$222

Business Description

We are a California limited liability company, originally incorporated on July 16, 1981, and converted to a limited liability company on July 2, 2007. We changed our legal name from Coldwell Banker Residential Affiliates, Inc. to Coldwell Banker Real Estate Corporation effective March 1, 1997, and then upon conversion to the limited liability company, we changed our name to Coldwell Banker Real Estate LLC as of July 3, 2007. We do not do business under any other name, except for Coldwell Banker Commercial Affiliates, as further described below. We are a wholly owned subsidiary of Realogy Services Group LLC (“RSG”), a Delaware limited liability company, a direct wholly owned subsidiary of Realogy Group LLC (“Realogy Group”). Realogy Group is a direct wholly owned subsidiary of Realogy Intermediate Holdings LLC (“Intermediate Holdings”), a Delaware limited liability company, and a direct wholly owned subsidiary of Realogy Holdings Corp., a Delaware corporation (“Realogy Holdings”). Realogy Franchise Group LLC (“RFG”), a Delaware limited liability company, which is a wholly owned subsidiary of RSG, provides to us administrative services and RSG and its subsidiaries provide certain shared services, as described below. Our principal business address, as well as the principal business address of RFG, RSG, Realogy Group, Intermediate Holdings and Realogy Holdings, is 175 Park Avenue, Madison, NJ 07940. There are no predecessors that need to be disclosed in this Item 1. On October 12, 2012, Realogy Holdings consummated an initial public offering of shares of common stock and its shares are listed on The New York Stock Exchange under the symbol, “RLGY.” Realogy Group and Realogy Holdings issue joint audited annual financial statements and continue to serve as our Guarantors.

Prior Experience

We have been offering franchises for residential real estate brokerage offices since January 1982 under the service mark “Coldwell Banker®.” We, through our unincorporated division, also have been offering separate franchises for commercial real estate offices since December 1998 operated under the service mark “Coldwell Banker Commercial®.” In the past we offered residential franchisees the opportunity to conduct commercial brokerage services from their existing office under the Coldwell Banker Commercial® service mark and System through an addendum to their franchise agreement. We no long offer commercial addenda to new Coldwell Banker® residential franchisees. We do not own or operate any real estate offices in the United States, although our affiliates do operate such offices (as described below). We have never granted franchises in other lines of business.

Business Offered

We offer franchises for real estate sales offices in the United States to owners of existing real estate brokerage businesses and in certain situations we may offer a franchise to newly formed real estate brokerages (the “Franchise” or the “Business”). The Franchise authorizes you to operate a real estate sales office using the Coldwell Banker® System using the Coldwell Banker® service mark and other trademarks, service marks, trade names, designs, logos and other commercial symbols we periodically designate (collectively, the “Marks”) and using the System we have developed, which includes access to brand specific systems, productivity resources, basic business development support, education, real estate referral and broker communications procedures, marketing and advertising services, products and other support funded by the Brand Marketing Fund and various other items (the “System”), all in accordance with the terms of our Real Estate Franchise Agreement (“Franchise Agreement”) and the mandatory provisions of the Policy and Procedures Manual (“P&P Manual”). If you meet our financial, professional, operational and other standards, operate in a market in which we seek to be represented, and agree to pay our initial franchise fee, we may grant you a Franchise. The Franchise permits you to offer residential real estate brokerage services from a specified office location (the “Main Office”) and other authorized Office locations (the Main Office and other authorized office locations collectively referred to as a “Coldwell Banker® office” or “Office”) utilizing the System. You will be required to sign our Franchise Agreement (see Exhibit C-1) and Security Agreement (Exhibit F to the Franchise Agreement) and you will be able to offer only real estate brokerage services, as described above, at your franchised location, unless we provide written approval of other real estate related excluded businesses that may be operated from the Office(s), subject to the restrictions of the Franchise Agreement. For additional Branch Offices (as defined in the Franchise Agreement) that we approve, you will be required to sign our Location Addendum to the Franchise Agreement (Exhibits C-2 and C-3). Except for those expressly stated obligations in this disclosure document, the Franchise Agreement or any other agreement, including those agreements referenced herein or attached as Exhibits to this disclosure document that you sign, we and our parents, subsidiaries and affiliates make no representations or implied warranties to you either by course of conduct or otherwise. We have a diversity and veteran program under which eligible franchisees may pay a reduced initial franchise fee. As of the issuance date of this disclosure document, the reduced initial franchise fee is $5,000. This program may be modified without notice at any time. We may establish and/or eliminate any benefits as we deem in the best interests of the System. We may from time to time introduce pilot programs to qualifying franchises who operate at least one franchised office. These pilot programs may be offered in certain test markets and the terms and conditions of each office will vary depending upon circumstances.

Initial Fees

If you are purchasing a franchise from us, you will pay us an initial franchise fee of $25,000 for the Main Office when you sign the Franchise Agreement. If we approve you for a Coldwell Banker® residential real estate franchise, we will countersign your Franchise Agreement. The initial franchise fee is non-refundable and is fully earned by us upon our countersignature. As further described in Item 1, we have a diversity and veteran program under which eligible franchisees may pay a reduced initial franchise fee. As of the issuance date of this disclosure document, the reduced initial franchise fee under the program is $5,000. The initial franchise fee for your second office, a Branch Office, will be $10,000 and for any subsequent Branch Office will be $7,500 and due when the Branch Office is added to the Franchise Agreement. If you are an existing franchisee and acquire another qualifying real estate brokerage business which you combine into your Office(s), we will not charge you an additional initial franchise fee. If you are approved to open additional Coldwell Banker® Branch Office(s), you will sign a Location Addendum to your Franchise Agreement to amend it to reflect the existence and location of the additional Branch Office(s) (see Location Addenda - Exhibits C-2 and C-3). We may condition the approval of additional offices on certain other terms and conditions, including minimum annual royalty fees, which terms will be included in the Location Addendum. We do not refund any initial franchise fees, except that we will refund your initial franchise fee if we do not accept you as a franchisee. You must pay us any franchise fees in a lump sum, unless we agree to other arrangements or to payment terms under the financing programs described in Item 10. We have the right to vary, waive (in whole or in part), negotiate or make an exception to our published fee structure and/or payment terms for any reason, including without limitation large or otherwise significant transactions. We also have the right to negotiate conversion funding or other incentives that may vary in type, amount and duration. Our exercise of these rights may have the effect of directly or indirectly decreasing the initial franchise fee. See Item 10. If we permit you to open a Limited Purpose Office, we will charge you a one-time non-refundable fee of $1,000, and you will be required to sign a Limited Purpose Office Addendum. See Item 1. In 2018, initial franchise fees paid by franchisees ranged from $0 to $25,000 for a Main Office, and $0 to $10,000 for a Branch Office.

Financing

Neither we nor any related company is obligated to provide you any financing. We or a related company, however, have the right to offer you financing to assist with conversion costs or growth opportunities. This financing will be based on several factors, including without limitation your financial need, credit history, ability to repay, net worth, your business operations, including history of growing your business, and your stability as well as our need for the development of your market area. Depending upon these factors, we may offer you financing up to an amount equal to a percentage of the fees we expect to receive from your operations. We have the right to require you to furnish us with financial statements, tax returns and other documents. The terms of any financing, including the amount, the term of repayment, the amount of principal to be repaid, the amount of interest to be paid (where applicable), the security and other relevant terms are subject to negotiation between the parties as described below. We may require you to undergo a six-month operational review of your Franchise prior to the granting of any financing. The review will include a financial analysis, assessment of the use and understanding of our programs, and your adherence to the requirements under the Franchise Agreement. Except as disclosed above, we do not offer financing that requires you to waive notice, confess judgment or waive a defense against us or the lender, although you may lose your defenses against us and others in a collection action on a Note that is sold or discounted. We have no plans to sell or assign any Note from you or any other franchisee; however, we have the right to do so in the future. Upon any sales or assignment, we will not remain primarily obligated to provide the financial goods or services. We do not guarantee your obligations to third parties. If RSG has a lender that provides finance opportunities to franchisees under the Preferred Alliance program, we or RSG may receive payments from such lender. As of the issuance date of this disclosure document, RSG does not receive payments from lenders. See Item 8.

Franchisee Revenue and Profit

We do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting Elisabeth Gehringer, 175 Park Avenue, Madison, New Jersey 07940, (973) 407- 2383, the Federal Trade Commission, and the appropriate state regulatory agencies.