Economists had expected the real estate industry to remain healthy throughout the year 2020. After the COVID-19 pandemic, this sector will hit the ground running, raking in revenues. And if you want to gain traction in the real estate market, it’s high time you buy a brokerage franchise. One esteemed business name that comes up is RE/MAX. And in this article, we’ll dig deeper into the actual RE/MAX franchise cost.
Founded in 1973, RE/MAX has since developed several real estate brokerage offices worldwide. The company boasts of the INTEGRA culture, hence, the RE/MAX INTEGRA distinction.
This family-owned business empowers up-and-coming entrepreneurs to make a name in the real estate industry. This revered company allows agents maximum freedom with RE/MAX as their guide and support. Since then, they have offered several franchises in the U.S., Ontario, American Midwest, New England, Europe, and more.
To date, there more than 2,750 offices and 120,000 agents in over 100 countries. In fact, RE/MAX accounts for 30 percent of the total global real estate network. Now that I have your attention, let’s delve into the actual RE/MAX franchise cost.
Helpful links: For all your franchising news, interviews, and more, visit Franchise How.
How Much Does a RE/MAX Franchise Cost?
So how much does a RE/MAX franchise cost? While you can choose between several franchising options, an all-in investment amount that covers the franchise fee and startup costs is $39,500.
Depending on the franchising option, you may have to pay a monthly management fee of $138 per associate. Also, you need to factor in the annual associate fee of $410, and a marketing fee of $131 per month. There is also the Hot Air Balloon Fund fee of $100 per month and a range of other fees.
Cost Breakdown
When buying a RE/MAX franchise, expect to shell out around $39,500 to $221,000 for your initial investment. To know more about the initial costs and other fees, here’s a complete breakdown:
Estimated Initial Investment
Name of Fee
Low
High
Initial Franchise Fee
$10,000
$25,000
Office Set-Up
$3,500
$70,000
Exterior Office Signage
$500
$10,000
Furniture, Fixtures, and Equipment
$5,000
$41,000
Inventory and Supplies
$500
$4,000
Training Fees and Expenses
$3,000
$5,000
Miscellaneous Opening Costs
$2,000
$16,000
Additional Funds – 3 months
$15,000
$50,000
ESTIMATED TOTAL
$39,500
$221,000
Fee Breakdown
In addition, you will also be responsible for a host of fees during the entire franchise relationship. We break those fees down below.
Type of Fee
Amount
Management Fee
$138 per month during 2020 for each Sales Associate1 in your Office. For subsequent 12-month periods beginning on May 1 of each year, the amounts projected are:May 2021 – $143 May 2022 – $148 May 2023 – $153 May 2024 – $1582
Promotion Fee
$131 per month during 2020 for each Sales Associate1 in your Office. For subsequent 12-month periods beginning on May 1 of each year, the amounts projected are:May 2021 – $136 May 2022 – $141 May 2023 – $146 May 2024 – $1512
Transaction Fee
1% of gross monthly real estate commissions earned by the Office as a result of the efforts of all the Sales Associates1affiliated with your Office.
Hot Air Balloon Fund Fee
$100 per month
Annual Dues
$410 for each Sales Associate affiliated with your office.
Transfer Fee
$2,500 for transfer of controlling interest (50% or more); $1,000 for a transfer of less than a controlling interest plus legal or administrative costs RE/MAX Regional or RE/MAX, LLC incur in connection with each transfer.
Renewal Fee
100% of the initial franchise fee that would ordinarily be payable by a franchisee as of the date of the Franchise Agreement; 10% discount for early renewals completed at least 6 months prior to expiration of the Franchise Agreement.
Quota Deficiency Fee
An amount equal to two times the monthly Management Fee multiplied by the number of Sales Associates by which your Office is below the required Quota.
Late Fees and Late Payment Charges
As liquidated damages and not as a penalty: For late payments, 20% of amount owed plus 1.5% per month, but no higher than the highest rate allowed by law. For late submission of reports, $100 per day.
Document Preparation Fee
$500 (Charged for preparation of documents in connection with Franchise Agreement amendment, default, termination, abandonment of the Office, and for preparation of promissory notes or similar documents.)
Initial Training and Momentum Field Training
$0
Educational Courses
Will vary under circumstances
Conventions and Seminars
$195-$800 registration fee per person for RE/MAX, LLC’s Convention. Nominal fees or charges may also be assessed for a variety of other social functions. Other events will vary under the circumstances.
Consultation
Will vary under circumstances.
Insurance
Cost of Insurance.
Audit
Cost of inspection or audit.
Costs and Attorneys’ Fees
Will vary under circumstances.
Indemnification
Will vary under circumstances.
Broker/Owner Conferences, Meetings, and Retreats
0-$200 registration fee
Lost Future Revenue
Will vary under circumstances.
Holdover Fee
Will vary under circumstances.
How Do I Start a RE/MAX Franchise?
If you’re ready to apply for a RE/MAX franchise, “it all starts with a zero-pressure conversation.” The franchise sales team will gladly offer several franchising options fit for your business needs. However, you have to be a licensed real estate broker to buy a real estate franchise or independent brokerage.
Next is to determine the legal brokerage structure. Once you know that, you can apply for a Full-Service Brokerage, which entails building a business in the real estate market. This is ideal for brokers and owners with experience in hiring talent and leading teams. You may also grab the Luxury offer, which appeals to agents and teams dealing with upscale properties. Moreover, you may opt for the Teams franchise, which is ideal for existing team leaders who want to grow their business. Another option is the Micro Markets franchise, which caters to a smaller market.
Once you know your business goals, make sure you plan on securing the funds to open your franchise. This includes franchise fees and business operating costs. Finally, ensure that your business has all legal paperwork that adheres to state or national laws to start operating seamlessly.
Whatever franchising option you pick, RE/MAX ensures there’s something for every type of entrepreneur. If you’re ready to apply, here’s a link to the RE/MAX application form.
