Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 129

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 8
Chunk 129
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 revenue is derived from a
stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue streams, with the majority of our revenue
derived from commissions paid by consumers who transact business with our and our franchisees’ agents, royalties paid by our franchisees,
dues and technology fees paid by our sales agents, our franchisees, and our franchisees’ agents. Our major revenue streams come
from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property management services, (iii) franchise
royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v) coaching, training and assistance fees,
(vi) brokerage revenue generated transactionally on commercial real estate, (vii) fees generated from title services revenue and insurance
and (viii) fees from our events and forums. 

27

The majority of our revenue is derived from fees
and dues based on the number of agents working under the La Rosa Realty brand. Due to the low fixed cost structure of both our Company
and franchise models, the addition of new sales agents generally requires little incremental investment in capital or infrastructure.
Accordingly, the number of commission producing sales agents in our Company and our franchisees is the most important factor affecting
our results of operations and the addition of new agents can favorably impact our revenue and our earnings before interest, taxes, depreciation
and amortization (“EBITDA”). Historically, the number of agents in the residential real estate industry has been highly correlated
with overall home sale transaction activity. We believe that the number of agents and those that produce commissions in our network is
the primary statistic that drives our revenue. Another major factor is the cyclicality of the real estate industry that has peaks and
valleys depending on macroeconomic conditions that we cannot control. And finally, our revenues fluctuate based on the changes in the
aggregate fee revenue per sales agent as a significant portion of our revenue is tied to various fees that are ultimately tied to the
number of agents, including annual dues, continuing franchise fees, and certain transaction or service-based fees. Our revenue per agent
also increases in other ways including when transaction sides and transaction sizes increase since a portion of our revenue comes from
fees tied to the number and size of real estate transactions closed by our agents. While the Company was not named as a defendant in any
of the recent class action lawsuits alleging antitrust violations, it is