Risk Score
Pending analysis
Investment Range
$16,750 - $221,595
Franchise Fee
$5,000
Min Cash Required
$5,000
Total US Locations
608
Business Summary
NextHome offers franchises for real estate brokerage offices that operate under the NextHome name and brand. These offices specialize in the sale and leasing of residential and commercial properties, along with other real estate-related activities. Franchisees can either establish new offices or convert existing ones to the NextHome system, which includes proprietary business methods, specialized services, unique products, brand concepts, and technology.
Corporate History
NextHome, Inc. was initially incorporated in Delaware as NxGen Investment, Inc. in September 2011. The company changed its name to NextHome, Inc. in January 2014. NextHome became actively operational in May 2014 after acquiring most of the assets of its predecessor, Realty World - Northern California, Inc., a real estate brokerage franchisor. NextHome began offering franchises under its own brand in November 2014.
Financial Overview
Investment Range
$16,750 - $221,595
Franchise Fee (Low)
$5,000
Franchise Fee (High)
$10,000
Minimum Cash Required
$5,000
Equipment Costs (Low)
$1,500
Equipment Costs (High)
$79,000
Working Capital
$52,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
NextHome's financial condition has raised concerns about its ability to provide services and support to its franchisees. The company's financial statements show that its stockholders' equity was a deficit of $12,657 in 2023, though it became positive at $83,025 in 2024. The company reported net incomes in both 2024 and 2023.
Financing Details
NextHome does not offer any direct or indirect financing to its franchisees. The company will also not guarantee any notes, leases, or obligations for franchisees.
Performance Metrics
Total US Locations
608
Franchised Units
608
Corporate Units
0
Avg Square Footage
1,750
Franchising Since
2014
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
3
Litigation Summary
NextHome has been involved in three disclosed litigation matters. One concluded action involved a dispute with Realty World, Inc., a predecessor. Realty World, Inc. filed a complaint against NextHome in 2016 alleging breach of contract and trademark issues. NextHome counterclaimed, alleging trademark infringement and unfair competition. This case was settled in February 2018, prohibiting Realty World parties from using names similar to "NextHome" and arranging for NextHome to assign its Realty World franchise rights. Two actions are currently pending. In September 2024, NextHome entered into a settlement agreement in a class action lawsuit filed by home sellers who alleged an anticompetitive conspiracy regarding buyer brokers' commissions. NextHome denied the allegations and agreed to pay $600,000 into a settlement fund and recommend certain practice changes to its franchisees. Preliminary approval for this settlement was granted in November 2024. Additionally, in November 2024, another class action lawsuit was filed against NextHome and other brokerages by a home seller, alleging a conspiracy to fix real estate commissions and misrepresentations regarding broker services, seeking damages and injunctive relief. NextHome intends to vigorously defend against these claims.
Bankruptcy History
NextHome has no bankruptcy history to report.
Agreement Terms
Initial Term
1 years
Renewal Term
5 years
Renewal Conditions
To renew, NextHome franchisees must meet several conditions. Franchisees and their related parties must be in good standing, meaning they comply with all agreement terms and financial obligations. They need to provide written notice of their desire to renew between 30 and 90 days before the current term expires. Franchisees must also sign NextHome's then-current franchise agreement, which may have different terms, including higher fees. If renewing for a 5-year term or if their office has been open for 5 or more years, franchisees must remodel and redecorate their premises to meet current NextHome standards. Finally, the franchisee and their 5% owners must sign a general release.
Training & Support Program
Franchisor Assistance
NextHome offers a range of assistance to its franchisees. Before opening, NextHome consults on office location and design, provides access to proprietary and third-party software for operations, and ensures the Principal Broker and Sales Managers complete an orientation program. NextHome also provides lists of approved suppliers. Ongoing assistance includes permission to use NextHome's trademarks, access to Franchisee Materials for compliance, and representatives available for consultation on System standards. NextHome may also conduct annual meetings and conferences, which owners and representatives are encouraged or required to attend, with a registration fee. On-site consultations are available for an additional fee and travel expenses.
Initial Training Hours
20
Training Location
Online or at a location specified by NextHome
Ongoing Support
NextHome provides ongoing assistance by allowing franchisees to use its trademarks and access Franchisee Materials for operating their offices. NextHome representatives are available for consultation on System standards without additional charge, and on-site consultations can be arranged for a fee. The company also reserves the right to hold annual meetings and conferences for franchisees, offering System updates, education, and networking opportunities, for which a registration fee is charged and attendance is encouraged or required for owners/representatives.
Franchise Requirements
Ideal Candidate Profile
NextHome grants franchises exclusively to business entities. While the owners of these entities are not required to personally supervise the office, it is recommended that they do so. The franchisee must employ a licensed real estate broker as the Principal Broker, who must dedicate full-time effort to managing and supervising all financial and operational aspects of the office, either directly or through a Sales Manager.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Non-Exclusive
Territory Size Requirements
NextHome grants franchisees a non-exclusive license to operate a single NextHome office at a specific approved location. NextHome franchisees do not receive an exclusive or protected territory. NextHome and its affiliates reserve the right to open and operate, or grant rights to others to operate, NextHome offices or other competitive brands at any location, including in direct proximity to an existing NextHome franchise. There are no restrictions on NextHome or other franchisees from soliciting or accepting business in the area around any NextHome office. With prior approval, a NextHome franchisee may also operate temporary sales offices within or adjacent to a new subdivision or development project solely for selling property in that specific development.
Staffing Notes
NextHome franchisees must always employ enough properly trained and qualified staff to operate the office according to NextHome's standards. A licensed real estate broker must be designated as the Principal Broker for the office, devoting full-time effort to management and supervision. This Principal Broker is legally responsible for all licensed associates. Sales Managers can assist the Principal Broker in day-to-day management and supervision. If the Principal Broker or Sales Manager changes, a successor must be appointed quickly and complete NextHome's orientation program within 60 days of being hired. The franchisee must also ensure employees maintain good client relations and adhere to the franchise agreement.