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How much does Help-U-Sell Real Estate cost?
Initial Investment Range
$29,650 to $67,650
Franchise Fee
$17,750
As a Help-U-Sell® franchisee, you will operate a real estate sales office that offers a variety of real estate services to the general public.
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Help-U-Sell Real Estate March 20, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 22, 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
Infinium Realty Group, Inc. (IRG) explicitly warns of its questionable financial condition. The audited financial statements in Exhibit G confirm this, showing accelerating net losses for the past three years, a significant accumulated deficit of over $5.8 million, and a negative stockholder's equity position in 2023. This financial weakness raises serious concerns about the franchisor's ability to support you, invest in the brand, and remain a viable long-term partner, representing a direct risk to your investment.
Potential Mitigations
- A franchise accountant must conduct a thorough analysis of the audited financial statements, including all footnotes and management's explanations for the persistent losses.
- It is crucial to discuss the franchisor's capitalization and plans for achieving profitability with your financial advisor to assess long-term viability.
- Your attorney should investigate if any state financial assurance requirements, such as a bond or escrow, have been imposed on the franchisor.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a significant and accelerating decline in the number of franchised outlets. The total number of units dropped from 75 to 40 over the last three years, a reduction of nearly 47%. This extremely high rate of turnover, stemming from non-renewals, ceased operations, and other departures, is a critical red flag. It may indicate systemic problems such as a lack of franchisee profitability, insufficient support, or general dissatisfaction with the business model.
Potential Mitigations
- A deep analysis of the turnover data with your accountant is essential to understand the yearly churn rate.
- Speaking with a significant number of former franchisees from the list in Item 20 is critical to learn why they left the system.
- Your business advisor can help you assess whether this high turnover rate presents an unsustainable risk for a new investment.
Rapid System Growth
Low Risk
Explanation
The franchisor's outlet count is contracting rapidly, not growing. This indicates potential issues with franchisee success and system health rather than the risks associated with managing rapid growth.
Potential Mitigations
- Your business advisor should help you evaluate why the system is shrinking rather than expanding, which is a significant concern.
- A review of the franchisor's financial statements with your accountant may reveal if a lack of resources is contributing to the contraction.
- Discussing the system's trajectory with current and former franchisees can provide crucial context beyond the FDD numbers.
New/Unproven Franchise System
High Risk
Explanation
While IRG itself was formed in 2008, the Help-U-Sell system has existed since 1976. However, a direct predecessor, Realty Information Systems, Inc., filed for Chapter 11 bankruptcy in 2008. The current franchisor's long history of operating losses and franchisee decline suggests the business model remains unproven in its current form, despite the brand's age. This history presents significant risk regarding system stability and potential for success.
Potential Mitigations
- It is critical to have your attorney review the predecessor's bankruptcy history and its implications for the current company.
- Your accountant should analyze whether the franchisor has demonstrated a path to profitability since acquiring the system out of bankruptcy.
- A business advisor can help you weigh the risks associated with a historically troubled system.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD Package. The Help-U-Sell business model, focused on set-fee real estate services, has existed since 1976 and addresses a consistent consumer desire for alternatives to traditional commission-based brokerage. While the real estate market fluctuates, the underlying service is not based on a short-term fad.
Potential Mitigations
- A business advisor can help you research the long-term market trends for set-fee real estate services in your specific area.
- Discussing the business model's resilience to market cycles with experienced, long-term franchisees is a valuable step.
- Your financial advisor should help you assess the sustainability of the business model in various economic conditions.
Inexperienced Management
Low Risk
Explanation
The management team detailed in Item 2 appears to have extensive, long-term experience within the Help-U-Sell system and the real estate industry itself. Several executives have been with the brand for decades in various capacities, including as successful franchisees. This specific risk of inexperienced management was not identified.
Potential Mitigations
- It is still prudent to conduct due diligence by speaking with current franchisees about the quality and effectiveness of management's support.
- Your business advisor can help you research the professional reputations of the key executives listed in Item 2.
- Asking management directly about their strategic vision for overcoming the company's financial challenges is an important step.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 and Item 2 do not indicate that the franchisor is owned by a private equity firm. The financials in Item 21 and notes suggest ownership by individuals or a closely held corporation, not a PE fund.
Potential Mitigations
- In any franchise review, it is wise for your attorney to verify the franchisor's ownership structure and identify the ultimate controlling parties.
- Understanding the ownership can help a business advisor assess whether motivations are aligned for long-term brand health or a short-term exit.
- Your attorney should always review the franchisor's right to sell or assign the franchise system.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor discloses a subsidiary, LogiicIT Ltd., in Item 1 and includes its financial information within the consolidated financial statements in Exhibit G. There is no indication of an undisclosed parent company.
Potential Mitigations
- Your attorney should always verify the full corporate structure of a franchisor to ensure all parent and affiliate relationships are properly disclosed.
- An accountant should confirm that if a parent company's financial strength is necessary to support the franchisor, its financials are included as required.
- It's important to understand the role of all affiliated companies with assistance from your legal and financial advisors.
Predecessor History Issues
High Risk
Explanation
IRG discloses its predecessors in Item 1, including one entity, Realty Information Systems, Inc., that filed for Chapter 11 bankruptcy in 2008 before IRG acquired the assets. While IRG itself has no bankruptcy, this predecessor history is a significant material fact. The continuity of operational and financial struggles from the predecessor to the current entity presents a substantial risk to a new franchisee.
Potential Mitigations
- A franchise attorney should carefully review the history of predecessor entities and any associated litigation or bankruptcy.
- It is important to ask current long-term franchisees about their experience with the transition from the predecessor.
- Your accountant can help assess whether the current franchisor has resolved the issues that may have led to the predecessor's failure.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 states, "There is no litigation required to be disclosed in this Item." This suggests an absence of recent, material legal actions involving the franchisor that would meet the specific disclosure requirements of franchise law.
Potential Mitigations
- Although no litigation is disclosed, asking current and former franchisees about their experiences and any disputes is a crucial due diligence step.
- Your attorney can conduct a public records search to look for any litigation that may not have met the technical disclosure threshold.
- It is important for your attorney to review the dispute resolution clauses in the Franchise Agreement to understand your rights if a conflict arises.
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