What is the role of RIHI, Inc. in the ownership structure of RMCO, LLC, related to Remax?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
RE/MAX, LLC and its consolidated subsidiaries (the "Company") is a Delaware limited liability company and a wholly owned subsidiary of RMCO, LLC ("RMCO" or "Member"). RMCO is a subsidiary of RE/MAX Holdings, Inc. ("Holdings"). Holdings completed an initial public offering (the "IPO") of its shares of Class A common stock on October 7, 2013. Holdings' only business is to act as the sole manager of RMCO. As of December 31, 2024, Holdings owns 60.2% of the common membership units in RMCO, while RIHI, Inc. ("RIHI") owns the remaining 39.8%. The Company's distributions to RMCO and RMCO's subsequent distributions to Holdings are largely used to fund Holdings' distributions to its shareholders, including Holdings dividends and repurchases of common shares. Because of the Company's relationship as a wholly owned subsidiary of RMCO, the accompanying consolidated financial statements do not purport to reflect the results of operations and financial position which might have been obtained if the Company were autonomous.
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, RIHI, Inc. plays a significant role in the ownership structure of RMCO, LLC, which is the parent company of RE/MAX, LLC. As of December 31, 2024, RIHI owns 39.8% of the common membership units in RMCO. The remaining 60.2% is owned by RE/MAX Holdings, Inc. ("Holdings"). Holdings' primary business function is to act as the sole manager of RMCO.
This ownership stake means that RIHI has a substantial financial interest in RMCO and, by extension, in the performance of Remax. The distributions made by RE/MAX, LLC to RMCO, and subsequently from RMCO to Holdings, are used by Holdings to fund distributions to its shareholders, including dividends and share repurchases. RIHI, as a significant owner of RMCO, benefits from these distributions.
For a prospective Remax franchisee, this information highlights the complex corporate structure behind the Remax brand. It is important to understand that Remax is not a standalone entity but is part of a larger network of companies with various stakeholders. The financial performance of Remax directly impacts the returns to these stakeholders, including RIHI. This structure is typical for large franchise systems, where multiple entities are involved in managing and distributing profits.
Understanding the ownership structure can provide franchisees with insights into the financial motivations and potential strategic decisions of the franchisor. While the FDD provides this overview, prospective franchisees may want to further investigate RIHI's specific interests and its relationship with RE/MAX Holdings, Inc. to fully grasp the potential implications for the Remax franchise system.