HomeSmart Franchise
Cost, fees, owner earnings, closure rate and litigation for a HomeSmart franchise — pulled from the franchisor's own public FDD (2026), not its sales material.
Disclosure honesty
HomeSmart discloses little or no owner-earnings data (Item 19) — the franchisor won't put real profit in writing.
What their own earnings claim actually says
Franchisor explicitly disclaims all financial performance representations. No earnings claims provided; actual results vary by unit.
What a HomeSmart franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $20,000 | Item 5 — paid up front, before you open |
| Advertising fund | 4% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 4% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $65,500 – $205,000 | Item 7 — franchisor's own low/high estimate |
Royalty structure: $12/agent/month + $120/completed side OR $500/month + $25/rental. Tech $250/month; MLS $250/month estimated.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
HomeSmart system size and owner turnover
| Total outlets | 258 |
| Ceased operations | 12 |
| Terminated by franchisor | 8 |
| Transferred to new owners | 2 |
| Closure rate | 4.7% of outlets |
4 net outlet decline 2024-2025; 12 ceased operations in 2025 alone.
From Item 20 of the FDD 2026. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is HomeSmart worth it? — how it compares to 436 similar franchises
| Ongoing fees | 4% of sales | lower than most (median 8%) |
| Startup cost | from $65,500 | cheaper than most (median $138,750) |
| Disclosure honesty | Grade F | less honest than most of the category |
| Closure rate | 4.7% of outlets | worse than 71% of peers |
| Disclosed lawsuits | 3 | more litigious than 74% of peers |
Benchmarked against every other franchises franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a HomeSmart
The franchisor's framing: Franchisor explicitly disclaims all financial performance representations. No earnings cla… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
See a full sample report → · 30-day guarantee
HomeSmart franchise — frequently asked
- How much does a HomeSmart franchise cost?
- The FDD lists a total initial investment of about $65,500–$205,000, including a $20,000 initial franchise fee.
- How much do HomeSmart franchise owners make?
- HomeSmart discloses little or no earnings data (Item 19) — meaning the franchisor won't put real owner profit in writing. That's a red flag worth questioning.
- What are the HomeSmart franchise fees?
- HomeSmart's FDD discloses a $20,000 initial franchise fee, a 4% advertising-fund contribution, for roughly 4% of gross sales in recurring fees before rent, labor, or debt service. Royalty structure: $12/agent/month + $120/completed side OR $500/month + $25/rental. Tech $250/month; MLS $250/month estimated.
- What is the HomeSmart franchise profit margin?
- HomeSmart discloses no Item 19 earnings representation, so no profit margin can be derived from the FDD at all. Any margin figure quoted elsewhere is an estimate, not a disclosure.
- What is the HomeSmart franchise failure rate?
- 4 net outlet decline 2024-2025; 12 ceased operations in 2025 alone.
- How many HomeSmart locations are there?
- HomeSmart's FDD reports 258 total outlets, with 12 that ceased operations in the most recent reporting year and 2 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does HomeSmart have complaints or lawsuits?
- HomeSmart discloses 3 legal matters in Item 3 of its FDD. Item 3 covers the franchisor's litigation history, which is the closest thing to a public record of how it treats franchisees — read the case descriptions, not just the count.
- Is a HomeSmart franchise worth it?
- It depends on the numbers, not the pitch. HomeSmart scores F on disclosure honesty, carries about 4% of sales in ongoing fees, and discloses 3 legal matters. Get the real owner take-home before you sign.
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Compare HomeSmart to similar franchises
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Source: MN CARDS 36016-202604-09 (Clean FDD 2026). FranchiseValidate is independent and not affiliated with HomeSmart or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.