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How much does Corcoran cost?
Initial Investment Range
$56,050 to $545,400
Franchise Fee
$5,000 to $25,000
The franchise is for a real estate brokerage offering with defined real estate brokerage services from a specified location under the name Corcoran.
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Corcoran March 28, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: July 16, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The financial statements of the parent guarantor, Anywhere Real Estate Inc. (Anywhere), reveal significant financial weakness. The company has reported net losses for the past three fiscal years (2022-2024) and has a large accumulated deficit. While the parent guarantees the franchisor's obligations, its own financial instability could potentially impact its ability to provide long-term support and investment in the brand, creating risk for your business.
Potential Mitigations
- A franchise accountant should meticulously analyze the parent company's financial statements, including all footnotes, to assess its long-term viability and ability to support the system.
- It is important to discuss the implications of the parent's financial performance on brand support and investment with your business advisor.
- Your attorney should review the terms of the parent company's Guarantee of Performance to understand the scope and limitations of the protection it offers.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals an extremely high number of franchise terminations in 2022, with 80 terminations on a starting base of 118 outlets. This represents a 68% annual churn, which is a critical indicator of potential systemic problems, franchisee dissatisfaction, or lack of profitability under a prior large franchisee. While recent years show more stability, this past event suggests a significant historical risk that could impact the system's reputation and your operational environment.
Potential Mitigations
- Inquiring with the franchisor about the specific circumstances that led to the high number of terminations in 2022 is a critical due diligence step.
- Contacting former franchisees from the period of high turnover, with help from your attorney, can provide direct insight into the reasons for their departure.
- A business advisor can help you assess whether the issues that caused the past turnover have been fully resolved by the franchisor.
Rapid System Growth
High Risk
Explanation
The franchise system is growing in unit count, but this growth is occurring while the parent company, Anywhere, is experiencing significant net losses. Rapid expansion without strong underlying financial health can strain a franchisor's resources. This situation could potentially lead to challenges in providing the promised level of support, training, and brand investment to all franchisees, including new ones like you, as the system scales.
Potential Mitigations
- Posing direct questions to the franchisor about how they plan to scale support infrastructure to match unit growth is an important step.
- Your accountant can help you evaluate if the franchisor's parent has sufficient cash flow and resources to adequately support a growing system.
- Engaging with a mix of new and established franchisees can provide perspective on whether the quality of support is keeping pace with system growth.
New/Unproven Franchise System
High Risk
Explanation
The franchisor, Corcoran Group LLC (Corcoran LLC), only began franchising in January 2019, making it a relatively new system. The FDD's 'Special Risks' section explicitly highlights that the franchisor is at an early stage of development with a limited operating history. Investing in a newer system, even one with an established brand name and an experienced parent, carries inherent risks related to unproven support systems, evolving standards, and potential unforeseen operational challenges.
Potential Mitigations
- Conducting thorough due diligence on the management team's specific experience in building and supporting a franchise system is crucial for your business advisor.
- Speaking with the earliest franchisees in the system can offer valuable insights into how the franchisor's support and systems have evolved.
- Your attorney might be able to negotiate more favorable terms to help offset the higher risks associated with a newer franchise system.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. Corcoran is a long-established brand in the real estate industry, not a business based on a recent or fleeting trend. When evaluating any franchise, it is important to consider if the core business has long-term consumer demand. A business model tied to a fad could lose its customer base quickly, leaving you with contractual obligations long after public interest has faded.
Potential Mitigations
- A business advisor can help you research the long-term market trends and competitive landscape for the industry.
- Asking the franchisor about their long-term vision and plans for innovation and brand evolution is a valuable exercise.
- Your financial advisor can help assess the business model's resilience to economic cycles and changing consumer tastes.
Inexperienced Management
Low Risk
Explanation
This risk was not identified. The executives listed in Item 2 for Corcoran LLC and its parent, Anywhere, appear to have significant experience in the real estate and franchising industries. However, you should still verify that the support team you will interact with directly has the necessary expertise. Inexperienced management can lead to poor strategic decisions, inadequate franchisee support, and a lack of understanding of the day-to-day challenges franchisees face, which can negatively impact your business.
Potential Mitigations
- Interviewing the specific support personnel you will be working with is a prudent step to gauge their expertise and responsiveness.
- Asking current franchisees about the quality and experience level of their primary contacts within the franchisor organization can provide valuable insight.
- In discussions with the franchisor, your business advisor can help you explore the depth of the team that provides day-to-day operational support.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified, as the parent company, Anywhere, is a publicly traded corporation, not a private equity firm. However, public companies also face pressure to deliver shareholder returns, which can influence decisions on fees, support spending, and system growth. It is important to assess any ownership structure for potential conflicts between investor priorities and the long-term health of franchisees. This is especially relevant given the parent's current financial performance.
Potential Mitigations
- Your accountant should review the parent company's public financial reports and investor calls to understand its strategic priorities and financial health.
- It is beneficial to ask current franchisees if they have observed any changes in franchisor behavior that seem driven by shareholder pressure.
- Understanding the franchisor's right to sell or assign the system is critical; your attorney should review these clauses in the Franchise Agreement.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified. Item 1 clearly discloses the parent companies, and Item 21 includes the audited consolidated financial statements for the ultimate parent guarantor, Anywhere Real Estate Inc. The FDD also includes a formal Guarantee of Performance. Failure to disclose a parent company or provide its required financial statements can obscure significant risks related to the system's true financial backing and stability, which is not an issue in this FDD package.
Potential Mitigations
- It is good practice for your attorney to confirm that the provided parent guarantee is legally sound and enforceable in your jurisdiction.
- Your accountant's review of the parent company financials remains a critical step in understanding the overall stability of the system you are joining.
- Always verify that the entity providing the franchise is the same one whose financials or guarantee you are reviewing, a task your attorney can assist with.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. Corcoran LLC discloses that it has no predecessors. In cases where a franchisor has acquired the system from a predecessor, it is crucial for a prospective franchisee to understand that history. A predecessor's negative track record, such as high franchisee turnover or significant litigation, could indicate underlying problems that may persist under the new ownership, and this history must be fully disclosed in the FDD.
Potential Mitigations
- When a predecessor is listed, your attorney should carefully review their history as disclosed in Items 3 and 4.
- Researching a predecessor's public reputation and history with the help of a business advisor can provide valuable context.
- If possible, speaking with franchisees who operated under the predecessor can reveal important information about the system's past.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses that the franchisor's parent, Anywhere, has been a defendant in multiple, significant antitrust class-action lawsuits (Moehrl, Burnett, etc.) related to agent commissions. While Anywhere has reached a nationwide settlement, the litigation is substantial and industry-altering. This pattern of high-stakes litigation against the parent company, even if settled, indicates significant legal and regulatory risks for the entire real estate industry and the franchise system, potentially impacting future business practices and creating uncertainty.
Potential Mitigations
- A thorough discussion with your franchise attorney about the implications of this industry-wide litigation on your potential business is essential.
- Your business advisor can help you assess how the operational changes resulting from the settlement might affect your pro-forma financial projections.
- Asking the franchisor how they are supporting franchisees in navigating the changes to industry rules is a key due diligence question.
Disclosure & Representation Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Financial & Fee Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Legal & Contract Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Territory & Competition Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Regulatory & Compliance Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Franchisor Support Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Operational Control Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Term & Exit Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Miscellaneous Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems