For a single U.S. NextHome Standard Model office, that is the strongest defensible annual range from the available evidence. The first range is an estimated pre-tax business residual after normal operating deductions; the second is an estimated owner-operator benefit that adds the market value of full-time management work. Neither range is reported by NextHome.
Data basis
Legal franchisor: NextHome, Inc. FDD: issued January 7, 2026; amended February 13 and May 29, 2026. Item 19 status: no franchised- or company-owned sales, income, or profit representation. Applicable model: a one-office Standard Model analytical case; the Large Office Model is separated because it has materially different fees and a 150-associate qualification threshold. Benchmarks: IRS Statistics of Income, Tax Year 2022, “Offices of real estate agents and brokers,” and BLS May 2025 General and Operations Managers. Date checked: July 20, 2026.
Estimated pre-tax business residual before financing principal and personal taxes.
SCENARIOIncludes $105,770 of modeled full-time management labor value; it is not passive profit.
SCENARIOPer active corporate return in the IRS 2022 exact minor industry, not per NextHome office.
BENCHMARKIRS total receipts less total deductions divided by total receipts.
DERIVEDOfficial Item 20 count at September 30, 2025; company-owned offices were zero.
OFFICIAL FDDWhat does NextHome’s 2026 Item 19 actually disclose?
It discloses no sales, revenue, profit, cash flow, EBITDA, owner compensation, or owner earnings figure. This is an official finding for the current U.S. offer: the 2026 FDD says NextHome does not make financial performance representations about franchised or company-owned outlets. See 2026 NextHome FDD, Item 19, page 62.
That means there is no same-brand average unit volume, median sales, operating margin, or percentage-achieving threshold to anchor an earnings claim. The Federal Trade Commission’s guidance on evaluating potential franchise earnings explains why gross sales and owner profit must not be treated as interchangeable and why buyers should request written substantiation for any financial claim.
Item 20 reports 587 franchised offices and zero company-owned offices at September 30, 2025, down from 608 franchised offices at the start of 2025. Because there are no company-owned outlets, no same-brand corporate-store profit proxy is available. See 2026 NextHome FDD, Item 20, pages 62–63.
How was the annual earnings range estimated?
The estimate applies a transparent revenue-and-margin sensitivity to an official U.S. corporate benchmark. It is an independent scenario for one Standard Model office, not an official NextHome result and not a prediction for a particular territory.
The IRS 2022 Corporation Income Tax Returns Complete Report lists 195,063 active corporate returns in the exact minor industry “Offices of real estate agents and brokers.” Those returns reported $121.145 billion of total receipts, $104.109 billion of total deductions, and $17.036 billion of total receipts less total deductions. The resulting averages are $621,056 of total receipts and $87,334 of pre-tax residual per corporate return.
Base residual margin: $17.036 billion ÷ $121.145 billion = 14.06%.
Manager-run residual: scenario receipts × scenario residual margin.
Owner-operator benefit: manager-run residual + $105,770 annualized management labor value.
- Revenue spread: Conservative, Base, and Upside use 80%, 100%, and 120% of the IRS per-return average. This spread is analytical, not FDD-reported.
- Margin spread: 11.06%, 14.06%, and 17.06% use the benchmark margin minus three percentage points, the benchmark, and the benchmark plus three percentage points.
- Fee treatment: the IRS margin is an all-in net operating proxy whose deductions already include compensation, wages, rent, interest, depreciation, advertising, taxes, and other deductions. NextHome fees are therefore not subtracted again; doing so could double-count costs. The fee schedule is shown separately for buyer verification.
- Rounding: calculations use full-precision inputs; scenario outputs are rounded to the nearest $1,000.
Estimated manager-run residual by scenario
Estimated annual results for one U.S. Standard Model office using the 2022 IRS benchmark and the 2026 FDD structure; not an Item 19 result.
Interpretation: receipts and residual margin compound; the upside scenario is not a probability statement or a franchisor forecast.
Source: Derived from IRS Statistics of Income, 2022 Publication 16, Table 5.1, exact minor industry “Offices of real estate agents and brokers,” with explicit 80%/100%/120% revenue and ±3 percentage-point margin assumptions. Not an Item 19 result.
| Scenario | Receipts anchor | Residual margin | Annual result |
|---|---|---|---|
| Conservative | $496,845 | 11.06% | $55K manager-run $161K owner-operated |
| Base | $621,056 | 14.06% | $87K manager-run $193K owner-operated |
| Upside | $745,267 | 17.06% | $127K manager-run $233K owner-operated |
How does owner involvement change the result?
Active owner operation adds modeled labor value, not free profit. The 2026 FDD permits owners not to supervise personally, but every office must employ a licensed Principal Broker who devotes full time and best efforts to management; the Principal Broker or a Sales Manager must supervise financial and operational activity. See 2026 NextHome FDD, Item 15, pages 53–54.
The owner-operator scenario assumes a properly licensed owner performs the full-time management role that otherwise would be paid. The labor value is $105,770, derived from the May 2025 BLS median hourly wage of $50.85 for General and Operations Managers multiplied by 2,080 hours. The BLS May 2025 national wage table is cross-industry, so local real estate brokerage compensation may be materially lower or higher.
Manager-run residual versus owner-operator benefit
Estimated annual comparison for one U.S. Standard Model office; owner-operator figures add May 2025 BLS management labor value and are not passive profit.
Interpretation: the $105,770 difference compensates the owner for full-time work. It should not be described as passive distributions or pure business profit.
Source: Manager-run scenarios above; owner-operator benefit adds the annualized BLS May 2025 median wage for SOC 11-1021. Owner participation rules: 2026 NextHome FDD, Item 15, pages 53–54.
- Manager-run residual
- Estimated cash-generating business result after the broad benchmark’s normal deductions, including compensation and wages, but before financing principal and personal income taxes.
- Owner-operator benefit
- Manager-run residual plus the modeled market value of management labor performed by the owner. It combines labor compensation and residual profit.
- Interest and depreciation
- Included only to the extent reflected in the IRS industry aggregate. The model does not substitute the buyer’s actual loan interest or depreciation schedule.
- Debt principal, capital spending, and taxes
- Financing principal, capital expenditures beyond benchmark depreciation, and personal income taxes are excluded. No after-tax take-home figure is presented.
Which NextHome fees can move actual owner earnings?
Agent plan selection and transaction activity can materially change the office’s recurring franchise cost. These are official 2026 FDD obligations, but they are shown separately rather than subtracted from the all-in IRS margin proxy.
| Recurring obligation | Standard Model, five-year term | Large Office Model | Analytical treatment |
|---|---|---|---|
| Base franchise fee | $125 per month | $125 per month | Official FDD fact; not separately deducted from the all-in IRS margin. |
| Non-team royalty | $200 monthly flat-fee plan or $395 per closing transaction-fee plan; at least one non-team associate must use the flat-fee plan when non-team associates exist. | Full-tech and lite-tech combinations use monthly and per-closing charges. | Actual cost depends on associate mix and closings. |
| Technology fee | $80 per transaction side, plus applicable sales tax. | $80 per full-tech side or $20 per lite-tech side; combined annual agent caps apply. | Must be rebuilt from office-specific sides and plan elections. |
| Large Office minimum | Not applicable. | $108,000 system-wide Minimum Annual Fees across the owner and controlled affiliates; it is a floor, not a cap. | The published earnings range does not apply to the Large Office Model. |
| Other recurring items | Annual disaster-relief contribution of $299, $499, or $899 by staff count; annual conference charge up to $899 per required attendee if held; actual MLS pass-through costs and other applicable charges. | Verify against the current fee schedule and the office operating plan. | |
Source: 2026 NextHome FDD, Item 6, pages 15–29. Initial franchise fees and Item 7 startup investment are not treated as annual operating expenses.
What uncertainty matters most?
The largest unresolved issue is the absence of a NextHome office-level revenue and expense distribution. This is an explicit uncertainty for the 2026 offer and is why the evidence-confidence label is Limited.
The IRS metric is an aggregate per corporate return, not a median and not necessarily a one-office result. A return may represent one office, multiple offices, a small corporation, or a large platform. It does not isolate NextHome franchisees, Standard Model offices, new offices, mature offices, owner-operated offices, or manager-run offices. A few large corporations can also lift an average.
The scenario does not know the office’s retained commission revenue, agent split structure, transaction-side count, recruiting pace, local broker compensation, lead spending, office rent, errors-and-omissions insurance, or financing. Those factors can move actual owner earnings more than the analytical spread shown here.
What should a buyer verify before relying on the range?
A buyer should replace every external proxy with written, office-specific evidence. This verification list applies to the current U.S. Standard Model and focuses on the variables that determine annual pre-tax owner benefit.
- Ask NextHome to confirm in writing that Item 19 contains no financial performance representation and request written substantiation for any separate sales, income, profit, or projection statement made during the sales process.
- Interview current and former franchisees listed in Item 20. Request office P&Ls showing gross commission income or retained brokerage revenue, agent splits, manager compensation, occupancy, marketing, technology, insurance, and all franchise charges.
- Separate one-office Standard Model economics from multi-office portfolios and the Large Office Model. Confirm the number of Licensed Associates, flat-fee versus transaction-fee elections, transaction sides, teams, branch offices, and shared overhead.
- Determine who will serve as Principal Broker and Sales Manager, whether the owner is properly licensed, how many hours the owner will work, and what replacement compensation is realistic in the local labor market.
- Model loan interest and principal separately. Do not confuse pre-tax operating residual, owner salary, draws, distributions, retained earnings, and after-tax take-home pay.
- Reconcile the proposed territory and office plan with Item 20 openings, closures, transfers, and the September 30, 2025 outlet population; then test lower transaction volume and slower agent recruiting.
What is the decision-useful owner earnings range?
The strongest defensible range is approximately $55,000–$127,000 of annual pre-tax manager-run residual, or $161,000–$233,000 of estimated owner-operator benefit for a one-office Standard Model analytical case. It is scenario-based, not official NextHome performance. The most important earnings driver is retained office revenue after agent compensation and operating costs. The largest unresolved uncertainty is that Item 19 provides no NextHome sales or profit distribution and the IRS benchmark is per corporate return rather than per franchise office. Before investing, a buyer should verify the Item 19 status, request written substantiation for every financial statement, and reconcile the scenario against current and former franchisee P&Ls, owner roles, agent plans, transaction sides, recurring fees, and financing.