How does the initial franchise fee for a Remax franchise (Item 5) relate to the potential for long-term profitability and return on investment, considering the ongoing fees and expenses outlined in Item 7 and implied by Item 9?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FEES]
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Initial Education | $0 | Not Applicable. | Initial Education is required. You will be required to pay for all related travel, meal, lodging and entertainment expenses. (See Item 11 for more detail.) |
| Recruiting 101 | $599 | Not Applicable. | Recruiting 101 is required. You will be required to pay for all related travel, meal, lodging and entertainment expenses. (See Item 11 for more detail.) |
| Broker/Owner Meetings and Retreats | $0 - $550 registration fee | Upon receipt of invoice. | Attendance is highly recommended; you must pay for all related travel, meal, lodging and entertainment expenses (if any). |
| Educational Courses | $50 - $2,000 Extra fees may be charged for educational and certification classes for professional credit, if offered. | 10 days after billing or at registration. | You may be required to complete, at your expense, certain educational courses as a condition of renewal. (See Item 11 for more detail.) |
| Conventions and Seminars | $195 - $1,000 registration fee per person. Extra fees may be charged for educational and certification classes for professional credit, if offered. Nominal fees or charges may also be assessed for a variety of social functions. | Prior to attending. | Attendance is highly recommended; you also must pay for all related travel, meal, lodging, and entertainment expenses. |
| Type of Fee1 | Amount | Due Date | Remarks |
| Multiple Listing Service Fees | $0 to $100 per month per Office | Some Multiple Listing Services may charge this on a quarterly or annual basis. | Payable to your local Multiple Listing Service or Services |
| Holdover Fee | $2,500 per month per Office | Upon receipt of invoice. | Payable to RE/MAX Regional. |
| De-identification Fee | $500 per day | As incurred. Payable if you fail to de-identify within 10 days of termination or expiration of the Franchise Agreement. | Payable to RE/MAX Regional. |
| Lost Future Revenue15 | Will vary under circumstances | Upon early termination or abandonment. | Payable if the Franchise Agreement or Team Office Amendment is terminated early for any other reason than pursuant to mutual consent. |
| Unreported Agent Payments16 | Will vary under circumstances | As incurred. | Payable if you fail to report Sales Associates affiliated with your Office. |
| State | Component One Continuing Franchisee Fee (per Sales Associate in your Office) | ||
| Connecticut, Maine, Massachusetts, New Hampshire, | $165 | ||
| Rhode Island, or Vermont | |||
| Indiana | $149 | ||
| Minnesota/Wisconsin | $138 | ||
| State | Marketing Fund fee (per Sales Associate in your Office) | ||
| Connecticut, Maine, Massachusetts, New Hampshire, | $127 | ||
| Rhode Island, or Vermont | |||
| Indiana | $140 | ||
| Minnesota/Wisconsin | $131 | ||
| Type of Fee1 | Amount | Due Date | Remarks |
| Audit | Cost of inspection or audit. | As incurred. | Payable if you fail to furnish reports, supporting records or other required information or you understate the amounts owed to RE/MAX Regional for any 3-month period by more than 5%, or if an inspection reveals other conduct that is unlawful or a breach of the Franchise Agreement. |
| Interest and Late Charges | As liquidated damages and not as a penalty: 20% of amount owed for the late payment of Annual Dues; 10% of amount owed for all other fees (or maximum amount allowed by law); $100 per day for the failure to timely submit reports; plus interest of 1% per month compounded (or highest rate allowed by law) of amount owed for all fees except Annual Dues. | Due with payment of outstanding amounts or submission of reports. | Payable on all overdue amounts or for the failure to timely submit reports. |
| Costs and Attorneys' Fees | Will vary under circumstances. | As incurred. | Payable if we engage legal counsel in connection with your failure to comply with the Franchise Agreement. |
| Indemnification | Will vary under circumstances. | As incurred. | You have to reimburse RE/MAX Regional if it is held liable for claims, or otherwise incurs legal or other costs, arising from the operation of your Office. |
The Component One Continuing Franchise Fee will be due and will be considered late if not received by RE/MAX Regional by the 10th day of the month after the month the Office opens and by the 10th day of each month throughout the remainder of the term of the Franchise Agreement. RE/MAX Regional will have the right to increase the amount of the Component One Continuing Franchise Fee once in any calendar year following at least 60 days' prior written notice to you, provided such increase will not exceed 10% of the Component One Continuing Franchise Fee amount in effect at the time of any such increase. It is currently anticipated that this fee may increase by at least $2.50 on July 1, 2026, and by at least $2.50 on the 1st day of July in each subsequent year of the Franchise Agreement.
You will be required to pay RE/MAX Regional as a Component Two Continuing Franchise Fee, an amount equal to 1% of gross commissions (including referral fees) and other revenue earned, derived or otherwise generated from permitted real estate service activities handled by each one of your Sales Associates during the previous calendar month whether or not you actually collect a "broker service fee", as recommended below. "Permitted Real Estate Service Activities," means activities directly related to the business of listing, offering, selling, purchasing, exchanging and managing real property and the providing of marketing or consulting services or other activities with respect to auctioning, leasing or renting of real property or representing sellers, purchasers, lessors or renters of real property. This Component Two Continuing Franchise Fee will be due and will be considered late if not received by RE/MAX Regional by the 10th day of the month after the month the Office opens and by the 10th day of each month throughout the remainder of the term of the Franchise Agreement.
For instance, if your Office is larger than 1,000 square feet, your initial outlay may be considerably higher than the upper range listed in the table, depending upon how much additional space you lease.
Initial investment costs for particular categories may also vary significantly depending on a number of factors including such things as the geographic location of the Office and whether or not it is a conversion of an existing real estate office.
14 If you are in Indiana, you will be required to pay RE/MAX Regional or its designee a Regional Development fee of $200 per month if your Office is in a high-density area (an area with a general population of more than 30,00 people) or $150 per month if your Office is a low-density area (an area with a general population of less than 30,000 people, that is substantially distant from a major urban area). The Regional Development fee will be due and will be considered late if not received by RE/MAX Regional by the 10th day of the month after the month the Office opens and by the 10th day of each month throughout the remainder of the Term of the Franchise Agreement. RE/MAX Regional may increase the Regional Development fee once in any calendar year, but not by more than 20% of the amount of the Regional Development fee a
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the initial fees outlined in Item 5, while seemingly modest, are only one component of the overall investment required to start and maintain a Remax franchise. The initial fees themselves, such as the $599 for Recruiting 101, $0-$550 for Broker/Owner Meetings and Retreats registration, $50-$2,000 for Educational Courses, and $195-$1,000 for Conventions and Seminars registration, do not directly impact long-term profitability. However, the mandatory nature of some fees, like Recruiting 101, and the highly recommended attendance of events, coupled with the franchisee's responsibility for travel, meal, lodging, and entertainment expenses, contribute to the initial financial burden. These upfront costs, combined with ongoing fees, must be carefully considered in the context of potential revenue.
The FDD also outlines ongoing fees that can significantly impact profitability. These include the Component One Continuing Franchise Fee, which varies by state (e.g., $165 in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, or Vermont; $149 in Indiana; $138 in Minnesota/Wisconsin) per sales associate, and the Marketing Fund fee, which also varies by state (e.g., $127 in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, or Vermont; $140 in Indiana; $131 in Minnesota/Wisconsin) per sales associate. Additionally, there's a Component Two Continuing Franchise Fee equal to 1% of gross commissions earned by each sales associate. These ongoing fees, especially the Component Two fee, are directly tied to revenue, meaning higher sales volume leads to higher fee payments. The franchisee must balance these fees against their revenue projections to ensure profitability.
Furthermore, the FDD mentions other potential fees that could affect the franchisee's financial outlook. These include Multiple Listing Service fees ranging from $0 to $100 per month, a Holdover Fee of $2,500 per month, and a De-identification Fee of $500 per day. There are also potential costs related to audits, interest on late payments, and legal fees. The potential for increases in the Component One Continuing Franchise Fee and Regional Development fee (if applicable) adds another layer of complexity to financial planning. The franchisee needs to carefully analyze all these potential costs and revenue streams to determine the long-term profitability and return on investment of a Remax franchise. The initial investment costs can vary significantly based on location and whether it is a conversion of an existing real estate office. Therefore, it is crucial to review these figures with a business advisor before making any decision to purchase the franchise.