What documents related to non-competition may Remax require from the transferring franchisee and their Owners?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
- (11) you and your Owners must execute a transfer or assignment agreement or similar document which, as we may require, may include post-transfer non-competition restrictions for you and all or some of your Owners for what would have been, absent such transfer, the then-remaining term of this Agreement, and such other documents as we may require or deem important or desirable to the preservation and protection of our rights; and you and your Owners must provide us and/or our Related Parties and our and their respective officers, directors, employees and shareholders on the then current form we prescribe, a full general release and waiver in the form that we require; and
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, when a franchisee proposes to transfer their franchise, Remax may require both the franchisee and their Owners to execute a transfer or assignment agreement. This agreement may include post-transfer non-competition restrictions. These restrictions would apply to the franchisee and their Owners for the remaining term of the original franchise agreement, had the transfer not occurred.
In addition to the transfer or assignment agreement, Remax may also require the franchisee and their Owners to provide a full general release and waiver. This release and waiver must be in the form that Remax requires at the time of transfer. The purpose of these documents is to protect Remax's rights and interests during and after the transfer process.
This requirement ensures that transferring franchisees and their Owners do not immediately compete with the new franchisee or Remax itself within the same market, safeguarding the brand's goodwill and the investment of the incoming franchisee. Prospective franchisees should carefully review the specific terms of these non-competition agreements and releases with legal counsel to understand the scope and duration of these restrictions, as they can significantly impact future business opportunities.