The REMAX Franchise: An Entrepreneurial Focus

Is RE/MAX right for you?

Business people shaking hands in warehouse
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Founded in 1973, the RE/MAX® franchise now has more than 115,000 agents worldwide in over 100 territories and countries. It was named the number one real estate franchise and the 8th best franchise overall in a 2016 Franchise Times survey. It was number two in total sales volume growth that year. 

What makes RE/MAX so successful? The original RE/MAX premise was to allow agents maximum freedom to run their business and to pay them 100 percent 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 obviously 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. In speaking to their agents, it's clear that they value their independence and the ability to retain all—or most of—their earned commissions.

What Are the Fees to the Agent?

New agents no longer receive 100 percent of their commissions. It's now 95 percent with a 5 percent 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.

Other fees include but aren't limited to a management fee of $138 per month per associate, annual dues of $400 per associate, a promotion fee of $131 per month per associate, a renewal fee, and a hot air balloon fund.

The initial franchise investment is estimated at anywhere from $37,500 to $225,000 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 $10,000 to $25,000 dollars. 

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

Other Options for Commission Splits Now Offered by Brokers

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. One example is a 70/30 for new agents with reduced fees.

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.

The RE/MAX office definitely has that together-but-separate feel of a group of business people going their own ways, but there's a certain identification with the franchise and an overall cooperative attitude as well. For example, you'll find great individuality of furnishings and styles, particularly in the case of private offices.