What is the royalty fee during the Holdover Period for a Corcoran franchise?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.1.2 Holding Over. If you or an Owner uses the Marks after the expiration of this Agreement, you will be deemed to be operating on a month-to-month basis ("Holdover Period").
During any Holdover Period, all of your obligations will remain in full force and effect, as if this Agreement had not expired, and all obligations imposed on you upon expiration of this Agreement will take effect upon termination of the Holdover Period, provided, however, the Royalty Fee due during the Holdover Period will be an amount equal to twice the Royalty Fee otherwise due under Section 7.1.
The month-to-month extension may be terminated by Franchisor, in its sole discretion, upon ten (10) days written notice to Franchisee.
Additionally, we may consider you in default of this Agreement and may exercise all remedies available to us, including pre-termination options set forth in Section 16.3, which includes suspension of services, or termination.
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to the 2025 Corcoran Franchise Disclosure Document, if a franchisee continues to use Corcoran's marks after the franchise agreement expires, it is considered a "Holdover Period" operating on a month-to-month basis. During this time, all obligations remain in effect as if the agreement had not expired.
However, the royalty fee due during the Holdover Period is twice the amount that would normally be due under Section 7.1 of the franchise agreement. This means that a franchisee in the holdover period will experience a significant increase in their royalty obligations.
Corcoran has the right to terminate this month-to-month extension with only ten days' written notice to the franchisee. Additionally, Corcoran may consider the franchisee in default of the agreement and pursue remedies such as suspending services or terminating the agreement altogether. This creates a potentially risky situation for a franchisee who continues operating after the agreement's expiration, as they face higher fees and the possibility of abrupt termination.