1st Class Real Estate Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$31,050 - $159,450
Franchise Fee
$25,000
Total US Locations
101
Business Summary
1st Class Real Estate offers a franchise opportunity to operate a full-service real estate brokerage business. Franchisees can choose between a Standard Model, which operates from a physical office, or a Virtual Model, which is run online. Both models assist buyers and sellers with real estate purchases and sales. Franchisees may also operate under their own approved trademark in conjunction with 1st Class Real Estate's brand standards, known as the "Powered By Option."
Corporate History
1st Class Franchising, LLC, doing business as 1st Class Real Estate, was originally formed in Virginia on July 24, 2018, and later domesticated in Florida on July 12, 2024. The company began offering franchises in October 2018. Its parent company was initially 1st Class Properties LLC (formed November 5, 2012) until December 20, 2022, when 1st Class Holding Inc. became the parent.
Financial Overview
Investment Range
$31,050 - $159,450
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$25,000
Equipment Costs (Low)
$14,500
Equipment Costs (High)
$98,000
Working Capital
$9,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The franchisor's financial condition, as noted in the special risks section of the FDD, raises questions about 1st Class Real Estate's ability to provide services and support to franchisees. The financial statements show a negative Members' Equity (Deficit) of $(593,324) for 2024 and $(1,070,991) for 2023.
Financing Details
1st Class Real Estate may offer financing for up to 80% of the initial franchise fee, with a minimum 20% down payment. The financing term can be up to 36 months at a 12% annual interest rate. For example, financing $20,000 would result in monthly payments of approximately $664.29. If the franchisee is an entity, its owners must personally guarantee the debt. There is no prepayment penalty for this financing.
Performance Metrics
Total US Locations
101
Franchised Units
101
Corporate Units
0
Avg Square Footage
1,500
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
1st Class Real Estate initiated two lawsuits against franchisees in fiscal year 2024. One lawsuit, filed in Virginia District Court, was against Blueprint Realty LLC d/b/a Blueprint Realty Powered by 1st Class Real Estate et al, to collect past due payments. The second lawsuit, filed in the Eastern District of Virginia, was against Vegas Homes and Fine Estates LLC et al, to collect past due payments and enforce non-compete covenants.
Bankruptcy History
1st Class Real Estate has no bankruptcy history to disclose.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their agreement, 1st Class Real Estate franchisees must be in compliance with their franchise agreement, provide written notice of their intent to renew at least 180 days before the agreement expires, pay a $5,000 renewal fee, and sign a general release of all claims against the franchisor. They will also need to sign the franchisor's then-current franchise agreement, which may have different terms and conditions.
Training & Support Program
Franchisor Assistance
Before opening, 1st Class Real Estate provides an approximately 18-hour online initial training program and a 3-hour live webinar, guidance to obtain equipment, signs, fixtures, and supplies, and access to a proprietary Operations Manual. During operation, the franchise offers support for operational issues, recommendations for pricing, access to required software, and advertising templates. The franchise may also offer additional optional training, seminars, and webinars.
Initial Training Hours
22
Training Location
Online/virtual and Live Webinar
Ongoing Support
After opening, 1st Class Real Estate provides ongoing operational support for problems and issues franchisees may encounter. It offers recommendations for setting prices and provides access to specified software and computer systems, including Google Suite and an email account. The franchise also provides advertising templates and marketing assistance. Optional additional training, seminars, and webinars may be offered, though attendance is not required and may incur charges.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
For the Standard Model, 1st Class Real Estate grants a territory defined as a four-mile radius around the franchisee's approved office location. For the Virtual Model, no defined territory is granted.
Staffing Notes
1st Class Real Estate requires each franchised business to have a Principal Broker who is responsible for all licensing and real estate activities. This Principal Broker must successfully complete the initial training program and sign a nondisclosure and non-competition agreement. They must also be in good standing with local, state, and national Realtor associations. Franchisees are responsible for hiring, firing, compensating, and supervising their employees, and must ensure all employees have necessary licenses and certifications.