What does management believe the accompanying financial statements of Remax reflect?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
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The accompanying consolidated financial statements ("financial statements") and notes thereto have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and include the accounts of RE/MAX, LLC and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying financial statements reflect all normal and recurring adjustments necessary to present fairly the Company's financial position as of December 31, 2024 and 2023, the results of its operations and comprehensive income (loss), changes in its member's equity and its cash flows for the years ended December 31, 2024, 2023 and 2022.
Use of Estimates
The preparation of the accompanying financial statements in conformity with U.S.
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, management believes that the accompanying financial statements reflect all normal and recurring adjustments necessary to fairly present the company's financial position as of December 31, 2024 and 2023. This includes the results of its operations, comprehensive income (loss), changes in its member's equity, and its cash flows for the years ended December 31, 2024, 2023 and 2022. These statements have been prepared following U.S. Generally Accepted Accounting Principles (GAAP).
However, the document also notes a caveat due to Remax's corporate structure. As a wholly-owned subsidiary of RMCO, LLC, which itself is a subsidiary of RE/MAX Holdings, Inc., the financial statements may not entirely reflect the results and financial position that would have been obtained if Remax were an autonomous entity. This is because the company's distributions to RMCO are used to fund Holdings' distributions to its shareholders, including dividends and repurchases of common shares.
For a prospective franchisee, this means that while the financial statements are presented fairly according to GAAP, they should be viewed in the context of Remax's position within a larger corporate structure. The flow of funds to its parent company could influence Remax's financial decisions and performance. Therefore, it would be prudent for potential franchisees to consider this relationship when evaluating the financial health and stability of the Remax franchise opportunity.