What expenses is a Remax borrower required to reimburse the Holder for in the event of default?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
The Borrower agrees to reimburse the Holder on demand for all the Holder's expenses, damages and losses of any kind or nature, including without limitation costs of collection and actual attorneys' fees and disbursements in attempting to collect the obligations under this Note upon an Event of Default (collectively, "Expenses").
Expenses will accrue interest at the interest rate, including the Default Interest Rate, if applicable.
The Borrower agrees to indemnify the Holder, and its members, managers, directors, officers, employees and agents (each such person being called an "Indemnitee") against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of in any way connected with, or as a result of (i) any breach by the Borrower of its representations, warranties, covenants or other obligations under this Note, (ii) the use of the proceeds of the Note or (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, if a borrower defaults on their promissory note, they must reimburse the Holder (RE/MAX Integrated Regions, LLC) for all expenses, damages, and losses incurred while attempting to collect the obligations under the note. These expenses include, but are not limited to, the costs of collection and actual attorneys' fees and disbursements. These expenses will also accrue interest at the applicable rate, including the Default Interest Rate.
In addition to reimbursing expenses, the Remax borrower also agrees to indemnify the Holder, its members, managers, directors, officers, employees, and agents against any losses, claims, damages, liabilities, and related expenses. This includes reasonable counsel fees, charges, and disbursements, if these losses arise from (i) any breach by the Borrower of its representations, warranties, covenants or other obligations under this Note, (ii) the use of the proceeds of the Note or (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto.
This means that a Remax franchisee who takes out a loan from RE/MAX Integrated Regions, LLC, and then defaults, could face significant additional costs beyond the principal and interest owed. These costs could include legal fees, collection agency fees, and any other expenses the Holder incurs in trying to recover the debt. The franchisee is also responsible for covering losses, claims, damages, and liabilities incurred by the Holder or related parties due to the franchisee's breach of the loan agreement or the use of the loan proceeds. This is a standard clause in loan agreements, but it's important for franchisees to understand the potential financial burden they could face in the event of default.