How To Start RE/MAX Franchise in USA
Understanding The Costs & Procedure For Starting A RE/MAX Franchise in USA
Are you looking for a profitable & growth-oriented franchise opportunity? You have come to the right place. As every sector is badly hit by Covid-19, finding the right industry to invest in has become even more challenging.
However, the real estate industry seems promising once the pandemic is officially over. If you want to gain traction in the real estate sector, buying a brokerage firm franchise could be a great idea.
Intending to introduce you to the best franchise opportunity in the US, we scrolled the web (so you don’t have to) and found the RE/MAX franchise to be the best fit right now.
According to a recent survey, RE/MAX has emerged as one of the top franchises in the United States. The real estate firm has been in the industry for over four decades.
In this article, we will dig deeper into the actual franchise cost, profit, and application process of owning a RE/MAX franchise in USA.
RE/MAX Franchise In USA: Company Overview & Future Prospects
RE/MAX is a US-based international real estate firm that has been franchising since 1975. That’s not it! The Company is counted among the world’s largest real estate firms, with more than 125,000 agents in 100 countries.
Founders Dave and Gail Liniger started RE/MAX in 1973. Currently, its headquarters are in Denver, Colorado. The business’s areas of expertise include helping customers buy and sell homes as well as locating suitable properties for investments.
Additionally, they provide services like title insurance, home financing, and property management. There are many different agent types available at RE/MAX, including full-time, part-time, and military relocation specialists.
For new agents, the Company also provides a mentoring program. In addition, the Company offers a franchise for running a RE/MAX real estate sales office, which provides the general public with a range of real estate services.
RE/MAX has consistently been at the top of the list of the world’s most recognized brands. The Company is entirely franchised, and about half of its locations are outside the United States.
The Company has earned a solid reputation in the real estate sector, and its franchisees profit from this. As a result, RE/MAX may be the ideal franchise opportunity for you if you’re looking for a tried-and-true business model and a well-known brand.
What Does RE/MAX Look For In Franchisees In USA?
RE/MAX accepts franchise applicants from various backgrounds. While experienced Real Estate Agents are given preference, applicants from related industries such as property development, Marketing, Management, financial services, Sales, Surveying, and Conveyancing are also accepted. Additionally, the Franchisor also accepts fresh and inexperienced candidates.
To successfully operate a RE/MAX franchise in USA, you should have management skills and qualities. Here’s a list of eligibility criteria set by the Franchisor:
- The candidate should be ambitious and determined.
- The applicant should have the commitment and enthusiasm necessary to build a thriving business.
- They should demonstrate strong Leadership, Sales, and Management skills and recognize the importance of providing excellent customer service.
How Much Does It Cost To Start A RE/MAX Franchise In USA?
The estimated initial investment required to start a RE/MAX Franchise in USA is somewhat between $42,000-$284,000. The amount includes an initial franchise fee of $17,500-$37,500, which grants franchisees the license to operate a business under the RE/MAX name.
Here’s a detailed breakdown of costs & fees required to start a new RE/MAX Franchise in USA:
Financial Requirements
| Initial Investment | $44,000 – $236,500 |
| Royalty Fee | $125-$165/agent/mo. |
| Liquid Cash Requirement | $35,000 |
| Term of Agreement | 5 Years |
Initial Cost/Investment
| Initial Cost | Minimum | Maximum |
| Initial Franchise Fee | $17,500 | $37,500 |
| Office Set-Up | $3,500 | $72,000 |
| Furniture, Fixtures, and Equipment | $5,000 | $41,000 |
| Exterior Office Signage | $500 | $10,000 |
| Training Fees and Expenses | $3,000 | $6,000 |
| Inventory and Supplies | $1,500 | $4,000 |
| Insurance | $2,000 | $5,000 |
| Additional Funds – 3 months | $10,000 | $50,000 |
| Miscellaneous Opening Costs | $1,000 | $11,000 |
| ESTIMATED TOTAL | $44,000 | $236,500 |
Fixed Fees
| Fees | Amount |
| Annual Dues | $410 for each salesperson in the franchisee’s office. |
| Monthly Ongoing Fees | ● Component 1: Continuing Franchise Fee is $138 per month for each salesperson. This fee increase by at least $2.50 on July 1, 2022, and by at least $2.50 on the 1st day of July in each subsequent year of the Franchise Agreement.
● Component 2: Continuing Franchise Fee (or “Broker Fee”) – An amount equal to 1% of gross commissions and other revenue. ● Component 3: Continuing Franchise Fee (or “Technology Fee”): – Up to $15 per month per sales associate. |
| Hot Air Balloon Fund Fee | $100 per month per office. |
| Marketing Fund Fee | $131 per month for each salesperson in the franchisee’s office. |
| Transfer Fees | $2,500 per Franchise Agreement plus such other sums as may be required to pay RE/MAX’s other costs, including accounting and legal fees. |
| Team Office Initial Fee | $1,000 |
| Renewal Fees | $3,000 – $12,500 or, if financed, $7,000 to $14,000. |
| Team Office Renewal Fee | $500 for each team office. |
| Document Preparation Fee | $500 to $2,000 |
| Monthly Ongoing Team Office Fee | $100 per month for each team office. |
| Insurance | Varies |
| Insufficient Funds Processing Fee | $100 + any other administrative costs and fees incurred by the franchisor. |
| Audit | Entire cost of Audit |
| Interest and Late Charges | ● For late payments of annual dues, there are additional fees of 20% of the total amount due,
● 10% of the total amount due for all other fees (or the maximum amount permitted by law) ● $100 per day for late report submissions, and interest of 1% per month compounded (or the highest rate permitted by law) on the total amount due for all fees other than annual dues. |
| Costs and Attorneys’ Fees | Varies |
| Conventions and Seminars | $195 – $800 registration fee per person. |
| Indemnification | Varies |
| Broker/Owner Conferences, Meetings, and Retreats | $0 – $550 registration fee. |
| Initial Education | $0 |
| Educational Courses | $50 – $2,000 |
| Holdover Fee | $2,500 per month per office. |
| Agent Tools Platform | $0 |
| Lost Future Revenue | Varies |
| Unreported Agent Payments | Varies |
Does RE/MAX Offer In-House Financing?
Yes, the Company offers In-house financing for covering initial franchise fees. To cover other costs, you can opt for third-party lenders. However, RE/MAX is not eligible for SBA loans, including the 7(a) loan.
RE/MAX franchise doesn’t have an SBA Franchise ID and was not in the SBA Franchise Directory. The SBA Franchise Directory will only include reviewed business models and eligible under SBA’s affiliation rules and other eligibility criteria.
How To Apply For RE/MAX Franchise In USA?
Whether you’re searching for domestic (within the United States) or international RE/MAX franchise opportunities, the Company has you covered. Here’s a step-by-step process for starting a RE/MAX franchise in USA:
- First, fill out and submit the online application form on the website. This kick-starts the entire process.
- If your application meets the Company’s eligibility criteria, a franchisor representative will call you to give you all the information you seek.
- Attend a meeting with them and ask many questions as you can to get a clear idea of whether investing in the RE/MAX franchise in USA is a profitable decision or not.
- Sign the agreement and prepare for the grand opening event.
- Additionally, you must undergo the training program offered by the Franchisor.
What Type Of Training & Support Does RE/MAX Offers To New Franchisees?
REMAX offers an initial training program to new franchise owners, which covers all information regarding the operation of the franchise in the US. The program intends to help franchisees build and manage successful teams in the right office environment.
The Company offers additional courses throughout the year, including IT, Marketing, Selling Skills, Basics of Real Estate, Budgeting Office Expenses, Leadership, Recruitment, and Retention Techniques.
Here’s a quick overview of training & support offered by the Franchisor:
| Classroom Training | 30 hours |
| Additional Training | Online and classroom training available on-demand |
| Ongoing Support | ● Security & Safety Procedures
● Field Operations ● Newsletter ● Meetings & Conventions ● Toll-Free Line ● Grand Opening ● Online Support ● Proprietary Software ● Franchisee Intranet Platform ● Site Selection |
| Marketing Support | ● Ad Templates
● National Media ● Social Media ● SEO ● Website Development ● Email Marketing ● Regional Advertising ● Marketing Planning & Support |
What Is The Average Earning Of A RE/MAX Franchise In USA?
An average RE/MAX Franchise in USA earns $50,000 annually, or $24 per hour, which is approx 18% lower than the national average for all Franchise Owners at $60,000 annually.
However, the exact income of a franchise owner at RE/MAX Franchise may vary on various factors like location, size, etc.,
On the other hand, your goals as a business owner are to maintain service quality while keeping sales high and expenditure low. The gross revenue of a franchise includes rent/mortgage, inventory supplies, staffing/family, utilities, administrative costs vice versa.
The sales may vary from location to location and season. However, most franchises’ initial costs are typically fixed, covering most of the start-up operating costs like signage, furniture, decoration, and renovations in the first few months.
Conclusion
RE/MAX is a well-recognized name in the real estate industry, which has exponentially grown to over 100,000 agents in nearly 100 nations. It’s a diverse network of professionals who collaborate together across boundaries and cultural divides in the spirit of success sharing.
Whether you buy an office in a well-established location like Australia, Europe, or South Africa or introduce the brand to customers in a new RE/MAX zone, you join a dynamic network with unmatched competitive advantages. Additionally, you gain from factors like a reputation built on 40 years of arduous labor, potent advertising, and a fundamental belief that everyone wins.
Faq’s
RE/MAX was founded in 1974 and started offering franchises in 1976
What Does A RE/MAX Franchise Cost?
The estimated initial investment required to start a RE/MAX Franchise in USA is somewhat between $42,000-$284,000, which includes an initial franchise fee of $17,500-$37,500.
RE/MAX, LLC is a franchisor based in the United States. The Company sells single-family homes through real estate agents in the US.
Looking at the current market reputation of the Company, RE/MAX franchise In USA is a worthy investment decision.
How Much Do RE/MAX Franchise Owners Make?
An average RE/MAX Franchise in USA earns $50,000 annually, or $24 per hour, which is approx 18% lower than the national average for all Franchise Owners at $60,000 annually.
The Company offers In-house financing for covering initial franchise fees. To cover other costs, you can opt for third-party lenders.