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B63/100FDD 2025

Re/Max — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

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Elevated Risk

6 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
100
Government-backed loans issued
Default rate
6.4%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
6 loans
Loans charged off or defaulted
Total loan volume
$36.2M
Avg loan size
$362K
Participating lenders
61

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Colorado
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-6.6% YoY) signals market contraction and potential franchisee struggles
  2. 02MEDNo disclosed average revenue or net income (missing Item 19) prevents realistic ROI assessment and suggests poor system performance
  3. 03HIGHMajor antitrust litigation with $55M NAR settlement indicates structural pricing issues affecting franchisee competitiveness and potential future liability
  4. 04MINORUnprotected territory creates internal competition and recruitment conflicts within the same franchise system
  5. 05MEDLow royalty rate (1%) masks potential hidden costs; commission-based model vulnerable to market downturns and agent attrition
  6. 06HIGHDisputed non-renewal and agent recruitment litigation indicates franchisee-franchisor relationship tensions and contract enforcement issues
  7. 07MINORHigh investment ceiling ($265,500) with low initial franchise fee ($35,000) suggests significant additional startup capital required before profitability

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.