For Christies International Real Estate, are non-cash payments included when calculating Gross Revenues?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
- Amount. "Gross Revenues" means the aggregate dollar amount from all sales of goods or services made, provided by, or in connection with the Business or the Marks, whether for cash or credit or non-cash payments or consideration at fair market value, regardless of collection in the case of credit, before the deductions of any fees, costs, or expenses you incur. Gross Revenues includes, without limitation the total commissions earned from each transaction before any deductions, including without limitation, MLS fees. By way of example, and not a limitation, in the event your office or one of your agents sells a home with a closing price of $500,000, a commission of 6%, a seller/buyer agent split of 50/50, this sale would generate a gross commission of $15,000. The Gross Revenues for that transaction, upon which Royalties and other fees will be calculated, will be $15,000. Gross Revenue excludes the portion of the commissions earned from each transaction that is paid to or shared with an authorized and approved affiliated refe
Source: Item 6 — OTHER FEES (FDD pages 14–17)
What This Means (2025 FDD)
According to Christies International Real Estate's 2025 Franchise Disclosure Document, Gross Revenues include non-cash payments when calculating royalty fees and other fees. Gross Revenues are defined as the aggregate dollar amount from all sales of goods or services made in connection with the business, whether those payments are cash, credit, or non-cash. The value of non-cash payments is determined by the fair market value. Gross Revenues are calculated before any deductions of fees, costs, or expenses incurred by the franchisee.
For a Christies International Real Estate franchisee, this means that all sales, regardless of payment type, contribute to the Gross Revenues used to calculate royalty fees. This includes traditional cash and credit transactions, but also any non-cash transactions such as barters or trades, with the fair market value of those transactions being included in the gross revenue calculation.
An example provided in the FDD illustrates how Gross Revenues are calculated from a home sale. If a Christies International Real Estate office sells a home for $500,000 with a 6% commission and a 50/50 split between the seller's and buyer's agents, the gross commission is $15,000. This $15,000 is the Gross Revenue used to calculate royalties and other fees. However, Gross Revenue excludes any commissions paid to authorized and approved affiliated referral sources.
Franchisees should be aware that the Royalty Fee, which ranges from 3% to 6% of Gross Revenues, is calculated based on this comprehensive definition. The exact percentage depends on factors such as the exclusivity of the franchisee's protected territory. Additionally, other fees, such as the Advertising Fund Fee (if implemented), would also be calculated based on Gross Revenues.