15–19; 1% at 20–24; and 0.8% at 25+ properties/year. This structure heavily rewards high-volume operators — a $300K sale at 3% costs $9,000; at 0.8% it costs $2,400.

Monthly fee: $399/month regardless of transaction activity. This is your fixed overhead above all other operating expenses.

Total investment: $107,500 to $477,250. The wide range reflects market entry costs (advertising spend to generate motivated seller leads is the single largest variable), working capital, and franchise type.

HomeVestors' Item 19 measures Gross Price Differential (GPD) — the difference between total property sale prices and total purchase prices — across 898 franchises operating the full 12 months of 2024. This is not traditional gross revenue; it excludes renovation costs, commissions, and holding costs, which can consume 30–60% of GPD on distressed property investments.

Overall: average GPD $616,948, median $344,550. But the distribution tells the real story: top quartile (225 franchisees) averaged $1,737,830 GPD; the bottom quartile had median GPD of $0 — many franchisees had no property sales during the year. Average advertising spend was $72,573, which must come out of GPD before any profit calculation.

System shrank from 1,092 to 1,003 franchisees between 2023 and 2024 — an 8.2% unit count decline in one year. That's significant churn.

HomeVestors contracted notably: 1,003 units at end of 2024 versus 1,092 in 2023. A drop of 89 franchisees in one year is a meaningful system signal. Distressed property investing is highly sensitive to interest rates and buyer demand — the 2023–2024 rate environment raised holding costs and compressed margins across all real estate investment operators, and HomeVestors franchisees are not insulated from that.

The brand's recognizable 'We Buy Ugly Houses' marketing generates motivated seller leads nationally, which is the core value proposition. Without that lead flow, a franchisee is just another unknown real estate investor. The question is whether the brand's lead generation value justifies the transaction royalties plus monthly fees during challenging markets.

The bottom-quartile median GPD of $0 deserves full attention. This means that in 2024, a significant portion of HomeVestors franchisees completed zero net property sales. Real estate investment franchising is not passive — franchisees who don't actively work the lead pipeline and convert acquisitions to sales will produce nothing, and still owe the $399/month fee.

GPD is not the same as profit. HomeVestors explicitly notes that GPD excludes repair costs, commissions, and holding costs. A franchisee with $344,550 in median GPD who spends 40% on renovations and commissions nets roughly $207,000 before their $72,573 in advertising costs, the $399/month base fee, and royalties. Net income from operations could be materially less than GPD suggests.

The system's 8.2% unit count decline in 2024 — from 1,092 to 1,003 — is a significant red flag to investigate. Ask the franchisor directly about the cause: were these terminations, non-renewals, or voluntary exits? A market-cycle explanation is more benign than a structural problem with franchisee profitability.