Bottom line
- Total investment $66K – $205K including a $20K franchise fee.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated STRONG with a risk score of 49/100. SBA loan default rate of 0.0% across 21 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one HomeSmart unit return on the cash you put in?
Unlevered ROIC · per unit
56%
In Yale's "attractive" band (30–60%)
Overview
About
HomeSmart franchisees operate real estate brokerage offices, recruiting and managing residential real estate agents. Day-to-day operations include agent recruitment/retention, MLS compliance, transaction management, customer support, and local marketing—generating revenue through commissions on completed sales sides and rental/referral fees, with portions remitted to the franchisor.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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.
Score breakdown · what drove the 49 / 100 rating
- 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
- 05HIGHModest 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
45 numbers
One-time purchase · CSV download · Validation questions included
FDD download
HomeSmart · FDD (2025) PDF