How must a Better Homes And Gardens Real Estate franchisee pay the Royalty Fee?
Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
7.1 Royalty Fee.
- 7.1.1 Except as described in Section 7.1.3, you will pay us a continuing fee equal to 6% of your Gross Revenue during the Term (the "Royalty Fee"). For each real estate transaction that occurs on or after the Opening Date, you must report the transaction and pay a Royalty Fee by ePay (or other method we or our Related Parties designate) on the date of settlement (closing). Royalty Fees are also due for all transactions and sales contracts entered into before the Expiration Date or the date this Agreement is terminated.
- 7.1.2 Pending Transactions. Royalty Fee and Brand Marketing Contributions (as defined in Section 8 below) shall not be due on any "Pending Transactions." Pending Transactions are those that are evidenced by a binding agreement between the parties and have been submitted to escrow for closing prior to the Opening Date.
- 7.1.3 Property Management Fee. You will pay us a continuing fee equal to 1.5% of Gross Revenue from Property Management Services ("Property Management Fee"). You must report and pay us the Property Management Fee by ePay (or other method we designate) at the time Gross Revenue from Property Management Services is received or receivable by you. You will maintain separate Property Management Services files, records and bookkeeping.
- 7.1.4 Personal Transactions. In addition to Royalty Fees due on all third-party transactions, you will pay a Royalty Fee on personal real estate transactions involving you, your Owners and your Related
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Better Homes And Gardens Real Estate Franchise Disclosure Document, franchisees are required to pay royalty fees for each real estate transaction. Specifically, for each real estate transaction that occurs on or after the Opening Date, the franchisee must report the transaction and pay the Royalty Fee by ePay, or another method designated by Better Homes And Gardens Real Estate, on the date of settlement, which is the closing date of the transaction. Royalty Fees are also due for all transactions and sales contracts entered into before the Expiration Date or the date the Franchise Agreement is terminated.
This means that as a Better Homes And Gardens Real Estate franchisee, you'll need to ensure that you have a system in place to track all real estate transactions and their closing dates accurately. You'll also need to be prepared to make royalty payments promptly through the ePay system or any other method that Better Homes And Gardens Real Estate specifies. Failing to report transactions and pay royalty fees on time could result in penalties or even termination of the franchise agreement.
In addition to third-party transactions, Better Homes And Gardens Real Estate also requires a Royalty Fee on personal real estate transactions involving the franchisee, their Owners, and their Related Parties, regardless of whether a commission was paid. However, Better Homes And Gardens Real Estate will waive Royalty Fees on three personal transactions per calendar year if no commission or fee was collected on the Personal Transaction, and the franchisee submits documentation that Better Homes And Gardens Real Estate may require to confirm eligibility for the waiver. For any other transactions on which you do not charge a commission, you will pay a Royalty Fee based on your regularly charged brokerage commission or fee.