HomeSmart Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
HomeSmart is a residential real-estate brokerage franchise built on a high-efficiency, technology-driven model. Franchisees run offices recruiting and supporting agents, earning from commissions and fees.
FranchiseVerdict summary · 2026
A HomeSmart franchise requires a total initial investment of $66K – $205K, including a $20K franchise fee. The 2026 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 0.0% charge-off rate across 14 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $66K – $205K
- 48th pct Real Estate
- Avg gross sales
- N/A
- Royalty
- N/A
- Units
- 258
- 69th pct Real Estate
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Real Estate · color = vs category peers
Green = favorable by >10% vs Real Estate avg · 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 $66K – $205K including a $20K franchise fee.
- RETURNSItem 21 statements are the parent/guarantor HomeSmart Holdings, Inc. and Subsidiaries (consolidated), which guarantees franchisor HomeSmart International, LLC; the franchisor's own statements are not provided. Figures reported in thousands and scaled x1000. FY ended Dec 31, 2025. Balance sheet reconciles (assets 44,604 = liabilities 35,825 + equity 8,779). Consolidated revenue is predominantly real estate brokerage ($420.3M); franchise revenue only $5.4M and affiliated business services $4.8M (other_revenue). Revenue declined YoY ($458.97M 2024 to $430.61M 2025). Auditor issued a clean/unqualified opinion (no going-concern paragraph). Cover page carries a state-mandated "Financial Condition" risk factor stating the franchisor's condition calls into question its ability to provide services and support.
- RISKVerdict A (Strongest tier), verdict score 71/100 (higher is better). SBA loan charge-off rate of 0.0% across 14 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHSystem growing at 20.6% CAGR over 3 years with 258 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- HomeSmart International, LLC
- Parent company
- HomeSmart Holdings, Inc.
- Predecessor
- and Affiliates
- Prior franchisor entity
- CEO title
- Chief Executive Officer and Founder
- Matt Widdows
- Incorporated in
- AZ
- HQ
- 8388 East Hartford Dr., Suite 100, Scottsdale, AZ 85255
- Auditor
- Richey, May & Co., LLP
- Audited financials
- Franchisor revenue
- $430.6M
- vs $459.0M prior year
Overview
About
- CEO
- Matt Widdows
- Headquarters
- AZ
- Founded
- 2005
- FDD year
- 2026
- States available
- 40
Can you afford it, and what does the money buy?
Entry cost runs 37% below the typical real estate franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $20K | $20K |
| Working capital (3–6 mo) | $25K | $50K |
| Equipment, build-out, other | $21K | $135K |
| Total initial investment | $66K | $205K |
Source: HomeSmart 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $66K – $205K
- Middle of category vs category
- Liquid capital req'd
- $25K – $50K
- Bottom third — review vs category
- Franchise fee
- $20K – $20K
- Top 40% of category vs category
- Royalty
- Greater of ($12/agent/month plus $120 per completed side)…
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 4.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $250 |
| Training fee | $500 |
| Transfer fee | $4K |
| Renewal fee | $10K |
| Total fee load | 4.0% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
HomeSmart did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one HomeSmart unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
56%
Within the 30–60% "attractive franchise" band
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
Item 21 statements are the parent/guarantor HomeSmart Holdings, Inc. and Subsidiaries (consolidated), which guarantees franchisor HomeSmart International, LLC; the franchisor's own statements are not provided. Figures reported in thousands and scaled x1000. FY ended Dec 31, 2025. Balance sheet reconciles (assets 44,604 = liabilities 35,825 + equity 8,779). Consolidated revenue is predominantly real estate brokerage ($420.3M); franchise revenue only $5.4M and affiliated business services $4.8M (other_revenue). Revenue declined YoY ($458.97M 2024 to $430.61M 2025). Auditor issued a clean/unqualified opinion (no going-concern paragraph). Cover page carries a state-mandated "Financial Condition" risk factor stating the franchisor's condition calls into question its ability to provide services and support.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 4.0% — below the Real Estate average of 9.1%.
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
Operator retention
System expanding at 20.6% CAGR over 3 years across 258 units — operators are staying and new ones are joining.
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 averages
How HomeSmart Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 258
- Opened
- 8
- Last reporting year
- Closed
- 0
- Terminated
- 12
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 6.0%
- Company-owned
- 57
- Corporate units in the system
- % franchised
- 78%
- vs corporate-owned
- Net growth (3-yr)
- -2.2%
- Net unit change over 3 years
- 3-yr CAGR
- +20.6%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 8
- Closed (3yr)
- 0
- Terminated (3yr)
- 12
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 2
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 30 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.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 14
- Loan volume
- $8.1M
- Median loan
- $467K
- 50th percentile
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 8
- Defaults
- 0
- Typical loan rate
- 5.5%
- avg rate to borrowers
- Franchised industry avg
- 14.8%
- brand beats franchise avg ↓
- Jobs supported
- 658
- 8.1 per loan
- Lender concentration
- 21%
- top lender's share
Borrower mix: 8% went to startups / new businesses, 92% to established operators
Franchise vs independent — in offices of real estate agents and brokers, franchised businesses charge off at 14.8% vs 29.6% for independents — franchising is associated with 50% lower SBA default risk in this category.
Top lenders financing HomeSmart franchisees
Showing 3 of 8 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into HomeSmart's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 8 lenders with concentration factor
- Per-state charge-off rates across 5 states
- Startup risk premium and job creation velocity
- 8-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.0% charge-off rate across 14 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
HomeSmart presents meaningful caution-level risk: substantial litigation exposure, absence of financial performance data, opaque royalty mechanics, and going concern status undermine confidence despite unit growth and protected territories.
Litigation (Item 3)
Washington State AOD (2020) re no-poaching provisions; Umpa v. HomeSmart et al. (W.D. Mo., filed 2023, antitrust class action re MLS commissions, settled 2024 for $4.7M plus practice changes); Boykin v. HomeSmart et al. (D. Nev., 2024, similar antitrust claims, resolved via Umpa settlement); Zawislak/D'Acquisto v. HomeSmart et al. (N.D. Ill., antitrust claims re inflated home prices, pending, HomeSmart denies wrongdoing).
Largest disclosed settlement: $4,700,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Richey, May & Co., LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 71 / 100 verdict
- 01HIGHSignificant litigation portfolio including tortious interference, class action MLS disputes, TCPA violations, and no-poaching Assurance of Discontinuance—indicating operational and compliance risks
- 02MINORNo Item 19 financial disclosure (Avg Revenue and Net Income not provided)—impossible to assess actual franchisee profitability against $65.5K–$205K investment range
- 03MINORComplex royalty structure with $12/agent/month minimum plus $120/side plus $500/month floor creates unpredictable profit scenarios and potential margin compression
- 04HIGHGoing concern notation suggests parent company financial stress despite 14.5% unit growth, raising sustainability questions
- 05MINORModest unit growth (262 units, 14.5% YoY) in mature real estate franchise segment; growth rate does not offset litigation and disclosure gaps
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 4.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Arizona |
| Jury trial waiver | Yes |
| Governing law | Arizona |
| Litigation count | 4 |
View Item 3 litigation summary
Washington State AOD (2020) re no-poaching provisions; Umpa v. HomeSmart et al. (W.D. Mo., filed 2023, antitrust class action re MLS commissions, settled 2024 for $4.7M plus practice changes); Boykin v. HomeSmart et al. (D. Nev., 2024, similar antitrust claims, resolved via Umpa settlement); Zawislak/D'Acquisto v. HomeSmart et al. (N.D. Ill., antitrust claims re inflated home prices, pending, HomeSmart denies wrongdoing).
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 0 hrs
- Training location
- Scottsdale, Arizona (corporate headquarters) or another location designated by Franchisor
- Ongoing training
- Required
- Time to open
- 4 mo
- From signing to launch
- Site selection
- franchisee
- Franchisor financing
- Not offered
- Item 10
- POS system
- RealSmart Broker TM
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: RealSmart Broker TM
Item 20 · call current owners
Franchisee Contacts
86 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
HomeSmart · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a HomeSmart franchise?
The total investment to open a HomeSmart franchise ranges from $66K – $205K, with an initial franchise fee of $20K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do HomeSmart franchise owners earn?
HomeSmart does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Item 19 in the HomeSmart 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 HomeSmart FDD and qualifies whose outlets they describe.
What is HomeSmart's franchise failure rate?
Based on SBA 7(a) loan data, HomeSmart has a charge-off rate of 0.0% across 14 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many HomeSmart franchise locations are there?
As of their most recent FDD filing, HomeSmart has 258 total units in the United States, including 201 franchised units and 57 company-owned units. 8 new units were opened in the latest reporting year.
Is HomeSmart a good franchise to buy?
FranchiseVerdict rates HomeSmart as a A-grade franchise with a verdict score of 71 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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
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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.