Besides Annual Dues, what interest rate does Remax charge on all other amounts owed but unpaid?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to make any payments to us or REMAX, LLC by their due date, you agree to pay us or REMAX, LLC as the case may be: (a) a late charge equal to 20% of the amount due in the case of delinquent Annual Dues and 10% of the amount due in the case of all other delinquent fees and charges, or if such rates exceed the highest rate permitted by applicable law, then at the highest rate permitted by applicable law; and (b) with the exception of Annual Dues, interest on all amounts owed but unpaid at the rate of 1% per month compounded, or if such rate exceeds the highest rate permitted under applicable law, then at the highest rate legally permitted. If we or REMAX, LLC are ever deemed to have contracted for, charged or received interest on any overdue sums in an amount that exceeds the amount permitted under applicable law, then such excess amount shall be deemed intended for, and will be applied as, payment of outstanding fees or other amounts due under this Agreement and, if no such amounts remain outstanding, such excess shall be returned to you.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, if a franchisee fails to make payments to Remax or REMAX, LLC by the due date, interest will be charged on all unpaid amounts, excluding Annual Dues. The interest rate is 1% per month compounded. However, if this rate exceeds the highest rate permitted by applicable law, the interest rate will be the highest rate legally permitted.
This means that a Remax franchisee could face a significant financial penalty for late payments beyond just a flat late fee. The 1% monthly interest, compounded, can add up quickly, increasing the total amount owed. It is important to note that the interest rate could be adjusted to comply with local laws, which may offer some protection to the franchisee depending on the location of the franchise.
Remax also specifies that if the interest charged is ever deemed to exceed the legally permitted amount, the excess will be applied towards any outstanding fees or other amounts due under the agreement. If no such amounts are outstanding, the excess will be returned to the franchisee. This clause aims to ensure compliance with applicable laws and provides a mechanism for correcting any overcharges of interest.