Is demonstrating diligence in developing the Remax office during the term, in a manner acceptable to the franchisor, a requirement for renewal?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| The agreement you would sign if you are an existing franchisee and are renewing the Team Office Amendment is attached as Exhibit A-4. | |||
| c. | Requirements for franchisee to renew or extend | Subsection 2.E. of Franchise Agreement and Renewal Addenda Sections 2 and 11 of Team Office Amendment | You can renew the franchise relationship if: • you have complied with the terms of the Franchise Agreement; • you have exercised diligence in developing your Office during the term in a manner acceptable to us; • you sign a form authorizing RE/MAX Regional to obtain a consumer report and conduct a credit and background check; • you provide us with a copy of your current financial statement; • you meet our then current subjective and objective standards for new franchisees; • you provide written notice of election to renew at least 6 months prior to the expiration of the Franchise Agreement; • you complete required educational courses; • you sign the then current form of Franchise Agreement, including the then current form of renewal addendum (both of which may have materially different and less favorable terms and conditions from your original contract) at least 90 days prior to the expiration of the Franchise Agreement; and • you pay the renewal fee (or if you are paying the renewal fee in 12 equal payments, then the first monthly payment) at least 90 days prior to the expiration of the Franchise Agreement. If you renew the Team Office Amendment, you will be required to pay the Team Office renewal fee and execute the form of amendment that RE/MAX Regional is then using for the grant of rights to a Team Office. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 81–88)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, demonstrating diligence in developing the office during the franchise term is indeed a requirement for renewal. Specifically, the franchisee must have "exercised diligence in developing your Office during the term in a manner acceptable to us." This means Remax evaluates whether the franchisee has actively worked to grow and improve their office in a way that meets Remax's standards.
In addition to demonstrating diligence, there are several other conditions a Remax franchisee must meet to renew their franchise agreement. These include compliance with the existing Franchise Agreement, signing a form authorizing a credit and background check, providing a current financial statement, meeting Remax's standards for new franchisees, providing timely written notice of intent to renew, completing required educational courses, signing the then-current Franchise Agreement (which may have less favorable terms), and paying the renewal fee. Meeting all these requirements is crucial for a Remax franchisee seeking to continue their business operation under the Remax brand.
The renewal Franchise Agreement may contain materially different and less favorable terms and conditions from the original contract. This is a common practice in franchising, as franchisors update their agreements to reflect changes in the market, legal requirements, and their own business strategies. Franchisees should carefully review the new agreement with legal counsel to understand any changes and their potential impact. The renewal process also involves paying a renewal fee, further emphasizing the financial commitment required to continue operating a Remax franchise.
Overall, the renewal process for a Remax franchise involves a comprehensive evaluation of the franchisee's performance, financial standing, and willingness to adhere to the updated terms and conditions. While demonstrating diligence in developing the office is a key factor, franchisees must also meet all other requirements to secure their renewal and continue benefiting from the Remax brand and system.