What is the definition of 'broker-manager' in the context of a Remax franchise?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
If you or a principal owner does not have a valid real estate broker license, you will be required to secure the services of an individual with a valid real estate broker license under whose license the Office will be conducted and who will be responsible for the management of the Office ("broker-manager"). If you are a corporation, partnership, limited liability company or other business entity, this broker-manager need not have an equity interest in you but will be required to agree in writing to preserve the confidentiality of any confidential information to which he or she has access. You or your principal owner or, if applicable, your brokermanager, will be required to devote his or her full time and best efforts to managing and supervising the Office's operations and, during the term of the Franchise Agreement, will not be permitted to operate, manage, own or have an interest in or become affiliated with in any other way (1) any non-RE/MAX real estate service business; or (2) any other business or enterprise offering products or services that directly or indirectly compete with the products and services offered by RE/MAX offices, RE/MAX Regional, REMAX, LLC, or any of REMAX, LLC's affiliates. Although you or your principal owner will be required to attend Initial Education and Recruiting 101 in their entirety, no similar obligation will be imposed upon the broker-manager and your broker/manager is not required to successfully complete either program.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 80–81)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, a 'broker-manager' is defined as an individual with a valid real estate broker license who manages the Remax office when neither the franchisee nor a principal owner of the franchisee (if the franchisee is a business entity) holds such a license. The broker-manager operates under their real estate broker license, making them responsible for the office's management.
This arrangement is necessary if the franchisee or its principal owners do not possess the required real estate broker license. While Remax recommends that the franchisee or a principal owner personally operate the office with the appropriate license, the broker-manager serves as an alternative to ensure compliance with state regulations. The broker-manager's role is to oversee the office's operations, devoting their full time and best efforts to managing and supervising these operations.
Notably, if the franchisee is a business entity, the broker-manager is not required to have an equity interest in the company. However, they must agree in writing to maintain the confidentiality of any confidential information they access during their management of the Remax office. Unlike the franchisee or principal owner, the broker-manager is not required to attend Initial Education or Recruiting 101 programs.
This distinction is important for prospective Remax franchisees who may not have the necessary real estate broker license themselves. By hiring a broker-manager, they can still operate a Remax franchise while complying with licensing requirements, although they will need to find a suitable individual and ensure they agree to the confidentiality terms.