How does Remax account for the assets of the Marketing Funds on its balance sheet?

According to the 2025 Remax Franchise Disclosure Document, all assets within the Marketing Funds are contractually restricted for the benefit of Remax franchisees. To reflect this restriction, Remax recognizes an equal and offsetting liability on its balance sheet for all amounts received into the Marketing Funds. This accounting practice ensures that the funds are designated solely for marketing purposes that benefit the franchisees.

This approach also results in recording an equal and offsetting amount of expenses against all revenues, which means that the Marketing Funds' activities do not impact the overall profitability of Remax. Additionally, Remax expenses advertising costs as they are incurred. This accounting treatment provides transparency regarding the use of marketing funds and assures franchisees that their contributions are being used as intended, without directly impacting Remax's bottom line.

For a prospective Remax franchisee, this accounting practice offers assurance that the marketing fees they pay are specifically earmarked for marketing campaigns and agent support. The offsetting liability on Remax's balance sheet and the recognition of expenses against revenues related to the Marketing Funds ensure that these funds are not used for other purposes within the company. This arrangement can be a significant benefit, as it aligns the franchisor's financial reporting with the franchisees' interests in promoting the Remax brand and supporting their businesses.