SHOWHOMES

Item 7 details the initial investment from $39,895 to $179,595, including a $12,995 franchise fee, real estate costs if needed, equipment, inventory for staging, and initial marketing. Ongoing fees include tiered royalties (7%-10% on service sales by volume, plus 5% on product sales), a 2% ad fund (or greater of 2% or $140/month, up to 4%), and $295/month technology fee—adding up to effective 10% total royalties. Item 19 discloses average gross revenue of $486,242 and median $446,274 for 2023, suggesting strong top-line performance for those who scale, though no profit figures are provided, so EBITDA would depend on controlling those fees and local market demand from realtors and banks.

The system shrank 15% from 26 to 22 locations between 2022-2023, with 5 terminations and 1 non-renewal signaling potential operator struggles, despite 10 projected new units. SBA records show 8 loans averaging $149,000 but a high 25% default rate, hinting at financing hurdles or underperformance for some. One litigation case involved fraud claims from a franchise resale, settled by termination—mostly isolated but worth noting for due diligence. Overall, revenues impress for the low entry but contraction and defaults suggest vetting territories and support closely before investing.