Under what condition is a Remax franchisee required to pay Costs and Attorneys' Fees?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit | Cost of inspection or audit. | As incurred. | Payable if you fail to furnish reports, supporting records or other required information or you understate the amounts owed to RE/MAX Regional for any 3-month period by more than 5%, or if an inspection reveals other conduct that is unlawful or a breach of the Franchise Agreement. |
| Interest and Late Charges | As liquidated damages and not as a penalty: 20% of amount owed for the late payment of Annual Dues; 10% of amount owed for all other fees (or maximum amount allowed by law); $100 per day for the failure to timely submit reports; plus interest of 1% per month compounded (or highest rate allowed by law) of amount owed for all fees except Annual Dues. | Due with payment of outstanding amounts or submission of reports. | Payable on all overdue amounts or for the failure to timely submit reports. |
| Costs and Attorneys' Fees | Will vary under circumstances. | As incurred. | Payable if we engage legal counsel in connection with your failure to comply with the Franchise Agreement. |
| Indemnification | Will vary under circumstances. | As incurred. | You have to reimburse RE/MAX Regional if it is held liable for claims, or otherwise incurs legal or other costs, arising from the operation of your Office. |
Source: Item 5 — INITIAL FEES (FDD pages 29–43)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, a franchisee may be required to cover costs and attorneys' fees if Remax engages legal counsel due to the franchisee's failure to comply with the Franchise Agreement. The exact amount of these fees will vary based on the specific circumstances and legal work required. This means that if a Remax franchisee violates the terms of their agreement, they could be responsible for not only rectifying the violation but also covering Remax's legal expenses incurred in addressing the non-compliance.
This provision is fairly standard in franchise agreements, as it protects the franchisor from bearing legal costs resulting from a franchisee's breach of contract. For a prospective Remax franchisee, it underscores the importance of fully understanding and adhering to the terms outlined in the Franchise Agreement. Failure to do so can result in unexpected and potentially significant legal expenses, in addition to other penalties or consequences for non-compliance.
It is important for potential franchisees to carefully review the Franchise Agreement and seek legal counsel to fully understand their obligations and the potential financial implications of non-compliance. Understanding the terms and conditions can help franchisees avoid situations that could lead to legal action and the requirement to pay costs and attorneys' fees. This also highlights the importance of maintaining open communication with Remax to address any concerns or disputes proactively, potentially avoiding escalation to legal action.