Are lease costs included in Remax's selling, operating, and administrative expenses?

According to Remax's 2025 Franchise Disclosure Document, lease costs are included in the company's selling, operating, and administrative expenses. Specifically, the FDD states that lease cost expense for lease payments related to operating leases is recorded to "Selling, operating and administrative expenses' in the Consolidated Statements of Income (Loss)." This indicates that the costs associated with leasing property are accounted for within this category of expenses.

For a prospective Remax franchisee, this means that when reviewing Remax's financial statements, they should expect to see lease costs reflected within the selling, operating, and administrative expenses. This is a standard accounting practice, as these expenses are directly related to the operations and administration of the business. Understanding how Remax categorizes its expenses can help franchisees better assess the financial health and operational efficiency of the company.

It's important to note that the FDD also mentions that the company's operating lease agreements are primarily for corporate office space. Additionally, the company recognizes right-of-use (ROU) assets and lease liabilities at the commencement date based on the present value of lease payments over the lease term. Variable lease payments, such as those for non-lease services related to the lease, are excluded from ROU assets and lease liabilities and are recognized in the period they are incurred. This level of detail provides further transparency into how Remax accounts for its lease obligations and related expenses.