Does the Remax Licensor have to obtain consent from the customer before settling a claim against the customer?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall be solely and exclusively responsible for any fines, taxes, costs, expenses, damages, loss or liability, of any kind or nature, arising out of any suits, actions, proceedings, claims or counterclaims, regardless of whether you were named or served in the matter relating to or arising out of your business or the operation of the Franchise (collectively "Claims"), including but not limited to, any acts or omissions of you, your Owners, employees or Sales Associates, or the operation of the Office, and including but not limited to (i) your alleged failure to comply with applicable laws and/or this Agreement, including but not limited to your de-identification obligations pursuant to Subsection 14.B; (ii) any Claim that REMAX Regional, REMAX, LLC or any of the Related Parties are a joint employer with you for any reason; and (iii) allegations that REMAX Regional, REMAX, LLC or its Related Parties were negligent or failed to train or supervise you, your Owners, or your Sales Associates, even if any Claims are brought or filed after transfer, termination or expiration of this Agreement or Abandonment of the Office. You agree to indemnify, defend and hold us and REMAX, LLC, and each of our and their Related Parties and our and their respective officers, directors, employees and shareholders harmless from and against, and to reimburse us and them for, all such fines, taxes, costs, expenses, damages, loss or liability for which we or they are held liable or which we or they incur in connection with any Claims, including, without limitation, actual and consequential damages, attorneys', accountants', and expert witness fees, cost of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses. You agree to waive all rights of subrogation against REMAX Regional, REMAX, LLC, each of our and their Related Parties, and our and their respective officers, directors, employees and shareholders. REMAX Regional and REMAX, LLC have the right to defend any Claims and, in connection therewith, to retain legal counsel of our or their choice and bill you for all costs and attorneys' fees incurred for any Claim originating from the acts/omissions of you, your Owners, employees, or Sales Associates, which costs and fees you must promptly pay. You agree to cooperate with us and REMAX, LLC in the defense of, and not to settle or compromise, without our and/or REMAX, LLC's prior written consent, any Claims to which we and/or REMAX, LLC are a party or which may affect our interests or the interests of REMAX, LLC. Your indemnification obligations described above will continue in full force and effect after, and notwithstanding, the transfer, expiration or termination of this Agreement, or Abandonment of the Office.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
Based on the 2025 Remax Franchise Disclosure Document, the franchisee is responsible for handling claims related to their business. The franchisee must indemnify Remax, LLC against any losses or liabilities arising from claims related to the franchisee's business operations.
Remax, LLC has the right to defend any claims and can retain legal counsel of their choice, billing the franchisee for all associated costs and attorney's fees if the claim originates from the acts or omissions of the franchisee, their owners, employees, or sales associates. The franchisee is required to cooperate with Remax, LLC in the defense of any claims and cannot settle or compromise any claims without the prior written consent of Remax, LLC.
However, the FDD excerpt does not explicitly state whether Remax needs to obtain consent from the customer before settling a claim. The document focuses on the relationship between the franchisor (Remax) and the franchisee regarding claims and indemnification. It outlines the franchisee's responsibilities for costs and cooperation but does not address customer consent directly.
Therefore, a prospective Remax franchisee should seek clarification from Remax regarding the process for settling claims and whether customer consent is required in such situations. Understanding the franchisor's policies on customer interaction and claim settlements is crucial for managing potential legal and financial risks.