Does the Remax arbitration agreement permit class arbitration, or claims brought as a plaintiff or class member in any class or representative arbitration proceeding?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
strued in accordance with the internal laws of the State of Colorado, excluding any principles or rules of law that may direct the application of the law of another state.
Arbitration and Waiver of Class Arbitration
Any dispute, controversy or claim arising out of, relating to or in connection with these Terms of Use, including the breach, termination, or validity thereof, shall be finally resolved by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The number of arbitrators shall be one (1), and the place of arbitration shall be Denver, Colorado, United States. The arbitration shall be held, and the award shall be rendered, in English. The tribunal shall have the power to rule on any challenge to its own jurisdiction or to the validity or enforceability of any portion of the agreement to arbitrate. The parties agree to arbitrate solely on an individual basis, and that this agreement does not permit class arbitration, or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding. The arbitral tribunal may not consolidate more than one person's claims and may not otherwise preside over any form of a representative or class proceeding. Notwithstanding the tribunal's power to rule on its own jurisdiction and the validity or enforceability of the agreement to arbitrate, the tribunal has no power to rule on the validity or enforceability of the agreement to arbitrate solely on an individual basis. In the event the prohibition on class arbitration is deemed invalid or unenforceable, then the remaining portions of the arbitration agreement will remain in force.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the franchise agreement specifies that disputes will be resolved through individual arbitration, not class actions. The agreement explicitly states that it does not permit class arbitration or claims brought as a plaintiff or class member in any class or representative arbitration proceeding. The arbitral tribunal is prohibited from consolidating claims from multiple individuals or presiding over any form of representative or class proceeding. This means a franchisee cannot participate in a class action lawsuit against Remax.
This clause ensures that each franchisee's dispute is handled separately, based on its own specific circumstances. While this prevents franchisees from joining forces in a single legal action, it also means that Remax will address each complaint individually. The agreement also states that if the prohibition on class arbitration is deemed invalid or unenforceable, the remaining portions of the arbitration agreement will still be in effect.
Additionally, the FDD states that the parties recognize that their relationship is unique and that each franchisee is situated differently from all other franchisees, and that no one franchisee can adequately represent the interest of others. Therefore, any legal proceeding shall be conducted and resolved on an individual basis only and not on a class-wide, multiple plaintiff, consolidated or similar basis. To the extent permitted by law, franchisees agree that any judicial proceeding will be considered as to its facts and will not be commenced or proceeded with as a class action.
This waiver of class action rights is a significant legal point for prospective franchisees to consider. It means that any legal recourse must be pursued individually, which can be more costly and time-consuming than participating in a class action. However, it also ensures that each franchisee's case is considered on its own merits. Franchisees should consult with an attorney to fully understand the implications of this clause.