Under what conditions is a Remax franchisee required to pay for an audit?

According to Remax's 2025 Franchise Disclosure Document, a franchisee may be required to pay for the cost of an audit under specific circumstances. These circumstances include failing to furnish required reports, supporting records, or other necessary information. Additionally, if a franchisee understates the amounts owed to RE/MAX Regional for any 3-month period by more than 5%, an audit at the franchisee's expense may be required. Furthermore, if an inspection reveals unlawful conduct or a breach of the Franchise Agreement, the franchisee will be responsible for covering the cost of the audit.

This provision ensures that Remax can verify the accuracy of financial reporting and compliance with the franchise agreement. It also serves as a deterrent against underreporting revenues or other non-compliant behaviors. The cost of an audit can vary significantly depending on the scope and complexity of the audit, potentially creating a substantial financial burden for the franchisee.

Franchisees should maintain accurate records and ensure timely and accurate reporting to avoid triggering an audit. It is also important to adhere to all terms of the franchise agreement to prevent any findings of unlawful conduct or breaches that could lead to an audit. This is a fairly standard practice in franchising, as franchisors need to ensure brand standards and financial accuracy across all franchise locations.