What is the total settlement amount that Remax agreed to pay as part of the Settlement?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
the Nationwide Claims. By the terms of the Settlement, the Company agreed to make certain changes to its business practices and to pay a total settlement amount of $55.0 million (the "U.S. Settlement Amount") into a qualified settlement escrow fund (the "U.S. Settlement Fund"). The U.S. Settlement Amount was deposited into the U.S. Settlement Fund in three installments per the Settlement Agreement (as defined below), of which 25% (or $13.8 million) was deposited during the third quarter of 2023, 25% (or $13.8 million) was deposited during the fourth quarter of 2023 and the final 50% (or $27.5 million) was deposited during the second quarter of 2024. The Company used available cash to pay the U.S. Settlement Amount. The Company recorded the U.S. Settlement Amount to "Settlement and impairment charges" within the Consolidated Statements of Income (Loss) with a corresponding liability recorded to "Accrued liabilities" within the Consolidated Balance Sheets. Until the conclusion of the appeals process, the U.S. Settlement Amount that was paid into the U.S. Settlement Fund is included in "Restricted cash" within the Consolidated Balance Sheets.
The Settlement Agreement and any actions taken to carry out the Settlement Agreement are not an admission or concession of liability, or of the validity of any claim, defense, or point of fact or law on the part of any party. The Company continues to deny the material allegations of the complaints in the Burnett Action, the Moehrl Action, the Moehrl-related antitrust litigations, and the Copycat Cases (as defined below).
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to the 2025 Remax Franchise Disclosure Document, Remax agreed to pay two settlement amounts related to legal actions. First, Remax agreed to pay a total settlement amount of $55.0 million (the "U.S. Settlement Amount") into a qualified settlement escrow fund (the "U.S. Settlement Fund") to resolve Nationwide Claims. This amount was paid in three installments: 25% (or $13.8 million) in the third quarter of 2023, 25% (or $13.8 million) in the fourth quarter of 2023, and the final 50% (or $27.5 million) in the second quarter of 2024.
Second, Remax OA reached an agreement to resolve Canadian antitrust litigations by paying a total settlement amount of $7.8 million Canadian dollars (the "Canadian Settlement Amount"). As of December 31, 2024, this was approximately $5.4 million in U.S. dollars. This settlement aims to resolve all claims in the Canadian antitrust litigations and release Remax OA, the Company, RE/MAX Holdings, Inc., their other subsidiaries and affiliates, and RE/MAX sub-franchisors, franchisees and their sales associates in Canada from these litigations.
It's important to note that these settlements are not admissions of liability, and Remax continues to deny the allegations in these cases. The settlements were made after considering the risks and costs of continuing the litigation. The U.S. Settlement Amount is held as restricted cash until the appeals process is complete, and the Canadian settlement requires court approval. If these settlements do not receive final approval, Remax may face additional litigation with potentially material effects on its financial position.