Besides franchise agreements, what other performance obligations does Remax have associated with contracts with customers?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
ow. The Company has other performance obligations associated with contracts with customers in other revenue for education, marketing and events, subscription revenue, loan processing revenue, and data services revenue. The method used to measure progress is over the passage of time for most streams of revenue. The following is a description of principal activities from which the Company generates its revenue.
Continuing Franchise Fees
Continuing franchise fees are fixed contractual fees paid monthly (a) by regional franchise owners in Independent Regions or franchisees in Company-Owned Regions based on the number of RE/MAX agents in the respective franchised region or office or (b) by Motto franchisees based on the number of open offices. Motto offices reach the full monthly billing once the Motto office has been open for 12 months.
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, in addition to the performance obligations associated with franchise agreements, Remax has other performance obligations associated with contracts with customers. These obligations fall into the categories of education, marketing and events, subscription revenue, loan processing revenue, and data services revenue. For most of these revenue streams, Remax measures progress over the passage of time.
Specifically, Remax collects fees for marketing funds, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents in their region or office, or the number of Motto offices. These marketing funds are designated for marketing campaigns aimed at building brand awareness and supporting agent marketing technology. Remax recognizes this revenue in the month the fee is billed. These fees are considered usage-based royalties because they depend on the number of RE/MAX agents or Motto offices.
For a prospective franchisee, this means that Remax's revenue streams are not solely dependent on the initial franchise sale but also on ongoing services and support provided to franchisees and their agents. The marketing fund fees, in particular, highlight a continuous obligation to provide marketing support and technology to the network. This also means that Remax's financial performance is closely tied to the success and growth of its franchisees, as the number of agents and offices directly impacts the revenue generated from these fees.