What constitutes a default of financial obligations under Section 6 of the Remax Franchise Agreement, as it relates to the Promissory Note?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
uch failures to comply happen at the same time or at different times within the 12 consecutive month period, and regardless of whether such failures to comply are corrected after notice is given to you; or
- (16) you or any of your Owners fail to comply with any requirement, obligation (including, if an agreement has expired or terminated, a surviving obligation), term or condition of any other franchise or other agreement between you or your Owners and us or any of our Related Parties, and do not cure such default in accordance with the terms of such other agreement.
C. 10 DAYS NOTICE.
We have the right to terminate this Agreement effective 10 days after providing written notice to you if:
(1) you or your Owners do not pay when due any monies owed to us or REMAX, LLC;
- (2) you or your Owners default under the terms of any promissory note executed in favor of us or REMAX, LLC;
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, a default under the terms of a promissory note executed in favor of Remax or REMAX, LLC, constitutes grounds for termination of the Franchise Agreement. Specifically, if a franchisee or their Owners fail to pay monies owed to Remax or REMAX, LLC when due, or default under the terms of any promissory note, Remax has the right to terminate the agreement.
Remax can terminate the Franchise Agreement with only 10 days' notice if the franchisee defaults on the terms of a promissory note. This short cure period highlights the importance of franchisees meeting their financial obligations to Remax. The termination is effective automatically at the end of the 10-day period if the default is not cured, without any further notice required from Remax.
Furthermore, the promissory note becomes immediately due and payable if the Franchise Agreement is terminated pursuant to Section 13, along with reasonable attorney's fees if collection is placed in the hands of an attorney. This clause underscores the financial risk associated with failing to meet the obligations outlined in the promissory note and the Franchise Agreement, potentially leading to accelerated debt and legal expenses.