The following are a list of common questions and answers. More detailed information can be provided via the Franchise Disclosure Document (FDD) which can be provided upon request.
I’ve been building in my market for many years, why should I consider a franchise?
It depends on your goals and market position. Here are some considerations:
- If you’re looking for competitive advantages we offer many
- If you find customers today to be more demanding and want better processes to deliver superior service
- If you’re looking for more consistent sales and more predictable results
- If a less risky “presale” business model is more appealing than an inventory heavy approach
- If you’re looking to grow and scale your business and take it to the next level
- If you’re interested in better management systems to allow you to be a more effective business manager instead of just a “builder”
What does an AR Homes® franchise cost?
The initial franchise fee is $50,000, which includes the cost of extensive on-site training. This Initial Franchise Fee is a one-time fee and non-refundable.
What are the royalty fees?
The on-going franchise fee, also known as royalty fee is 4.25% for a presale (to be built home) without lot and 3.50% for a home and lot package.
What kind of training will we receive?
We provide extensive training for you and your team. New franchises received a combination of classroom and on-site training, where we send the trainers to your office to work on your information alone. We will help train and support your new hires as they join your team. We also offer regular classroom training and specialized group sessions throughout the year. We also provide extensive training documentation and videos on our company “intranet” as well as manuals that will be provided. Our proprietary software also has training embedded for reference of key functions.
What is the typical volume of an AR Homes® franchise?
Sales volumes vary greatly from franchise to franchise based on a number of factors including the market, number of model homes they operate, their pricing strategy, the quality of Sales Teams and the sales management skills of the Building Company President.
Are franchises required to operate a model home and why?
Yes, all AR Homes® franchises must operate at least one furnished model home at all times. Model homes are our “store fronts” and they get results. All models are required to be open to the public 7 days per week and are typically open 18 – 24 months. Well operated model homes generate consistent customer traffic which franchises convert to presales using our unique proprietary sales process. There are approximately 50 Arthur Rutenberg Homes models open today.
Does AR Homes® provide financing?
We do not provide direct financing for start up expenses, however, we do offer a funding program for model homes that you can elect to utilize. This program is outlined in the FDD.
How much capital is necessary for an AR Homes® franchisee?
You must capitalize your franchise with not less than $240,000.
Do AR Homes® franchises operate in a defined territory?
Yes, we will work with you to define a territory in which you will operate your franchise in your market. The defined territory will incorporated in your Franchise Agreement.
Do I need to have prior homebuilding experience to own a franchise?
The Building Company President of each franchise must have extensive homebuilding industry and business management experience and must be approved by us. If you are not experienced in the industry but wish to own a franchise you will be required to hire a Building Company President. We have many franchises with Building Company Presidents operating the business for franchise owners.
Who decides what prices I will charge for homes?
You will manage your company “locally” and set your own margins and prices based on your market knowledge and competitive environment.
Do you have a vendor program?
Yes, we are able to use our combined size to an advantage and have relationships with leading national brands who provide preferential pricing and model home discounts to our builders. Our vendor partnerships are important relationships.
Do you provide business forms and marketing materials I can use?
Yes. We have an extensive library of useful forms and documents that will aid you in running an efficient operation. These range from Job Descriptions for all typical company positions to Building Agreements, Scopes of Work, Subcontractor Agreements and much more. You will also receive advertising support, flyers and other marketing materials that have been professionally prepared to promote your business within your local market. We have a full time in-house advertising department that produces these materials for our builders.
What is the term of the franchise agreement?
The initial term of the agreement is ten years with renewable options. There is no fee to renew your franchise agreement if you sign a new agreement with us at least six months before the prior agreement expires.
How long will it take to open my first model home?
The time to open your first model depends on a number of variables including selecting a desirable location and model plan. It is our desire to get you up and running as quickly as possible, so we typically discuss these issues during the “discovery” process prior to the awarding of the franchise. We also work with you to set up an active price list so you are ready to sell homes within 4 months of the signing of your Franchise Agreement.
May I speak with other AR Homes® Franchise Builders about their experience?
Yes, in fact, we encourage you to do so. The FDD contains a list of all current Franchise Builders, their locations and their phone numbers.
How long has AR Homes® been in business?
We’ve been franchising custom homebuilders for 40 years, but our company legacy extends nearly seven decades when Art Rutenberg began his homebuilding career in Clearwater, FL in 1953. Art pioneered franchising for the homebuilding industry with Arthur Rutenberg Homes in 1980. Our very first franchisee is still part of our builder network and owns two franchises today.
How do I get started?
Contact us so we can schedule a time to speak and discuss the next steps.