What is the 'Franchise Agreement' referring to in the context of a Corcoran franchise?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
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We offer franchises for real estate sales offices in the United States to owners of existing real estate brokerage businesses and in certain situations we may offer a franchise to newly formed real estate brokerages as described below in this Item 1 (the "Franchise" or the "Business") The Franchise permits you to offer residential and commercial real estate brokerage services from a specified office location (the "Main Office") and other authorized office locations (the Main Office and other authorized office locations collectively referred to as a "Corcoran Office" or "Office"), using the Corcoran® service mark and other trademarks, service marks, designs, logos and other commercial symbols we periodically designate (collectively, the "Marks"), and using a system that we have developed which includes access to brand specific systems, productivity resources, basic business development support, education, real estate referral and broker communications procedures, marketing and advertising services, products and other support funding by our brand marketing fund ("Brand Marketing Fund" or "BMF") and various other items (the "System"), all in accordance with the terms of our Real Estate Franchise Agreement ("Franchise Agreement") and the mandatory provisions of our Policies and Procedures Manual and the Brand Standards (collectively referred to as the "P&P Manual"). The franchises offered under the Corcoran® System are not in any way associated with Corcoran Sunshine (described below) and Corcoran Sunshine is not part of the System. Nothing limits Corcoran Sunshine's ability to operate or open an office anywhere in the U.S. or internationally.
You may also conduct new development services using the Marks, subject to the requirements set forth in the P&P Manual, which includes our prior written approval for conducting new development services from Development Offices (defined in the P&P Manual). We have the right to condition our approval of new development services depending on the size, scope, and type of the property or the architect (or architectural firm) utilized for the property, as more fully described in the P&P Manual.
Usually, the Franchise is granted to owners of existing real estate brokerage businesses for conversion to a franchised office. The existing real estate brokerage businesses, however, must meet certain eligibility criteria which are listed below (the "Criteria").
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 9–17)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, the 'Franchise Agreement' refers to the Real Estate Franchise Agreement that a prospective franchisee must sign to operate a Corcoran real estate sales office. This agreement allows the franchisee to offer residential and commercial real estate brokerage services from a specified location, using Corcoran's trademarks and system. The system includes access to brand-specific systems, productivity resources, business development support, education, real estate referral and broker communications procedures, marketing and advertising services, and other support funded by the Brand Marketing Fund. The Franchise Agreement also mandates adherence to the Policies and Procedures Manual and the Brand Standards.
The Franchise Agreement is a crucial document that outlines the terms and conditions under which Corcoran grants the franchise. In addition to the Franchise Agreement, franchisees are also required to sign a Guaranty of Payment and Performance and a Security Agreement. Furthermore, for additional branch offices, a Location Addendum to the Franchise Agreement is required. The Franchise Agreement may also stipulate conditions regarding other businesses operated from the franchise location, requiring either prior written consent from Corcoran or a list of excluded businesses.
For potential Corcoran franchisees, understanding the Franchise Agreement is essential. It dictates the scope of services they can offer, the standards they must maintain, and the fees they are obligated to pay. It also outlines Corcoran's responsibilities and support systems. Given the agreement's complexity and its impact on the franchisee's operations, prospective franchisees should carefully review it with legal and financial advisors to fully understand their rights and obligations before signing.