Corcoran Franchise

Financing Details

Corcoran Group LLC or a Related Party may offer financing to franchisees to help with conversion costs, growth opportunities, or other business-related expenses. The availability and terms depend on factors like the franchisee's financial need, credit history, ability to repay, net worth, business operations, and the development needs of their market area. Financing is primarily offered through promissory notes: - Conversion Promissory Note (CPN): This note assists with conversion or opening costs, including signage, materials, advertising, marketing, and recruiting. It typically has a 9-10 year term with no interest, unless there's a payment default (then 18% per annum or highest legal rate). A portion of the principal can be forgiven annually if the franchisee meets specific annual Gross Revenue thresholds and remains compliant with the Franchise Agreement. If the Franchise Agreement expires or terminates early, any outstanding principal becomes immediately due. - Expansion Promissory Note: This is an interest-bearing note offered to existing franchisees for acquisitions or other business-related expenses, bearing 18% per annum interest upon a payment default. The principal must be repaid 6 months before the Franchise Agreement's expiration date, and there is no forgiveness opportunity. Both types of notes require a personal guaranty from all persons with an equity interest in the franchisee and their spouses, along with a Security Agreement and UCC-1 filing on the business's assets. In case of default, all payments are accelerated, and the franchisee may lose their franchise. Franchisees waive various notice, rights, and defenses, and may allow for a confessed judgment, subject to state laws. Corcoran Group LLC may also offer other financing programs for agent recruiting or as part of its franchise sales incentive program, which might waive the CPN requirement. A six-month operational review may be required before granting financing.

Litigation Summary

Corcoran Group LLC and its parent company, Anywhere Real Estate Inc., have been involved in a number of ongoing and resolved legal matters. These include multiple antitrust class action lawsuits (Moehrl, Burnett, Nosalek, Batton, Homie Technology) challenging real estate industry rules related to buyer-broker commissions and alleged anti-competitive behavior. Anywhere reached a nationwide settlement for $83.5 million in October 2023, which received final court approval in May 2024, but this settlement is currently under appeal. Several copycat lawsuits are pending but generally stayed against Anywhere until these appeals are concluded. Additionally, a class action lawsuit (Chinitz) filed in 2019 concerning Telephone Consumer Protection Act (TCPA) violations by affiliated agents was tentatively settled for $20 million in January 2025, pending court approval. Regulatory investigations include a past HUD/FTC inquiry into a joint venture related to RESPA violations that was settled, and an ongoing investigation by the Washington Office of the Attorney General, which began in February 2024, regarding competitive practices in the real estate market. A resolved RESPA class action lawsuit (Dodge/Agrawal) filed in 2015 was settled for $17 million in 2017. Corcoran Group LLC denies all allegations in ongoing cases and is vigorously defending them.

Renewal Conditions

Corcoran Group LLC does not grant renewal rights under the main Franchise Agreement. If Corcoran Group LLC chooses to grant an additional term, it may require the franchisee to sign its then-current franchise agreement or other documentation, which could include materially different terms and conditions.

Staffing Notes

Corcoran Group LLC requires franchisees to retain a Responsible Broker who must be licensed in the state of operation. The Responsible Broker (or a designee) and other office managers must complete the mandatory Orientation program. Franchisees, their owners, officers, guarantors, and Responsible Brokers cannot be involved in any other real estate brokerage business, except for authorized Excluded Businesses. All management personnel, including the Responsible Broker and manager, must treat System information as confidential. Franchisees are solely responsible for all personnel-related decisions, including recruiting, retaining, or disaffiliating independent sales associates and employees, and for complying with all labor and employment laws.