What clause restricting transfer must be included on all issued and outstanding stock certificates or certificates of membership interest for a Remax franchise owned by a business entity?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Remax's 2025 Franchise Disclosure Document, if a Remax franchise is owned by a business entity, all issued and outstanding stock certificates or certificates of membership interest must include a specific clause restricting transfer. This clause explicitly states that the transfer of the stock or other interest is subject to the terms and conditions outlined in the franchise agreement between the corporation or entity and RE/MAX Integrated Regions, LLC. Furthermore, it emphasizes that these restrictions prohibit any transfer without obtaining prior written approval from RE/MAX Integrated Regions, LLC.
This requirement ensures that Remax maintains control over who becomes a franchise owner, even when the franchise is held by a business entity. By mandating this clause on all ownership documents, Remax aims to prevent unauthorized transfers of ownership that could potentially compromise the brand's standards or introduce individuals or entities that do not meet their criteria for franchisees. This is a common practice in franchising to protect the brand and maintain consistency across all franchise locations.
For a prospective Remax franchisee, this means that if they choose to operate their franchise through a corporation, LLC, or other business entity, they must ensure that all stock certificates or membership interest certificates contain the specified transfer restriction clause. Failure to include this clause could be a breach of the franchise agreement and could have legal and financial repercussions. Franchisees should work closely with their legal counsel to ensure full compliance with this requirement when structuring their business ownership.