1st Class Real Estate Franchise Cost, Revenue & Review 2026
- Investment
- $50K – $159K
- Disclosed sales
- $588K
- gross sales, not profit
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
1st Class Real Estate is a residential real estate brokerage franchise offering agent-friendly commissions and support. Franchisees run local brokerages, recruiting agents and managing listings, sales, and transactions.
FranchiseVerdict summary · 2026
A 1st Class Real Estate franchise requires a total initial investment of $50K – $159K, including a $25K franchise fee. Per the 2026 FDD, average unit revenue was $588K[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2026 filing · Data extracted: · Last cited check: · Staleness risk: low - the current year's filing
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored6 of 6 headline figures on this page cite a page of the filing.
Overview
- Investment
- $50K – $159K
- 32nd pct Real Estate
- Avg gross sales
- $588K
- 8th pct Real Estate
- Royalty
- Flat fee
- Units
- 70
- 44th pct Real Estate
- SBA charge-off
- N/A
Quick verdict · Real Estate · color = vs category peers
Green = favorable by >10% vs Real Estate median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $50K – $159K including a $25K franchise fee.
- RETURNSAverage unit revenue of $588K/year (median $168K).
- RISKVerdict C (Average), verdict score 40/100 (higher is better).
- GROWTHNegative: net -34 franchised outlets in the latest year (1 opened, 6 closed); 2 signed but not yet open (Item 20).
- FLAG6 units terminated last reporting year (8.6% of the system). Ask existing franchisees why.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- 1st Class Franchising, LLC d/b/a 1st Class Real Estate
- Parent company
- 1st Class Holding Inc.
- FDD Item 1, page 9 of the 2026 FDD
- Predecessor
- 1st Class Properties LLC
- Prior franchisor entity
- CEO title
- CEO and Manager
- Rhyan Finch
- CEO experience
- 13 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- FL
- HQ
- 6330 Hollywood Blvd, Sarasota, FL 34231
- Auditor
- Barnes, Brock, Cornwell & Painter PLC
- Audited financials
- Franchisor revenue
- $2.9M
- vs $2.8M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Rhyan Finch
- Headquarters
- FL
- Founded
- 2018
- FDD year
- 2026
- States available
- 8
Can you afford it, and what does the money buy?
Entry cost runs 21% below the typical real estate franchise.
Source: FDD 2026 · Items 5–7
published investment is a single 1st Class Real Estate full-service real estate brokerage office. The franchisor also offers an area-representative grant under a separate FDD (1st_Class_Real_Estate_Area_Representative_NASAA_480398.pdf, 2026): fee $20,000-$50,000, estimated initial investment $23,500-$63,500; that offering is not priced on this page. The same filing also prices: Virtual Model $31,050-$43,450.
Full Item 7 breakdown12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee (Note 1) | $25K | $25K | |
| Initial Training and Onboarding Fee (Note 2) | $950 | $950 | |
| Leasehold Improvements (Note 3) | $5K | $30K | |
| Rent and Security Deposit (Note 4) | $500 | $10K | |
| Signage (Note 5) | $500 | $10K | |
| Equipment and Furniture (Note 6) | $5K | $50K | |
| Computers and Software (Note 7) | $4K | $8K | |
| Start-up Supplies/Advertising Materials (Note 8) | $2K | $3K | |
| Insurance (Note 9) | $1K | $2K | |
| Professional Fees (Note 10) | $2K | $4K | |
| Licensing costs (Note 11) | $500 | $3K | |
| Additional Funds-3 months (Note 12) | $4K | $15K | |
| Total initial investment | $50K | $159K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $50K – $159K
- Top 40% of category vs category
- Liquid capital req'd
- $4K – $15K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- No percentage-of-sales royalty. Continuing fees are a Clo…
- Ad fund
- 0.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty (flat) | No percentage-of-sales royalty. Continuing fees are a Closed Transaction Fee of $150 per transaction (for each buyer and seller your office represents that closes on a property and for each referral fee your office receives) and an Office Fee of $150 per month, both due monthly on the 10th. |
| Marketing / ad fund | 0.0% |
| Technology fee | $50 |
| Training fee | $500 |
| Transfer fee | $2K |
| Renewal fee | $5K |
| Inventory (initial) | $2K – $3K |
What do units actually make?
Average unit sales run 53% above the real estate norm.
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for 1st Class Real Estate until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for royalty rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$114K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one 1st Class Real Estate unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for royalty rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for royalty rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
- Avg gross sales
- $588K
- Per unit, per year
- Median gross sales
- $168K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- 2025 Historical FPR, Franchised Outlets: Cumulative (All Outlets) table of Average (Median) Total Gross Commissions for the 63 franchised outlets that operated the entire calendar year 2025 (top/middle/bottom-third tables of 21 outlets each also printed)
- Sample size
- 63 outlets
- vs category median 53
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
Compared against 101 Real Estate brands
Revenue is 5.6x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $588K/year in gross sales. Median is $168K — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 5.6x.
Disclosure
Transparency score 0/10 — minimal disclosure beyond the required average. Hard to judge the distribution of outcomes across units.
Operator retention
System contracting at -21.7% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
67% of franchisees own multiple units — high repeat-buyer rate signals strong unit economics and operator satisfaction.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Real Estate medians
How 1st Class Real Estate Compares
Category median of published Real Estate brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 70
- Opened
- 1
- Last reporting year
- Closed
- 6
- Terminated
- 6
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 33.3%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 66.7%
- Net growth (3-yr)
- -21.7%
- Net unit change over 3 years
- 3-yr CAGR
- -21.7%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 6
- Not renewed
- 0
- Signed, not yet open
- 2
- 0.03 per open outlet · Item 20 Table 5
- Projected new
- 22
- Franchisor's next-year forecast
- Termination rate
- 33.3%
- Franchisor-initiated terminations
- Ceased ops
- 33.3%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 10 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
23 current owners across 10 states.
- VA 7
- FL 5
- AZ 3
- AL 2
- CA 1
- CO 1
- GA 1
- MO 1
- NJ 1
- WI 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Rapidly contracting franchise system with hidden financials, unstable franchisor status, unprotected territory, and unclear profitability—high risk of franchisee failure.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
Item 3 states that no litigation is required to be disclosed. No pending action, prior action or government proceeding is listed against the franchisor or any Item 2 person.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Barnes, Brock, Cornwell & Painter PLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited financial statements of 1st Class Franchising, LLC (the franchisor itself) for the fiscal year ended December 31, 2025 (audit report by CBX Inc, Denver, dated March 12, 2026), plus separately audited statements for FY2024 and FY2023; the FY2025 balance sheet, income statement and cash-flow pages are image-only.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 40 / 100 verdict
- 01MEDSevere unit decline of 21.7% YoY (23 units) suggests system contraction and franchisee struggles
- 02MINORUnprotected territory creates direct competition risk between franchisees and cannibalization concerns
- 03MINORHigh royalty variability (10-50% of ongoing fees) with unclear fee structure creates unpredictable cost burden
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory sizeℹ | four (4) mile radius from the location of your 1st Class Real Estate Office (Standard Model; Virtual Model receives no defined territory) |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | No |
| Arbitration location | Sarasota, Florida |
| Jury trial waiver | Yes |
| Governing law | FL |
| Litigation count | 0 |
View Item 3 litigation summary
Item 3 states that no litigation is required to be disclosed. No pending action, prior action or government proceeding is listed against the franchisor or any Item 2 person.
Items 10, 11
Training & Operations
- Classroom training
- 22 hrs
- On-the-job training
- 0 hrs
- Training location
- Online (self-paced modules) and live webinars
- Ongoing training
- Optional
- Field support
- 0 hrs/yr
- On-site visits per year
- Time to open
- 3 mo
- From signing to launch
- Franchisor financing
- Offered
- Item 10
- POS system
- Brokermint, Salesforce, Google Suite
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Brokermint, Salesforce, Google Suite
Item 20 · call current owners
Franchisee Contacts
23 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a 1st Class Real Estate franchise?
The total investment to open a 1st Class Real Estate franchise ranges from $50K – $159K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do 1st Class Real Estate franchise owners earn?
According to Item 19 of the 1st Class Real Estate FDD, the average gross sales per unit is $588K. The median is $168K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns 1st Class Real Estate?
1st Class Real Estate is franchised by 1st Class Franchising, LLC d/b/a 1st Class Real Estate. Its parent company is 1st Class Holding Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the 1st Class Real Estate FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the 1st Class Real Estate FDD and qualifies whose outlets they describe.
What is 1st Class Real Estate's franchise failure rate?
SBA 7(a) loan charge-off data is not available for 1st Class Real Estate (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many 1st Class Real Estate franchise locations are there?
As of their most recent FDD filing, 1st Class Real Estate has 70 total units in the United States, including 70 franchised units and 0 company-owned units. 1 new units were opened in the latest reporting year.
Is 1st Class Real Estate a good franchise to buy?
FranchiseVerdict rates 1st Class Real Estate as a C-grade franchise with a verdict score of 40 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent 1st Class Real Estate, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.