For Christies International Real Estate, what is the significance of the 'Gross Revenues'?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.6. "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 Revenue 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 Royalty Fees 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 referral source, as permitted under Section 5.17.
We may implement, begin collecting, and increase the Advertising Fund Fee at any time upon written notice to you; however, the Advertising Fund Fee will not exceed three percent (3%) of Gross Revenue.
Source: Item 23 — RECEIPT (FDD pages 54–177)
What This Means (2025 FDD)
According to Christies International Real Estate's 2025 Franchise Disclosure Document, "Gross Revenues" are a crucial metric for franchisees as they form the basis for calculating royalty fees and potentially advertising fund fees. Gross Revenues are defined as the total dollar amount from all sales of goods or services related to the Christies International Real Estate business or Marks, including cash, credit, and non-cash transactions at fair market value, before any deductions for fees, costs, or expenses. This includes total commissions earned from each transaction before any deductions, such as MLS fees.
For example, the FDD states that if a Christies International Real Estate office sells a home with a closing price of $500,000 and a 6% commission, with a 50/50 split between the seller's and buyer's agents, the gross commission generated would be $15,000. However, the Gross Revenue excludes any commissions paid to authorized and approved affiliated referral sources, as permitted under Section 5.17 of the agreement.
Christies International Real Estate franchisees should pay close attention to how Gross Revenues are defined and calculated, as this figure directly impacts their financial obligations to the franchisor. Additionally, the franchisor reserves the right to implement and increase an Advertising Fund Fee, up to a maximum of three percent (3%) of Gross Revenue, which would further affect the franchisee's costs. Understanding these calculations is essential for accurate financial planning and assessing the profitability of a Christies International Real Estate franchise.