REMAX Real Estate: A Look at the REMAX Real Estate Franchise

Founded in 1973, the RE/MAX franchise has more than 120,000 agents worldwide in over 100 territories and countries as of 2019. It was named the number-one real estate franchise and the 15th-best franchise overall in a 2019 Franchise Times survey.

What makes RE/MAX so successful? The original RE/MAX premise was to allow agents maximum freedom to run their businesses and to pay them 100% of their commissions. Agents would pay for their office expenses via a "desk fee" and pay their own marketing expenses. Things have changed a little since then, but the franchise is still thriving.

Attract the Best and the Most Experienced

By creating a model as close to a completely autonomous business as possible, RE/MAX wanted to attract the more experienced agent. Expenses for office space, phones, copies, marketing, and more are all the responsibility of the agent, so those with established track records and financial stability are more likely to join this franchise.

What Are the Fees to the Agent?

Agents no longer receive 100% of their commissions; it's now 95% with a 5% corporate marketing fee coming off the top. This pays for national advertising and the national IDX search linkup system that purports to have all the listings in the country available at the national corporate website.

Many RE/MAX brokers offer split setups in an effort to attract more agents, many of whom might be fearful of a monthly overhead expense before they're established. New agents typically receive a lower split of 60/40 until they reach $23,000 in commission. After that, they move to a 95/5 split for the remainder of the year. Other commission options may include a 70/30 split or an 80/20 split until the agents reach $23,000 in commission, and then they are moved to a 95/5 split.

What Are the Franchise Fees?

Franchises have extensive fees, and, with RE/MAX, these include but aren't limited to a management fee of $138 per month per associate, annual dues of $410 per associate, a promotion fee of $131 per month per associate, a hot air balloon fund fee, and a renewal fee.

The initial franchise investment is estimated at anywhere from $38,000 to $219,000 including costs of office setup, inventory and supplies, signage, and miscellaneous opening costs, most of which can be determined and controlled by the franchisee. The franchise has a liquid cash requirement of $35,000, but it offers in-house financing for the initial franchise fee, which can run from $17,500 to $35,000 dollars. 

Fees for offices and services that the agent and broker determine based on space and service requirements can be negotiated.

Individuality and Competition Follow Independence

Visualize a group of independent accountants or attorneys who share space in an office complex for financial reasons, client access, and marketing purposes. Other than their common office structure, they are competitors and not part of a social or sharing office culture.

A RE/MAX office definitely has that together-but-separate feel of a group of businesspeople going their own ways, but there's a certain identification with the franchise and an overall cooperative attitude as well.