Under the Remax agreement, what specific obligations are NOT excused by a force majeure event?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
"Force Majeure" means an event that prevents our or your performance that is not the fault of or within the reasonable control of the party claiming Force Majeure. Force Majeure includes acts of god, fires, strikes, war, terrorism, riot, governmental laws or regulations, or any other similar event or cause rendering performance of the contract impossible. Except with respect to payment obligations, neither party shall be deemed to be in breach of this Agreement if a party's failure to perform its obligations results from Force Majeure and any delay resulting from Force Majeure will extend performance accordingly or excuse performance in whole or in part as may be reasonable. Force Majeure does not include the Franchisee's financial inability to perform, inability to obtain
financing, inability to obtain permits or licenses or any other similar events unique to the Franchisee or to general economic downturn or conditions.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to the 2025 Remax Franchise Disclosure Document, a force majeure event will not excuse payment obligations. A "Force Majeure" event is defined as an event that prevents performance due to circumstances outside the control of either Remax or the franchisee, such as natural disasters, strikes, war, or governmental regulations.
While a force majeure event may excuse other obligations under the agreement, the franchisee is still responsible for fulfilling their payment obligations to Remax. This means that even if a significant event disrupts the franchisee's ability to operate their business, they are still required to pay any outstanding fees, dues, or charges as outlined in the franchise agreement.
This condition is fairly standard in franchise agreements. Franchisors typically rely on consistent revenue streams from franchisees to maintain their operations and support the franchise system. Therefore, they often include clauses that ensure payment obligations are not excused, even in extraordinary circumstances. Prospective Remax franchisees should carefully consider this aspect of the agreement and ensure they have sufficient financial resources to meet their payment obligations, even during unforeseen events.