A reasonable analytical range for a U.S. HomeVestors owner is approximately an $11,000 pre-tax loss to $187,000 of annual owner-operator benefit, with a base scenario near $68,700. This is not pure business profit: the owner-operator figure includes the economic value of management work performed by the owner. A manager-supported model produces a materially lower range.
This range is an independent analytical scenario, not an Item 19 financial performance representation by HomeVestors of America, Inc. It combines identified facts from the 2026 Franchise Disclosure Document with separately identified industry benchmarks and editorial assumptions. Actual results can differ materially because of territory, property mix, purchase discipline, repair scope, sales timing, advertising, labor, financing, owner involvement, and execution.
Legal franchisor: HomeVestors of America, Inc. FDD: issued April 22, 2026. Item 19 population: 795 U.S. franchised HomeVestors Businesses operating for all 12 months of 2025; one combined population, without separate Full Franchise and Associate Franchise results. Primary external benchmarks: 2025 U.S. home-flipping data from ATTOM and 2025 real-estate-industry wages from the U.S. Bureau of Labor Statistics. Date checked: July 18, 2026.
The 2025 median for all Covered Franchises. This is a property-price spread, not earnings.
Full-year U.S. franchised businesses included in Item 19.
Only 258 of 795 exceeded the $574,215 average, showing substantial right-skew.
The all-cohort median for the limited advertising categories defined in Item 19.
2025 median annual wage for general and operations managers in the real estate industry.
What does HomeVestors Item 19 actually measure?
Officially, Item 19 measures Gross Price Differential and selected advertising spend—not owner earnings, net income, EBITDA, cash flow, or even total business revenue. The applicable period is calendar year 2025, and the population is 795 U.S. franchised HomeVestors Businesses that operated for all 12 months.
The FDD defines Gross Price Differential as the total sales prices of properties sold minus the total purchase prices of those properties. It does not deduct repair work, real estate commissions, closing costs, seller concessions, property taxes, utilities, non-interest holding costs, labor, vehicles, insurance, Transaction Fees, Associate Royalty Fees, Marketing Fund contributions, or other operating expenses. The result is therefore closer to a gross property spread than to business profit.
The defined Ad Spend measure is also incomplete. It covers spending through an Advertising Council and the National Advertising Fund for property-acquisition leads, but excludes Marketing Fund contributions, Dig Leads, and advertising used to sell properties.
The Item 19 average Gross Price Differential was $574,215, while the median was $286,884 and only 32% of Covered Franchises exceeded the average. That gap indicates that a relatively small number of high-spread businesses pulled the average upward. The median is the more defensible central anchor for a buyer-level scenario, but it still precedes many major costs.
Median 2025 Gross Price Differential by Item 19 quartile; values are official gross-spread measures, not owner earnings.
Interpretation: The distribution is extremely wide. The bottom-quartile median was zero, while the top-quartile median exceeded $1.3 million before the substantial costs omitted from Gross Price Differential.
Source: 2026 HomeVestors of America, Inc. Franchise Disclosure Document, Item 19, Table 1, pp. 57–58. Franchisee-reported data were not audited.
Which outlets were excluded from the official results?
The 795-unit cohort is broad but survivor-filtered. Item 19 excludes 72 franchised businesses that opened during 2025, 151 that permanently closed, 36 that transferred or were reacquired, and 26 company-owned outlets. Results therefore describe full-year continuing franchised businesses, not a new buyer’s first year and not the complete set of businesses that operated at any point during 2025.
Item 19 also does not separate Full Franchise results from Associate Franchise results, owner-operated businesses from manager-supported businesses, or single-territory owners from larger portfolios. Those omissions are material because the Associate Royalty Fee and owner labor structure can change the amount ultimately available to an owner.
How was the annual owner-earnings range estimated?
The estimate applies transparent cost-retention assumptions to official Item 19 medians, then subtracts the corresponding median Ad Spend and a reproducible fixed-fee allowance. The results are independent estimates for a combined HomeVestors franchised-business format, not results reported by the franchisor.
The post-cost retention rate is the share of Gross Price Differential assumed to remain after repair costs, commissions, closing costs, non-interest holding costs, utilities, insurance, vehicles, ordinary non-manager labor, variable Transaction Fees, the Associate Royalty Fee when applicable, Marketing Fund contributions, and other unreported operating costs. The rates are editorial sensitivity assumptions because the FDD does not disclose those expenses.
The model then subtracts a $11,087 modeled annual fixed-fee allowance: the current $399 monthly fee ($4,788), the maximum disclosed $425 monthly technology fee ($5,100), one $899 annual convention fee, and the base $25 monthly Franchise Marketing Numbers fee ($300). Usage charges, optional add-ons, future fee increases, and a separately charged UGVille fee are not included.
| Scenario | Official GPD / Ad Spend anchors | Editorial retention assumption | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | Bottom-quartile median GPD $0; median Ad Spend $0 | 20% retention; immaterial at zero GPD | −$11,100 |
| Base | All-covered median GPD $286,884; median Ad Spend $35,000 | 40% of GPD remains before Ad Spend and fixed fees | $68,700 |
| Upside | Second-quartile median GPD $452,590; median Ad Spend $51,000 | 55% of GPD remains before Ad Spend and fixed fees | $186,800 |
The scenarios are analytical anchors, not probabilities. The upside uses the second-quartile median rather than the top-quartile median because the top quartile is highly skewed and the FDD provides no compatible expense data for converting that gross spread into earnings.
- Owner compensationThe owner-operator result does not deduct a salary for the managing owner. It therefore combines residual business profit with compensation for the owner’s work.
- Manager compensationA separate manager-supported view deducts the 2025 BLS median wage for general and operations managers in the real estate industry. Payroll taxes and benefits would make a fully loaded manager cost higher.
- Interest, depreciation, and capital spendingFinancing interest, loan principal, depreciation, and capital expenditures are excluded from the main estimate because property financing and accounting policies vary materially by owner.
- Personal taxesNo after-tax take-home amount is calculated. Federal, state, and local outcomes depend on entity structure, deductions, jurisdiction, and owner circumstances.
ATTOM reported that the typical 2025 U.S. flip generated $65,981 of gross profit and a 25.5% gross return before rehabilitation and other expenses. ATTOM also notes that experienced flippers estimate rehab and other expenses at roughly 20% to 33% of after-repair value. Those figures demonstrate why a purchase-to-sale spread cannot be treated as owner income, but they cannot be converted directly into a HomeVestors margin because Item 19 does not disclose property sales prices, deal counts, or repair budgets.
How does owner involvement change the result?
Owner involvement can shift the modeled annual result by approximately $104,740 before payroll burden because an active owner may perform work that otherwise requires a paid general and operations manager. This is an estimated labor-value adjustment, not an official HomeVestors earnings figure.
Item 15 requires the managing owner to hold equity and personally participate, full or part time, in direct operation. A manager-supported structure is therefore not the same as passive ownership: the owner must still satisfy the participation requirement. The BLS real estate industry wage proxy is national and industry-wide, so local recruiting costs, benefits, payroll taxes, bonuses, and the actual scope of the role can produce a different amount.
Independent annual scenarios before personal income tax and financing principal; the manager-supported value deducts a $104,740 wage proxy.
Interpretation: At the base GPD and cost assumptions, hiring a general and operations manager turns a positive $68,700 owner-operator benefit into an estimated $36,100 loss before payroll burden. The owner’s labor is therefore a major component of the apparent economic benefit.
Sources: Independent calculations using 2026 HomeVestors FDD Item 19 medians and Item 6 fees; U.S. Bureau of Labor Statistics, NAICS 531, 2025 median annual wage for general and operations managers. Values rounded after full-precision calculations.
Which franchise fees can materially reduce owner earnings?
Transaction-based fees, the Associate Royalty Fee, advertising requirements, and technology costs can materially reduce the property spread, but the FDD does not provide enough transaction detail to calculate their exact annual burden for the Item 19 population. The applicable amounts are official 2026 FDD obligations; their annual effect is uncertain because it depends on format, level, deal count, transaction sales prices, and advertising participation.
| Recurring obligation | Disclosed amount | How the estimate treats it | Key uncertainty |
|---|---|---|---|
| Transaction Fee | 0.80% to 3.0% of Sales Price by Level, with transaction-specific rules | Included inside the editorial post-cost retention rate | Item 19 omits total Sales Price and deal count |
| Associate Royalty Fee | Generally the greater of 2% of Sales Price or $500, subject to transaction rules | Included inside the retention rate when applicable | Item 19 does not separate Associate Franchise performance |
| Local / regional advertising | Level-dependent; commonly $1,000 or $5,000 monthly minimums at specified Levels | Uses Item 19 median Ad Spend by selected scenario | Item 19 Ad Spend excludes several advertising categories |
| Marketing Fund contribution | Currently $300 per specified transaction, with a disclosed maximum of $1,000 | Included inside the retention rate | Transaction volume is not disclosed |
| Monthly and technology fees | $399 monthly; technology up to $425 monthly | Annualized in the $11,087 fixed-fee allowance | Fees may increase; technology charge can vary |
| Franchise Marketing Numbers | $25 monthly for four numbers plus $0.29 per minute | Base monthly fee included; usage excluded | Call volume is unknown |
Source: 2026 HomeVestors of America, Inc. Franchise Disclosure Document, Item 6, pp. 8–19. Startup investment from Item 7 is not subtracted from one year of operating results because it is not an annual operating expense.
What could move actual earnings outside the modeled range?
Actual results can fall below or exceed the range because the largest cost categories are absent from Item 19 and because the official cohort excludes openings, closures, and transfers. The most important uncertainty is the percentage of Gross Price Differential consumed by property-level and operating costs.
- Acquisition discipline and repair varianceA modest error in purchase price, after-repair value, contractor scope, or completion time can consume a large share of Gross Price Differential.
- Territory and property mixItem 19 shows different quartile distributions across the Midwest, South, Northeast, and West, but it does not disclose owner earnings by region.
- Full versus Associate economicsThe official performance table combines formats, while the Associate Franchise carries an additional royalty structure.
- FinancingInterest, origination fees, extension fees, and principal payments can materially reduce cash available to the owner. The main estimate does not assume a common debt structure.
- Operating continuityItem 20 reports that franchised outlets declined from 981 at the start of 2025 to 862 at year-end, including 107 terminations and 46 nonrenewals. This does not prove that those businesses lost money, but it increases the importance of reviewing closure and transfer experience.
The confidence label is LIMITED because the current Item 19 provides a large same-brand population and useful GPD quartiles, but no direct owner compensation, operating profit, EBITDA, net income, cash flow, repair-cost ratio, financing cost, or format-specific margin.
What should a buyer verify before relying on this estimate?
A buyer should obtain the Item 19 substantiation and compare it with actual franchisee profit-and-loss records organized by format, owner role, territory, and maturity. The range remains uncertain until those omitted expenses and ownership structures are verified for the buyer’s intended operation.
- Request written Item 19 substantiationConfirm how property sales, purchase prices, zero-GPD businesses, transfers, and advertising records were compiled.
- Separate Full and Associate resultsAsk for deal-level examples showing Transaction Fees, Associate Royalty Fees, Marketing Fund contributions, and all advertising categories.
- Interview current and former franchiseesAsk for annual GPD, repair cost, closing and commission expense, holding period, payroll, advertising, financing interest, owner hours, and pre-tax cash retained.
- Match the intended owner roleCompare an active managing owner with a manager-supported structure; do not treat owner labor as passive profit.
- Reconcile debt separatelyModel each property’s interest, fees, extension risk, and principal timing instead of applying a generic debt-service percentage.
- Review Item 20 exitsContact businesses that closed, transferred, or did not renew, recognizing that some may be subject to confidentiality provisions.
The Federal Trade Commission franchise guide explains that Item 19 must contain the franchisor’s financial performance claims and recommends requesting substantiation and speaking with current and former franchisees.
What is the strongest defensible earnings range?
The strongest defensible annual range is approximately an $11,000 loss to $187,000 of estimated owner-operator benefit, with a base scenario near $68,700. It is scenario-based, not an official HomeVestors profit disclosure. The central driver is how much of Gross Price Differential remains after repairs, transaction expenses, advertising, labor, and franchise fees; owner involvement is the next major driver because replacing an active owner with a paid manager can reduce the modeled result by roughly $104,740 before payroll burden.
The largest unresolved uncertainty is that Item 19 does not disclose the cost bridge from Gross Price Differential to operating profit and does not separate Full Franchise, Associate Franchise, owner-operated, and manager-supported populations. Before making a decision, a buyer should reconcile the franchisor’s written Item 19 substantiation with franchisee profit-and-loss statements and interviews, including businesses listed in Item 20 that closed, transferred, or did not renew.