How to Start a Sotheby's International Realty Franchise in 7 Steps: Checklist

The 2026 FDD makes market quality and brokerage performance central gates. The proposed Office must be in an Eligible Market, defined as a market where the median sales price for homes during the Measurement Period is at least 1.5 times the U.S. median sales price, and the applicant must satisfy the franchisor’s financial, professional, operational and other standards.

For an existing brokerage, the Guidelines can be met through one of several tests: customer average selling price in the top 40% of the Geographic Market; Transaction Value in the top 40%; ranking first, second or third by average selling price or Transaction Value; or a newly formed office staffed substantially by agents from a licensed broker that would have met one of those tests. The franchisor makes the eligibility determination.

The FDD also preserves a limited 10% exception mechanism for applicants outside the Guidelines; it is discretionary, not an applicant right. No numeric net-worth or credit-score minimum is disclosed as a general qualification gate, and meeting the Guidelines does not guarantee an award.

The verified sequence is qualification first, then federal disclosure review and agreement execution, followed by conversion or start-up readiness against the agreed Opening Date. Site review can occur as part of the franchise sales approval process, and the FDD does not establish a separate universal “opening certificate” after construction or setup.

Sources: 2026 U.S. FDD, Items 1, 5, 8, 9, 11, 12 and 15; Real Estate Franchise Agreement §§1.6–1.7, 4.6–4.10, 5 and 6. Federal disclosure timing: FTC Consumer’s Guide to Buying a Franchise.

The periods below use the same unit—days—but different triggers, so they must not be added into one total. The 45-day conversion and 45–60-day start-up periods run from the Franchise Agreement Effective Date; the other bars describe separate review or cure windows.

The franchisee finds the Office. Sotheby’s International Realty Affiliates LLC inspects it and may approve or reject it based on current standards including location, exterior, signage visibility, access, parking, landscaping, reception/lobby areas, work areas and broker or manager space.

Advance written approval is required for each Office location, and the franchisee must execute a Franchise Agreement or applicable Location Addendum before displaying the Marks or offering Sotheby’s International Realty services from that location. Site approval is not a protected territory: the standard Franchise Agreement is non-exclusive and grants no area or territorial protection.

If the Office misses appearance standards, the franchisor may issue a corrective plan and condition the Franchise on completion within 90 days; failure can lead to termination. Exterior sign design requires advance written approval, and trademark-bearing signage and stationery generally must come from Approved Suppliers unless an alternative is approved.

The process divides cleanly among the applicant or franchisee, the franchisor, and third parties. Franchisor approval can determine eligibility and brand use, but it does not replace the franchisee’s responsibility for the Office, licensing, insurance, suppliers, contractors or government approvals.

No universal pre-opening training completion gate is disclosed. The mandatory Orientation is scheduled after signing and, under Item 11, is to be completed by the Responsible Broker or an agreed individual at the next scheduled Orientation after the Main Office Opening Date. The program is currently two days with 15 classroom hours and zero on-the-job training hours.

The attached Franchise Agreement uses different trigger wording: it requires the Responsible Broker or designee to attend the next scheduled Orientation following the Effective Date and treats nonattendance as a material breach. The buyer should therefore confirm the controlling trigger in the final signed agreement.

Orientation covers Brand Protection, Establishing a Presence On-line, Recruiting, Using Tools and Systems, Marketing, Building a Value Package, and Learning and Development. The Responsible Broker must hold the real estate broker license required by the state where the Office is located; the franchisee, Owners and any office manager must participate in management as required by Item 15.

No. The initial U.S. franchise is generally a Main Office opened by converting an existing brokerage or, in certain cases, starting a new brokerage. Additional Branch Offices and Limited Purpose Offices are separate expansion paths that require their own approvals and addenda.

The standard U.S. offer reviewed here discloses no Area Development Agreement or multi-unit development schedule. Each Future Office requires separate approval and signed documentation.

Use the checklist below as a document-verification list, not as a substitute for the Franchise Agreement, P&P Manual, state real estate law, lease review or local permitting rules. The 2026 FDD does not create one universal municipal permit checklist for every U.S. market.

The most important date is the contract’s Opening Date because Section 1.7 says it can be changed only with prior written franchisor approval. The FDD’s 45-day and 45–60-day periods are typical opening periods, while the blank Opening Date inserted in the signed agreement is the contractual milestone to verify.

Before signing, compare the final Franchise Agreement with the FDD attachment and request current updates. FTC guidance explains that certain franchisor-initiated material agreement changes may trigger a separate seven-calendar-day review period, distinct from the 14-calendar-day FDD period. See the FTC document-review guidance and FTC franchise guidance.