What happens to the unpaid principal and interest balance if a Remax franchisee transfers any interest in the Franchise Agreement?

According to Remax's 2025 Franchise Disclosure Document, if a franchisee transfers any interest in their Franchise Agreement and has an outstanding balance on any promissory notes, the unpaid principal and interest will become immediately due and payable. This is detailed in Section 10 of Promissory Notes 1, 2, and 3, as well as Section 6(b) of Promissory Note 4.

This provision means that a Remax franchisee cannot transfer their franchise to another party without first settling any outstanding debt owed to Remax. This could significantly impact the franchisee's ability to sell or transfer the franchise, as potential buyers may be unwilling to take on the responsibility of immediately paying off the existing debt.

It is important for prospective Remax franchisees to carefully consider the financial implications of financing the franchise fee or other expenses through promissory notes. Understanding the terms of these notes, including the conditions that trigger immediate repayment, is crucial for making informed decisions about the franchise investment and future transferability.