If a Remax franchise is owned by a business entity, what representation does the business entity make regarding its business activities during the term of the Franchise Agreement?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a Business Entity, you represent and warrant to us that you are duly organized and validly existing in good standing under the laws of the state of your incorporation, organization, or registration, that you have the
authority to execute, deliver and carry out all of the terms of this Agreement, and that during the Term of this Agreement the only business you (i.e., the Business Entity) will conduct will be the development, ownership and operation of the Office. You and each Owner represent, warrant and agree that all "interests" (defined in Subsection 12.B. below) in Franchise Owner are owned in the amount and manner described in the Ownership and Management Information form (attached hereto as Exhibit A), that all information set forth in the Ownership and Management Information form is true and accurate and that the sole proprietor, shareholders, partners, members, officers, managers, directors, and other individuals who have legal or equitable ownership in—or the legal right to control—the Business Entity are fully described therein. You and each Owner further represent, warrant and agree to amend the Ownership and Management Information form to keep it accurate and current at all times, and to promptly provide us with any and all updates thereto. At our request, you shall provide us with copies of your certificate of incorporation, registration or articles of organization, as the case may be, as well as copies of your by-laws, partnership or operating agreements, buy-sell agreements, and any other relevant documents we may request. The articles of incorporation, by-laws, articles of organization, partnership agreement and other organizational documents of such Business Entity shall recite that the issuance and transfer of any interest therein is restricted by the terms of Section 12 of this Agreement and all issued and outstanding stock certificates or certificate of membership interest or other evidence of ownership of any such Business Entity shall bear the following clause restricting transfer:
"The transfer of this stock (or other interest) is subject to the terms and conditions of the franchise agreement between this corporation (or other entity) and RE/MAX Integrated Regions, LLC. These restrictions prohibit transfer without the prior written approval of RE/MAX Integrated Regions, LLC."
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, if a franchisee is a business entity, it must represent and warrant to Remax that it is properly organized and in good standing under the laws of its state. The business entity must also have the authority to execute, deliver, and carry out all the terms of the Franchise Agreement.
During the term of the Franchise Agreement, the business entity's sole business activity will be the development, ownership, and operation of the Remax office. This means the business entity cannot engage in other ventures outside of the Remax franchise without prior written consent from Remax. This ensures that the franchisee's primary focus remains on the Remax business.
Furthermore, the franchisee and each owner must represent, warrant, and agree that all interests in the Franchise Owner are owned in the amount and manner described in the Ownership and Management Information form. They must also ensure that all information on this form is accurate and kept current, providing updates to Remax as needed. Remax may request copies of the business entity's organizational documents, such as the certificate of incorporation or operating agreements, to verify this information.
Finally, the organizational documents of the business entity must state that the issuance and transfer of any interest therein is restricted by the terms of Section 12 of the Franchise Agreement. All stock certificates or membership interest certificates must include a clause restricting transfer, indicating that any transfer is subject to the terms and conditions of the franchise agreement and requires prior written approval from Remax Integrated Regions, LLC.