What did the plaintiffs in the Calabrese case allege Remax improperly did regarding sales agents?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
Plaintiffs allege, among other things, that RE/MAX, LLC and/or RE/MAX of New York Inc. improperly: refused to recognize an alleged verbal agreement to renew the franchise agreements; required Plaintiffs to renew on the then-current form of franchise agreement with allegedly less favorable terms; refused to allow Plaintiffs to renew their existing form of franchise agreement; and solicited, and subsequently granted competing franchise locations to, certain of the sales agents who had been associated with Plaintiffs in an alleged effort to secure certain of Plaintiffs' business despite alleged non-compete agreements of those sales agents.
Source: Item 3 — LITIGATION (FDD pages 21–29)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the Calabrese case, filed in 2018, included allegations about Remax's conduct concerning sales agents. Specifically, the plaintiffs, former Remax franchise owners Salvatore and Michael Calabrese, claimed that Remax improperly solicited and granted competing franchise locations to sales agents who had been associated with the plaintiffs. This was allegedly done to secure the plaintiffs' business, despite the existence of non-compete agreements with those sales agents.
This type of allegation is significant for prospective Remax franchisees because it raises concerns about Remax's potential interference with a franchisee's business and relationships with their sales agents. If Remax were to actively recruit or grant franchises to a franchisee's sales agents, it could directly harm the franchisee's revenue and market share. The existence of non-compete agreements adds another layer of complexity, suggesting that Remax may have disregarded contractual obligations in its pursuit of business.
It's important to note that these are just allegations, and the outcome of the case is not detailed in this excerpt. However, the fact that such claims were made highlights the importance of a prospective franchisee carefully reviewing the franchise agreement and understanding the terms related to sales agent relationships, non-compete clauses, and Remax's rights and obligations in this area. A prospective franchisee should seek clarification from Remax regarding their policies and practices related to sales agent recruitment and competition with existing franchisees.
Furthermore, it would be prudent for potential franchisees to inquire about the current status of the Calabrese case and any similar litigation involving allegations of interference with sales agent relationships. Understanding the resolution of such cases, if any, could provide valuable insight into Remax's approach to these issues and the potential risks for franchisees.