How does Corcoran structure franchisee fees?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
erage weighted interest rate was 7.9% and 7.5% for the years ended December 31, 2024 and 2023, respectively.
Gain/Loss on the Early Extinguishment of Debt
During the year ended December 31, 2024, the Company recorded gains on the early extinguishment of debt totaling $7 million as a result of the repurchases of Unsecured Notes occurring in the third quarter of 2024.
During the year ended December 31, 2023, the Company recorded gains on the early extinguishment of debt totaling $169 million which consisted of $151 million as a result of the debt exchange transactions and $18 million as a result of the open market repurchases occurring in the third quarter of 2023.
During the year ended December 31, 2022, the Company recorded a loss on the early extinguishment of debt of $96 million, as a result of the refinancing transactions during 2022, which included $80 million related to the make-whole premiums paid in connection with the early redemption of the 7.625% Senior Secured Second Lien Notes due 2025 and 9.375% Senior Notes due 2027.
10. FRANCHISING AND MARKETING ACTIVITIES
Domestic franchisee agreements generally require the franchisee to pay the Company an initial franchise fee for the franchisee's principal office plus a royalty fee that is a percentage of gross commission income, if any, earned by the franchisee. Franchisee fees can be structured in numerous ways. The Company utilizes multiple franchise fee models, including: (i) volume-based incentive (under which royalty fee rate is subject to reduction based on volume incentives); (ii) flat percentage royalty fee (under which the franchisee pays a fixed percentage of their commission income); (iii) capped fee (under which the franchisee pays a royalty fee capped at a set amount per independent sales agents per year); and (iv) tiered royalty fee (under which the franchisee pays a percentage of their gross commission income as a royalty fee).
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to the 2025 Corcoran Franchise Disclosure Document, franchisee fees can be structured in several ways. For domestic franchisees, Corcoran typically requires an initial franchise fee for the franchisee's principal office, along with royalty fees based on a percentage of the gross commission income earned.
Corcoran utilizes multiple franchise fee models, including volume-based incentives where the royalty fee rate can be reduced based on volume, a flat percentage royalty fee where franchisees pay a fixed percentage of their commission income, a capped fee where the royalty fee is capped at a set amount per independent sales agent per year, and a tiered royalty fee where the franchisee pays a percentage of their gross commission income as a royalty fee. The specific volume incentives vary for each eligible franchisee, and Corcoran provides a detailed table describing the gross revenue thresholds required to achieve a volume incentive, along with the corresponding incentive amounts, which are subject to change.
The initial franchise fee for the first Corcoran office is $25,000. The initial franchise fee for each additional branch office is $10,000, and Corcoran may increase this fee for offices opened after the effective date, consistent with the fee charged for branch offices in the current disclosure document. The initial franchise fee for any Limited Purpose Office is $2,000. These fees are non-refundable and fully earned upon signing the agreement or any addendum.