Under what conditions can a Remax franchisee abandon their premises for more than 5 consecutive business days without violating the agreement?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that you will operate the Office continuously during the Term, and that you will not voluntarily abandon, surrender, transfer control of or lose the right to occupy the Premises or fail to actively operate the Office under the RE/MAX System for a period in excess of 5 consecutive business days ("Abandon" or "Abandonment") unless your failure to do so is caused by Force Majeure, as defined in Subsection 15.AA.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, a franchisee can abandon their premises for more than five consecutive business days without violating the franchise agreement if the failure to operate is caused by what the agreement refers to as "Force Majeure." The agreement specifies that this includes events such as fire, flood, earthquake, or other similar causes beyond the franchisee's reasonable control. This clause protects the franchisee from being penalized for circumstances that are genuinely out of their hands.
This provision is fairly standard in franchise agreements, as it acknowledges that unforeseen events can disrupt business operations. However, it's important for a prospective Remax franchisee to understand the specific definition of "Force Majeure" as outlined in Subsection 15.AA of the franchise agreement, to fully grasp what circumstances would qualify. The franchisee should also be prepared to document and demonstrate that the abandonment was indeed due to such an event to avoid any potential disputes with Remax.
In practical terms, if a Remax office is rendered unusable due to a natural disaster, the franchisee would not be in breach of contract for temporarily ceasing operations. However, this exception does not cover other reasons for closure, such as voluntary business decisions or financial difficulties. Therefore, it is crucial for franchisees to maintain adequate insurance coverage and have contingency plans in place to address potential disruptions not covered by the Force Majeure clause.