Under what conditions will a Remax franchisee not be entitled to rights or privileges under the Franchise Agreement?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be in material default of an essential condition of this Agreement and we have the right to terminate this Agreement effective upon delivery of notice of termination to you and without providing an opportunity to cure, if:
- (1) you and REMAX Regional, acting reasonably and in good faith, have not agreed on a location for the Office within 90 days of the Agreement Date;
- (2) you fail to open the Office and begin business operations in compliance with the terms and provisions of this Agreement within 180 days of the Agreement Date;
- (3) you or your Owner responsible for the Office fails to attend, prior to the opening of the Office or within 30 days of the Agreement Date, whichever is sooner, the RE/MAX Initial Education Program that REMAX, LLC conducts for new franchisees;
- (4) you voluntarily abandon, surrender, transfer control of or lose the right to occupy the Premises, or fail to actively operate the Office, for a period in excess of 5 consecutive business days, unless your failure to do so is caused by fire, flood, earthquake or other similar cause beyond your reasonable control, as more fully set forth in Subsection 15.AA.;
- (5) you or any of your Owners sell, lease, convey, give away, subfranchise, sublicense, pledge, mortgage, assign, transfer, encumber or otherwise dispose of any direct or indirect interest in this Agreement, the Franchise, the assets of the Franchise or Office or any interest in violation of the provisions of Section 12 of this Agreement;
- (6) a voluntary or involuntary petition in bankruptcy is filed by or against you or any of your Owners unless such petition is set aside, withdrawn or ceases to be in effect within 20 days of the date of any such filing;
- (7) you or one of your Owners or the Business Entity is declared or judicially determined to be insolvent or all or a substantial part of your or your Owner's assets are assigned to or for the benefit of any creditor, or you admit your inability to pay your debts as they become due, or a liquidator, trustee in bankruptcy, custodian, receiver, receiver and manager, sheriff, or any other officer with similar powers is appointed temporarily or permanently, either pri
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, a franchisee can be in material default of the Franchise Agreement, leading to termination of rights, under several conditions. These include failing to agree on a location for the office with Remax Regional within 90 days of the agreement date, or failing to open the office and begin operations within 180 days of the agreement date.
Further conditions that could lead to a loss of rights and privileges include failure of the franchisee or their owner to attend the RE/MAX Initial Education Program prior to opening the office or within 30 days of the agreement date. Abandoning the premises, transferring control, or losing the right to occupy the premises for more than five consecutive business days, unless due to events like fire or earthquake, also constitutes a material default. Violating the agreement by selling, leasing, or transferring any interest in the franchise without approval can also result in termination.
Additionally, filing for bankruptcy, being declared insolvent, or assigning assets for the benefit of creditors can lead to termination of the agreement. These conditions highlight the importance of adhering to the terms of the franchise agreement and maintaining operational and financial stability to avoid losing rights and privileges as a Remax franchisee. Prospective franchisees should carefully review these conditions and ensure they can meet these obligations before entering into the agreement.
Remax also reserves the right to terminate a franchisee's eligibility for any and all then-current and future Franchisee Incentives, even if the franchisee cures such default. If the franchisee fails to cure any such default within the cure period provided in the Agreement, or if such default cannot be cured, or if the franchisee abandons the office, Remax reserves the right to require the franchisee on demand to repay any Franchisee Incentives that the franchisee received from Remax prior to such default.