A group headed by former Denver Mayor Wellington Webb has been awarded the Colorado master franchise for a company that sells lease- to-own programs for potential home owners.
As master franchisee for National Home Buyers Assistance LLP, based in Denver, Webb’s group will be in charge of selling franchises in Colorado, as well as supporting 27 current franchisees in the state.
National Home Buyers Assistance, which began franchise operations in 2003, is headed by local businessman Michael Shinn. Webb has been a member of the company’s advisory board for two years. He was unavailable for comment Wednesday.
The private, for-profit company offers a lease-to-own program for potential homeowners, many of whom may not be able to qualify for a mortgage at the time. It enables them to move into the homes of their choice immediately, the company says. That’s possible because a company franchisee buys the home and leases it to the prospective buyer for a minimum of 12 months, at which point the prospect has the option to buy.
The company’s typical franchise costs $25,000 plus a $5,000 marketing fee, said Keith Olsen, senior vice president of corporate communications and sales.
The fee for a master franchise, which he declined to disclose, varies depending on the population of the region being served.
Franchisees also must have a credit score of 700 or more and enough assets to purchase properties, Olsen said. The value of franchisee assets depends on what state they’re in. In Arkansas, for example, a franchisee may need $200,000 in assets, while in California, where real estate is more expensive, a franchisee could be required to have $500,000.
“We’ve been very selective with the investors we have,” he said.
The company started franchising after test-marketing its alternative financing concept in Colorado and Florida. It has 105 franchisees in 27 states, and seven master franchisees in six states. The company says it has generated more than $400 million in real-estate sales nationally.
In addition to Webb, the company’s advisory board includes Henry Cisneros, formerly Housing and Urban Development secretary. Webb’s group includes his brother Joe Webb, his son Anthony Webb and several business associates, Olsen said.
Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.
