What are the consequences if a Remax franchisee or their Owners fail to appoint a manager or dispose of an ownership interest upon death, incompetency, or permanent disability, as outlined in Subsection 12.E?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the death, incompetency, or permanent disability (as defined below) of you or any Owner, the executor, administrator, conservator or other personal representative ("Personal Representative") of such person may sell or transfer his/her interest in this Agreement and the Franchise within a reasonable time, not to exceed 6 months from the date of death or determination of incompetency or permanent disability, to a person we have approved. Such sale or transfer, including, without limitation, transfers by a will or by inheritance, will be subject to all the terms and conditions for assignments and transfers contained in this Agreement. Alternatively, the Personal Representative may choose to close the Office and terminate the Agreement within that 6-month period provided all other Owners agree with that decision and provided the Personal Representative and all other Owners give REMAX Regional at least 60 days written notice of their election to terminate, any and all outstanding fees have been paid in full, and they sign a termination and mutual release agreement. During that 6-month period, the Office must be under the primary supervision of a manager who has a valid state real estate broker license and otherwise meets our management qualifications. Failure to appoint such a manager or to dispose of such interest within that 6-month period of time will constitute grounds for immediate termination of this Agreement.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, if a franchisee or owner experiences death, incompetency, or permanent disability, their personal representative has a limited time to manage the situation. Specifically, the personal representative has up to six months from the date of death or determination of incompetency or permanent disability to either sell or transfer the interest in the franchise to an approved person. Alternatively, the personal representative can choose to close the office and terminate the agreement, provided all other owners agree and give Remax Regional at least 60 days written notice. They must also ensure all outstanding fees are paid and sign a termination and mutual release agreement. During this six-month period, the office must be supervised by a qualified manager with a valid real estate broker license.
Failure to adhere to these requirements can lead to serious repercussions for the Remax franchisee. If the personal representative fails to appoint a qualified manager or dispose of the ownership interest within the specified six-month timeframe, Remax has grounds for immediate termination of the franchise agreement. This means the franchisee could lose the right to operate their Remax franchise, potentially resulting in significant financial losses.
This clause highlights the importance of succession planning for Remax franchisees. Franchisees should have plans in place to address potential issues arising from death, incompetency, or disability to ensure the continued operation of the franchise or a smooth transfer of ownership. The requirement for a qualified manager during the transition period also underscores Remax's commitment to maintaining standards and protecting the brand's reputation, even during unforeseen circumstances.