Which item in the Counselor Realty Disclosure Document relates to the renewal of a Counselor Realty franchise agreement?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 21: FINANCIAL STATEMENTS]
Notes to Financial Statements December 31, 2024, 2023 and 2022
1. Summary of Significant Accounting Policies
Nature of Operations
Counselor Realty Franchising, Inc. (the Company) was incorporated in Minnesota on May 8, 2001. The Company was formed to offer franchises for a full service residential and/or commercial real estate brokerage service business. The Company commenced the offering and sale of franchises in 2002. The Company is a wholly-owned subsidiary of Counselor Holding, Inc.
The franchise agreement includes the following:
- The Company agrees to grant franchisees the use of its Systems and Marks to operate a real estate brokerage business.
- The franchisee agrees to pay an initial fee, monthly franchise fees and metro advertising fees when applicable.
- The Company agrees to provide an initial training program and may offer additional training programs from time to time.
There were no new franchises sold in 2024, 2023, or 2022. There were no franchise renewals in 2024, 2023 or 2022. No franchise renewal fees are required. There were five franchised outlets as of December 31, 2024 and 2023. There were seven franchise outlets as of December 31, 2022. One franchise agreement expired in March 2023 and was not renewed. One franchise agreement expired in December 2022 and was not renewed. Initial franchise fees are typically $7,500 to $15,000 per franchise, as determined by the population of the franchise territory. The franchisee agrees to pay a base monthly fee covering up to five licensed agents and additional monthly fees per licensed agent above five operating from or through their office. The monthly franchise fee revenue was $57,634, $63,751 and $73,235 for the years ended December 31, 2024, 2023 and 2022, respectively. If the franchisee is located within the 11-county metropolitan area of the Twin Cities, there is a monthly metro advertising fee per licensed agent. The agreement term is five years beginning on the date the office opens.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 16–17)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, Item 21 addresses franchise renewals. Specifically, it states that there were no franchise renewals in 2024, 2023, or 2022. Additionally, the document explicitly states that no franchise renewal fees are required by Counselor Realty.
This information is crucial for potential franchisees as it clarifies the renewal landscape. The absence of renewal fees can be seen as a positive aspect, reducing the financial burden on franchisees who wish to continue operating their Counselor Realty business after the initial term. However, the fact that there were no renewals in the recent past might warrant further investigation into why franchisees chose not to renew, and what factors influence that decision.
Item 21 also mentions that the agreement term is five years beginning on the date the office opens. This provides a clear timeframe for the initial franchise agreement, after which renewal would be considered. A prospective franchisee should inquire about the process and criteria for renewal, even though no fees are currently required, to fully understand the long-term prospects of investing in a Counselor Realty franchise.