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Business Description

We are a Delaware limited liability company, originally incorporated on January 31, 1996, and converted to a limited liability company on July 2, 2007. We do not do business under any other name. 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, a Delaware limited liability company (“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 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, New Jersey 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 ERA® real estate sales offices since March 1996. Our predecessors had been offering franchises for ERA® real estate sales offices since 1972. In 2010, we also began offering ERA Powered® franchises to be operated under the service marks “ERA Powered® ” and “ERA Real Estate Powered®”, as further described below. Although one or more ERA® officers and employees are licensed New Jersey real estate brokers and some are former brokers or associates, we have never owned or operated an ERA® real estate sales office, an ERA Real Estate Powered® office or other real estate brokerage offices, although our affiliates may operate such offices (as described below). We have not offered franchises in any 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 to persons who want to start a real estate brokerage business (the “Franchise”). The Franchise authorizes you to operate a real estate sales office using the “ERA® Identification” and the ERA® Marketing System. The ERA® Identification refers to the ERA® service mark and other trademarks, service marks, designs, logos and other commercial symbols we periodically designate (collectively, the “Marks”). The ERA® Marketing System is a system that 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 ERA® brand marketing fund (“Brand Marketing Fund” or “BMF”) and various other items. 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, commercial real estate services, and limited property management services from a specified office location (the “Main Office’) and each other authorized office locations (the Main Office and each other authorized office location collectively referred to as an “ERA® Office” or “Office”) utilizing the ERA® Identification and Marketing System (collectively referred to as the “System”). You will be required to sign a “Franchise Agreement” (see Exhibit C) and Security Agreement (Exhibit F to the Franchise Agreement) and follow the mandatory provisions of the “ERA® Policies and Procedures Manual” (the “P&P Manual”) in conducting your business. You will be able to offer only real estate brokerage services, as described above, at your franchised location(s), unless we provide written approval of other real estate related excluded businesses to 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 (see Exhibit C-3 and Exhibit C-4). 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 applicable franchisees may receive benefits that include a lowering or waiver of the initial franchise fee. 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 offer an “ERA Powered® Franchise” for Offices in various markets. An ERA Powered® Franchise is essentially the same as an ERA® Franchise, except that, to take advantage of a franchisee’s own brand recognition, the franchisee is granted the right to use the “ERA Powered®” and “ERA Real Estate Powered®” Mark in conjunction with its own brand or trade name. An ERA Powered® Franchise (sometimes referred to in this disclosure document as ERA Real Estate Powered®) is typically offered to new converting franchisees, who typically have significant revenue of a at least a minimum of $5,000,000, significant market share, significant recognition of their own trade name or brand and have been in business for a minimum of 10 years. We have the right to consider other factors in granting an ERA Powered® Franchise, including without limitation, the prospective franchisee’s volume of transactions and reputation in the market place. We also may offer existing franchisees an ERA Powered® Franchise provided they meet the above requirements, although we have the right to vary them for existing franchisees. We also have the right to periodically waive or change the ERA Powered® Franchise eligibility requirements for new and existing franchisees. If you are selected to participate in and utilize the ERA Powered® Franchise, you must sign an ERA Real Estate Powered® Amendment to the Franchise Agreement. See Exhibit C-1. References to ERA® real estate brokerage offices in this disclosure document may also mean ERA Powered® real estate brokerage offices, as applicable. We may offer a “Town & Country Franchise” for Offices in small markets. To be eligible for consideration for a Town & Country Franchise, the following criteria must be met: (1) the Office must either be located outside of a Standard Metropolitan Statistical Area (as defined by the United States Office of Management and Budget and published by the Department of Commerce) or in a town having a population of less than 15,000 people; (2) the Office’s gross sales volume for the preceding calendar year must not have exceeded $10 million; and (3) the total gross sales volume for all real estate sales offices in the town in which the Office is to be located must not have exceeded $30 million during the preceding calendar year. We have the right to periodically waive or change these criteria. To obtain a Town & Country Franchise, you must sign a Town & Country Amendment to the Franchise Agreement. See Exhibit C-2.

Initial Fees

If you are purchasing a franchise from us, the initial franchise fee you pay will depend on whether or not the Main Office will be located in a Town & Country market (see the ERA® Town & Country Franchise Amendment, Exhibit C-2). The initial franchisee fee for a standard Main Office is $25,000 and the initial franchise fee for a Main Office located in a Town & Country market is $12,500. If we approve you for an ERA® franchise, we will countersign your Franchise Agreement. The initial franchise fee is nonrefundable 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 receive a discount or waiver of the initial franchise fee. The initial franchise fee for each additional Branch Office is $7,500, regardless of the size of the market and is 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 that you combine into your Office(s), we will not charge you an additional initial franchise fee. If you are approved to open additional ERA® 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, Exhibit C-3 or C-4). 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. 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 between $1,000-$3,500, and you will be required to sign a Limited Purpose Office Addendum. See Item 1. In 2017, initial franchise fees paid by franchisees ranged from $0 to $25,000 for a Main Office in a standard market, from $0 to $12,500 for Main Office located in a Town & Country market, and from $0 to $7,500 for a Branch Office. There may be participation fees for other voluntary programs. See Item 6.

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 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. 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 sale 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 payment 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 David Collins, 175 Park Avenue, Madison, New Jersey 07940, (973) 407-5887, the Federal Trade Commission, and the appropriate state regulatory agencies.