What business activity is a Business Entity prohibited from conducting, other than the business of the Remax Office, if the Franchise Agreement is assigned or transferred to it?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a Business Entity, you represent and warrant to us that you are duly organized and validly existing in good standing under the laws of the state of your incorporation, organization, or registration, that you have the
authority to execute, deliver and carry out all of the terms of this Agreement, and that during the Term of this Agreement the only business you (i.e., the Business Entity) will conduct will be the development, ownership and operation of the Office. You and each Owner represent, warrant and agree that all "interests" (defined in Subsection 12.B. below) in Franchise Owner are owned in the amount and manner described in the Ownership and Management Information form (attached hereto as Exhibit A), that all information set forth in the Ownership and Management Information form is true and accurate and that the sole proprietor, shareholders, partners, members, officers, managers, directors, and other individuals who have legal or equitable ownership in—or the legal right to control—the Business Entity are fully described therein. You and each Owner further represent, warrant and agree to amend the Ownership and Management Information form to keep it accurate and current at all times, and to promptly provide us with any and all updates thereto. At our request, you shall provide us with copies of your certificate of incorporation, registration or articles of organization, as the case may be, as well as copies of your by-laws, partnership or operating agreements, buy-sell agreements, and any other relevant documents we may request. The articles of incorporation, by-laws, articles of organization, partnership agreement and other organizational documents of such Business Entity shall recite that the issuance and transfer of any interest therein is restricted by the terms of Section 12 of this Agreement and all issued and outstanding stock certificates or certificate of membership interest or other evidence of ownership of any such Business Entity shall bear the following clause restricting transfer:
"The transfer of this stock (or other interest) is subject to the terms and conditions of the franchise agreement between this corporation (or other entity) and RE/MAX Integrated Regions, LLC. These restrictions prohibit transfer without the prior written approval of RE/MAX Integrated Regions, LLC."
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to the 2025 Remax Franchise Disclosure Document, if a franchisee is a Business Entity, it is restricted to conducting only the business related to the development, ownership, and operation of the Remax Office during the term of the Franchise Agreement.
This restriction ensures that the Business Entity's sole focus remains on the Remax franchise. The franchisee must warrant that the only business it will conduct is the development, ownership, and operation of the Office. This requirement is further reinforced by the stipulation that the ownership and management information provided must be accurate and kept current, with any changes promptly reported to Remax.
To ensure compliance, Remax requires that the Business Entity's organizational documents, such as articles of incorporation or partnership agreements, include a clause restricting the issuance and transfer of any interest in the entity. Additionally, all stock certificates or membership interest certificates must bear a clause stating that the transfer of the stock or interest is subject to the terms and conditions of the franchise agreement and requires prior written approval from Remax Integrated Regions, LLC. This measure is in place to maintain control over who can become involved in the ownership of a Remax franchise and to prevent unauthorized transfers of ownership interests.