Under what circumstances would a Remax franchisee be obligated to pay for Lost Future Revenue and Intangible Damages?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
The damages that can reasonably be calculated at this time include lost future revenue ("Lost Future Revenue") and the damages that cannot reasonably be calculated at this time include loss of goodwill, brand devaluation, and lost opportunities ("Intangible Damages").
In the event of your Abandonment of the Office or early termination of this Agreement by us for any reason prior to the conclusion of the Term or any applicable renewal thereof ("Early Termination"), you shall immediately become obligated to pay us for Lost Future Revenue and Intangible Damages.
Lost Future Revenue shall consist of: (i) all amounts which you would have been obligated to pay as Monthly Ongoing Fees, Annual Dues, Marketing Fund fees, and if applicable, Hot Air Balloon Fund fees and Regional Development fees, from the date of Early Termination or Abandonment of the Office through what would have been the end of the Term; and (ii) repayment of all Franchisee Incentives granted to you during the Term.
We and you acknowledge and agree that it would be impracticable or extremely difficult to calculate the actual amount of Lost Future Revenue payable by you, and that the following method of calculation represents a fair and reasonable estimate of foreseeable Lost Future Revenue: Lost Future Revenue shall be calculated as the combined Monthly Ongoing Fees, Annual Dues, and Marketing Fund fees that would have been payable under this Agreement from the date of Early Termination of this Agreement or Abandonment of the Office, through the number of months (or partial months) remaining in the Term of this Agreement, multiplied by the greater of: (i) the highest number of Sales Associates and Unreported Agents (as defined in Subsection 6.M.) affiliated with your Office during any month prior to Early Termination; or (ii) the number of Sales Associates required under Section 7 of this Agreement to have been affiliated with the Office during such period remaining in the Term of this Agreement, plus, (i) if you are in Indiana, Minnesota, or Wisconsin, the Hot Air Balloon Fund fee and, if you are in Indiana, the Regional Brand Diversification Fund fee, multiplied by the number of months (or partial months) remaining in the Term of the Agreement and (ii) all Franchisee Incentives that have been granted to you at any time during the Term of this Agreement.
The total of these amounts shall constitute our Lost Future Revenue.
This payment is due and will be considered late if not made within 5 days of the Early Termination or Abandonment of the Office.
If timely payment is not made you must pay our Lost Future Revenue and additional late charges.
Nothing in this Subsection shall be construed to provide you with any right to unilaterally terminate, to seek an Early Termination by negotiation with us, or to Abandon this Agreement prior to the expiration of the Term.
Nothing in this Subsection shall be construed to impose an obligation on REMAX, LLC to negotiate an Early Termination with you.
Nothing in this Subsection will prevent or preclude REMAX Regional from seeking or receiving Intangible Damages and any and all other damages or remedies to which we may be entitled at law or in equity.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, a franchisee may be required to pay for Lost Future Revenue and Intangible Damages under specific circumstances related to the termination of the franchise agreement. These damages become relevant if the franchisee abandons the office or if Remax terminates the agreement early due to any reason before the term's conclusion or any applicable renewal period. This provision aims to compensate Remax for potential losses resulting from the franchisee's premature exit from the agreement.
Lost Future Revenue includes all amounts the franchisee would have been obligated to pay, such as Monthly Ongoing Fees, Annual Dues, Marketing Fund fees, Hot Air Balloon Fund fees (if applicable), and Regional Development fees, calculated from the date of early termination or abandonment through the end of the original term. It also includes repayment of any Franchisee Incentives granted during the term. The calculation method involves multiplying the combined Monthly Ongoing Fees, Annual Dues, and Marketing Fund fees by the greater of the highest number of Sales Associates/Unreported Agents affiliated with the office or the number of Sales Associates required under Section 7 of the agreement, plus any applicable Hot Air Balloon Fund fee or Regional Brand Diversification Fund fee, and all Franchisee Incentives received.
Intangible Damages, which include loss of goodwill, brand devaluation, and lost opportunities, are considered damages that cannot be reasonably calculated at the time of the agreement. Remax retains the right to seek these damages in addition to Lost Future Revenue. The franchisee is required to make this payment within 5 days of the Early Termination or Abandonment of the Office; failure to do so results in late charges. It is important to note that these provisions do not grant the franchisee the right to unilaterally terminate or abandon the agreement, nor do they obligate Remax to negotiate an early termination.
For a prospective Remax franchisee, this means understanding the financial implications of early termination or abandonment is crucial. The franchisee should be aware of the potential costs, which include not only the immediate fees and dues but also the longer-term revenue Remax anticipates receiving. Furthermore, the franchisee should recognize that Remax can pursue additional damages for intangible losses, which could significantly increase the financial burden of exiting the agreement prematurely. Franchisees should carefully consider these factors before signing the agreement and ensure they have a solid plan for managing their business to avoid potential termination or abandonment.