Does the prohibition against disparagement in the Remax franchise agreement prevent a franchisee from communicating information to a governmental authority as required by law?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You further agree not to, and to use your best efforts to cause your affiliates or anyone else acting on your behalf not to, disparage, defame, libel or make untrue, malicious, or offensive statements about REMAX Regional, REMAX, LLC, the RE/MAX brand, or the RE/MAX organization, any of our Related Parties or any current or former RE/MAX franchisees, or any of our or their respective officers, directors, employees or shareholders, or make any disparaging comments concerning our business relationships or the matters referred to in this Agreement, which would subject the RE/MAX brand to ridicule, scandal, reproach, scorn, or indignity or which would negatively impact our goodwill, or that of our Related Parties, the RE/MAX brand or the RE/MAX Marks. This provision is not meant to prevent you from communicating or sharing information with any governmental authority as may be required by law.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to the 2025 Remax Franchise Disclosure Document, the franchise agreement's prohibition against disparagement is not intended to prevent a franchisee from communicating or sharing information with any governmental authority as may be required by law. This means that while Remax franchisees are generally prohibited from making disparaging remarks about the Remax brand, organization, or related parties, this restriction does not extend to legally required communications with government entities.
This provision protects the franchisee's ability to comply with legal obligations without fear of violating the franchise agreement. For example, if a franchisee is legally required to report certain information to a regulatory agency, this clause ensures they can do so without facing repercussions from Remax for disparagement.
This type of clause is fairly common in franchise agreements to balance the franchisor's need to protect its brand reputation with the franchisee's need to comply with the law. It provides clarity and reassurance to franchisees that fulfilling their legal duties will not be considered a breach of contract.