In a lawsuit regarding the Franchise Agreement, is the prevailing party entitled to recover attorney's fees from Remax?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Enforcement; Injunctive Relief; Attorneys' Fees. Contractor hereby acknowledges and agrees that it would be difficult to measure the economic loss that would occur as a result of the breach of any of the provisions of this Paragraph 12, and that such a breach would cause immediate and irreparable harm for which there would be no adequate remedy at law. Contractor further acknowledges and agrees that any of the foregoing provisions may be enforced by injunction and/or restraining order. Further, Contractor acknowledges and agrees that REMAX, LLC, as the owner of federal and state registrations for and common law rights in the RE/MAX Marks, shall have a direct right to enforce any of the provisions contained in this Paragraph 12 through appropriate legal proceedings. Contractor agrees that Broker may transfer to Franchisor/Regional the right to pursue, in Broker's or Franchisor/Regionals' name, any claim (including without limitation a breach of contract claim) against Contractor for breach of any term or condition contained in this Paragraph 12 and Contractor further agrees not to contest any such transfer in any legal proceeding. If Broker and/or Franchisor/Regional is required to retain an attorney to enforce any of the provisions of this Paragraph 12 or to institute legal proceedings incident to such enforcement, Contractor shall pay, in addition to all other sums for which Contractor may be found liable, reasonable attorneys' fees, court costs and litigation expenses incurred by Broker and/or Franchisor/Regional.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to the 2025 Remax Franchise Disclosure Document, the Contractor (franchisee) may be responsible for covering Remax's legal costs under specific circumstances. Paragraph 12 of the Franchise Agreement outlines provisions related to de-identification after termination or expiration of the agreement, protection of the RE/MAX System, and the RE/MAX Marks. If Remax (referred to as Franchisor/Regional or Broker in this section) has to hire an attorney to enforce these specific provisions due to a breach by the Contractor, the Contractor is obligated to pay reasonable attorneys' fees, court costs, and litigation expenses incurred by Remax.
This obligation extends to legal proceedings initiated to enforce Paragraph 12, meaning that if Remax prevails in a lawsuit against the franchisee for violating these specific terms, the franchisee will have to cover Remax's legal expenses. This creates a financial risk for franchisees who may breach these provisions, as they could be responsible for not only damages but also Remax's legal fees. The FDD also states that Remax, LLC, as the owner of the RE/MAX Marks, has a direct right to enforce the provisions in Paragraph 12 through legal proceedings.
However, it is important to note that this clause specifically applies to the enforcement of Paragraph 12, which deals with de-identification and protection of Remax's intellectual property after the franchise agreement ends. The FDD does not explicitly state whether the prevailing party is entitled to recover attorney's fees in lawsuits arising from other sections of the Franchise Agreement. Therefore, the franchisee's responsibility to pay legal fees is limited to breaches of the provisions outlined in Paragraph 12.