Sotheby’s International RealtyFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Sotheby’s International Realty franchise requires a total initial investment of $47K – $519K, including a $25K franchise fee and an ongoing 6.0% royalty[2]. The 2026 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $47K – $519K
- 26th pct Real Estate
- Avg gross sales
- N/A
- 25th pct Real Estate
- Royalty
- 6.0%
- 21st pct Real Estate
- Units
- 709
- 72nd pct Real Estate
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Real Estate · color = vs category peers
Green = >15% above Real Estate avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
11 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $47K – $519K including a $25K franchise fee, 6.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict A (Top Quintile) with a risk score of 34/100.
- 11 litigation matters disclosed in Item 3, higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Sotheby’s International Realty Affiliates LLC
- Parent company
- Compass, Inc.
- Incorporated in
- DE
- HQ
- 175 Park Avenue, Madison, New Jersey 07940
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $6K
- vs $6K prior year
Overview
About
Sotheby's International Realty franchisees operate high-end residential real estate brokerage offices under the luxury Sotheby's brand, generating revenue primarily through real estate transaction commissions. Daily activities include recruiting and managing agents, marketing luxury properties, client relationship management, and local market operations while paying the franchisor 6% of gross revenue and maintaining brand standards. The franchise model relies on the Sotheby's prestige to attract high-net-worth sellers and justify premium commission splits in competitive luxury markets.
- CEO
- Philip A. White, Jr.
- Headquarters
- NJ
- Founded
- 2004
- FDD year
- 2026
- States available
- 46
FDD Item 7 · 2026 filing · 19 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $0 | $25K | |
| Real Estate | — | — | |
| Leasehold Improvements | $0 | $105K | |
| Building Signs | $750 | $25K | |
| Yard Signs and Frames/Posts | $7K | $12K | |
| Open House Signs | $900 | $3K | |
| Miscellaneous Rider Signs | $250 | $500 | |
| Name Badges | $500 | $750 | |
| Miscellaneous | $250 | $500 | |
| Printed Materials | $5K | $25K | |
| Insurance | $500 | $4K | |
| Legal Expenses | $0 | $4K | |
| Orientation - Travel Expenses and Costs | $400 | $3K | |
| Computer Equipment for Electronic Data Transfer System | $6K | $12K | |
| Website | $1K | $35K | |
| MLS/Data Feed Transmission | $0 | $8K | |
| Additional Launch Expenses (Grand Opening) | $5K | $20K | |
| Interior Branding | $5K | $10K | |
| Additional Funds (first 3 months after opening) | $15K | $40K | |
| Total initial investment | $47K | $332K |
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
- $47K – $519K
- Better than avg vs category
- Liquid capital req'd
- $15K – $60K
- Near category avg vs category
- Franchise fee
- $25K
- Better than avg vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $3K |
| Transfer fee | $5K |
| Total fee load | 8.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Real Estate averages
How Sotheby’s International Realty Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 709
- Opened
- 27
- Last reporting year
- Closed
- 21
- Turnover rate
- 3.0%
- Company-owned
- 37
- Corporate units in the system
- % franchised
- 95%
- vs corporate-owned
- Net growth (yr3)
- +0.9%
- Net unit change last year
- 3-yr CAGR
- -0.3%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 6
- Closed (3yr)
- 25
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 8
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 0.1%
- Franchisor-initiated terminations
- Ceased ops
- 3.5%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 46 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 loan disclosures. This brand has only 9 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 9
- Loan volume
- $5.9M
- Median loan
- $650K
- average
- 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)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 2
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Sotheby’s International Realty's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 2 lenders with concentration factor
- Per-state charge-off rates across 2 states
- Startup risk premium and job creation velocity
- 2-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
A stagnating luxury real estate franchise system facing multiple antitrust challenges to its commission model, with opaque financials, no territorial protection, and escalating litigation that threatens franchisee viability and franchisor stability.
Litigation (Item 3)
12 case reference(s): 1 pending, 5 settled.
Largest disclosed settlement: $175,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 34 / 100 rating
- 01MINORDeclining unit count (0.9% YoY growth indicates stagnation/contraction in mature system)
- 02MEDMultiple active class-action antitrust lawsuits regarding commission structures—core business model under legal challenge
- 03MINORNo Item 19 financial disclosure—cannot validate claimed average revenue or profitability claims
- 04MINORWide fee range ($47K-$519K) suggests highly variable territory quality with no protected territory guarantees
- 05HIGHOngoing litigation regarding franchise non-renewal (Brazen case) signals franchisor-franchisee disputes over renewal rights
- 06MINORTCPA class action and shareholder disclosure lawsuits indicate broader governance and transparency concerns post-Compass acquisition
- 07MED6% royalty on undisclosed revenue base makes ROI assessment impossible; combined with no protected territory, creates margin compression risk
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 0 |
| Protected territory | No |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| RoFR response window | 120 days |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Governing law | New Jersey |
| Litigation count | 11 |
View Item 3 litigation summary
12 case reference(s): 1 pending, 5 settled.
Items 10, 11
Training & Operations
- Classroom training
- 15 hrs
- On-the-job training
- 0 hrs
- Training location
- On-site and corporate
- Franchisor financing
- Offered
- Item 10
- POS system
- dash
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: dash
Item 20 · call current owners
Franchisee Contacts
610 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Sotheby’s International Realty · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Sotheby’s International Realty franchise?
The total investment to open a Sotheby’s International Realty franchise ranges from $47K – $519K, 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 Sotheby’s International Realty franchise owners earn?
Sotheby’s International Realty 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 Sotheby’s International Realty's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Sotheby’s International Realty (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 Sotheby’s International Realty franchise locations are there?
As of their most recent FDD filing, Sotheby’s International Realty has 709 total units in the United States, including 672 franchised units and 37 company-owned units. 27 new units were opened in the latest reporting year.
Is Sotheby’s International Realty a good franchise to buy?
FranchiseVerdict rates Sotheby’s International Realty as a A-grade franchise with a risk score of 34 out of 100, 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.
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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.