ENVALITH
株式会社センチュリー21・ジャパン logo

CENTURY 21 REAL ESTATE OF JAPAN LTD.

8898・Standard Market・Real Estate

Official website
株式会社センチュリー21・ジャパン logo
CENTURY 21 REAL ESTATE OF JAPAN LTD.8898

Business

CENTURY 21 Japan Co., Ltd. is the franchisor operating the sole real estate brokerage franchise under the "CENTURY 21" brand in Japan, based on a perpetual sub-franchise agreement with Century 21 Real Estate LLC of the United States. Since commencing operations in 1983, the company has built a network of 934 stores across five regions nationwide (Greater Tokyo, Kansai, Chubu, Kyushu, and Hokkaido) as of the end of FY2026 (ending March 2026). The company provides multifaceted support to franchisees, including licensing of brand usage rights, education and training, provision of IT systems, joint advertising, and referrals for financial and insurance services, thereby helping to strengthen the management foundations of real estate brokerage businesses. Its main customers are independent real estate brokers and businesses entering the industry from other sectors, with total transaction volume among franchisees reaching ¥906,967 million (in original thousand-yen figures).

Business Model

The core of revenue is Service Fee income (¥3,583 million in FY2026 (ending March 2026), 83% of the total), which collects 6% of real estate brokerage commissions, etc. received by franchisees via automatic monthly withdrawal. Franchise Fees paid upon joining (¥3 million in the Greater Tokyo area, etc.) and Renewal Fees paid every 5 years also serve as revenue sources. From FY2026 (ending March 2026), system usage fees (¥516 million) associated with the transfer of IT system assets have become established as a new revenue pillar. Payments to the international headquarters amount to 10% of total revenue (for franchisee counts between 201 and 1,000 stores), with the margin accruing as the company's revenue.

Company Strengths

In 1988, the company extended the contract term with its international headquarters to "perpetual," granting it an exclusive position as the sole operator able to roll out the CENTURY 21 brand within Japan. It is contractually impossible for competitors to enter the market under the same brand, and its 40-plus years of operating track record combined with its network of 934 stores form an entry barrier that is difficult to replicate in a short period.

In FY2026 (ending March 2026), despite a net decrease of 26 franchise stores from the previous period (to 934 stores), Service Fee revenue still grew 2.0% year on year to ¥3,583 million. An increase in transaction value per existing franchise store has supported revenue, and total transaction value across all franchise stores expanded to ¥906,967 million (raw figures in thousands of yen). This demonstrates the resilience of a revenue structure that does not depend on store count.

Following the transfer of IT system assets from the CENTURY 21 Franchise Advertising Fund Association, IT Services (21Cloud, etc.) revenue expanded substantially in FY2026 (ending March 2026) to ¥516 million (up 59.2% year on year). Revenue diversification away from reliance on Service Fee income is progressing, and system usage fees are increasingly establishing themselves as a stable revenue source less susceptible to fluctuations in franchise store count.

ENVALITH's Perspective

In FY2026 (ending March 2026), the number of franchised stores continued to decline to 934 (versus 960 in the previous period, 97.3% year-on-year), while total transaction value across all franchised stores expanded to ¥906,967 million (raw figures in thousands of yen), and Service Fee income secured a 2.0% year-on-year increase. The divergence between the decline in store count and revenue growth can be evaluated as a structural change indicating improved productivity per store. As an external factor, it should be noted that expanding demand and rising prices in the existing home market are boosting the transaction value of franchised stores.

In FY2026 (ending March 2026), operating profit turned to a slight decline, coming in at ¥1,064 million (down 0.7% year-on-year). This was primarily due to a substantial increase in operating costs to ¥1,124 million (up 17.4% year-on-year), with IT Services costs in particular expanding sharply to ¥365 million (up 86.5% year-on-year). On the other hand, recurring profit of ¥1,214 million (up 3.1% year-on-year) and net income attributable to owners of parent of ¥852 million (up 6.3% year-on-year) were supported by one-time non-operating income items—¥36 million in compensation received related to a branch relocation and ¥37 million in settlement money from a withdrawn franchisee—as well as the tax reduction effect from the wage increase promotion tax system. These results should be evaluated separately from the improvement in core business profitability.

The earnings forecast for FY2027 (ending March 2027) projects both revenue and profit growth, with operating revenue of ¥4,426 million (up 2.9% year-on-year) and operating profit of ¥1,136 million (up 6.8% year-on-year), while net income attributable to owners of parent is forecast to decline to ¥830 million (down 2.7% year-on-year). This is due to the fact that the tax credit effect from the wage increase promotion tax system applied in FY2026 (ending March 2026) is not expected to continue into the next period, along with the newly imposed defense special corporate tax starting April 2026. In addition, against a new franchise acquisition target of 55 stores for the next period, the FY2026 (ending March 2026) result stood at only 33 stores, leaving the transition to a recovery trajectory in franchise store count as a remaining challenge.

Growth Strategy

Qualitative and quantitative expansion of the franchise network through enhanced franchise benefits, deeper IT capabilities, and utilization of international transactions

In December 2025, the company completely renewed its new franchise recruitment website for the first time in four years. Targeted messaging by industry/business type, cross-industry entrants, and independent startups generated responses exceeding expectations from the first month. The next fiscal period targets 55 new franchise acquisitions, but the FY2026 (ending March 2026) result was only 33 stores, requiring acceleration to achieve the target.

The company is expanding franchise benefits on multiple fronts, including enhanced AI-based automatic contract document generation, strengthened SNS-based recruitment support through increased advertising spend on the recruitment support system, and the launch of business succession and M&A support (with the first case established in July 2025). These efforts aim to curb franchisee withdrawals and improve productivity, thereby achieving stable growth in Service Fee revenue.

In July 2025, the company established a new International Business Office and began preparing and providing real estate transaction manuals for foreign customers, along with English- and Chinese-language versions of important matters explanation documents. The company held seminars to promote international transaction activity and is also advancing support for the voluntary franchisee group International Transaction Support (GREATS21). Amid growing real estate investment in Japan by wealthy overseas investors, the company is building a framework to support franchisees in realizing international transactions.

Starting from the transfer of IT system assets from the CENTURY 21 Franchise Advertising Fund Association, system usage fee revenue has become established and is expanding. In the next fiscal period, the company plans to focus on Service Fee revenue of ¥3,730 million (up 4.1% year on year), while factoring in a reduction in costs due to the end of initial depreciation of the franchisee management system, aiming to contain selling, general and administrative expenses at ¥2,114 million (up 0.2% year on year).

Last updated: July 19, 2026