Franchisor Re/Max Holdings Inc. announced today that it has priced an initial public offering that it expects will net at least $177 million.

The franchise network, which serves more than 90,000 agents in 6,300 offices and 90 countries, said it will offer 10 million shares that it expects to be priced between $19 and $21 per share. Re/Max also said it intends to grant the underwriters of its IPO a 30-day option to to buy up to 1.5 million additional shares.

After deducting underwriting discounts and estimated offering expenses, Re/Max expects net proceeds of $177 million from the offering, assuming an IPO price of $20 per share. If underwriters fully exercise their option to purchase additional shares, the net proceeds will total $205.2 million, the company said in an amendment to its S-1 registration statement with the Securities and Exchange Commission.

It’s the latest in a string of real estate IPOs that have captured the attention of investors. Franchisor Realogy and listing portals Zillow and Trulia all have pulled off successful IPOs, with the stock prices of the second two skyrocketing this year.

Re/Max, which currently owns the right to sell brokerage franchises in 10 of its 32 franchise regions in the U.S. and Canada, said previously that it planned to use $27.3 million of the proceeds from the IPO to reacquire franchise rights in the Central Atlantic and Southwest regions to boost its percentage of U.S. and Canadian agents to 54 percent from the current 46 percent.

The company said it also intends to use the cash to redeem preferred membership interests and repurchase ownership stakes from existing shareholders.

Reacquiring franchise rights in a region “substantially increases our revenue per agent and provides an opportunity for us to drive enhanced profitability, as we receive a higher amount of revenue per agent in our company-owned regions than in our independent regions,” the company disclosed in its registration statement.

Re/Max reported $143.7 million in revenue for 2012, with 91 percent coming from its operations in the U.S. (74 percent) and Canada (17 percent), and net income of $33.3 million.

In 2012, the annual revenue per agent in company-owned regions in the U.S. and Canada was approximately $2,288, compared with $803 per agent in independent regions.

Re/Max franchise regions. Source: Re/Max regulatory filing.

Re/Max franchise regions. Source: Re/Max regulatory filing.

Since 1998, Re/Max said it’s reacquired franchise rights in seven independent regions, which as of Aug. 31 accounted for 28,496 Re/Max-affiliated agents. There are 5,885 Re/Max-affiliated agents in the two regions where reacquisition of franchise rights are pending.

“We intend to continue to pursue reacquisitions of the regional Re/Max franchise rights in a number of independent regions in the U.S. and Canada,” the company said.

As the real estate market continues to rebound, big players in the industry are capitalizing on the growing positive perception, and cash flow, that the industry is garnering.

Zillow and Trulia, which organized successful IPOs in 2011 and 2012, respectively, have seen their shares soar recently, and Realogy’s IPO is allowing it to pay down its massive debt.

Some industry observers say that Re/Max’s IPO has gone public partly to raise some cash to compete, both in technology and in public mindshare, with the likes of Zillow, Trulia and their older sibling operator Move Inc.

“The highly visible success of Zillow, Trulia and Move Inc. over the past few years may have overshadowed ‘traditional’ real estate companies, and Re/Max is making a bold move, reposturing itself and its 90,000-plus agents,” Jude Galligan, an agent in Austin, Texas, and co-founder of photo-based referral network Homespin, told Inman News last month. “I think this is just the beginning.”

In its S-1 registration statement, Re/Max says its business strategy is “to continue to sell franchises and recruit and retain agents.”

The company — which claims to have held the top market share among franchisors since 1999, measured by total U.S. and Canadian residential transaction — says it sold 739 franchises globally in 2012, and expects to sell “an equal or greater number of franchises” in 2013.

Factors that are key to driving growth include the company’s brand name awareness, experienced and productive agents, leading market share, Web traffic, and high level of customer satisfaction, Re/Max said.

Agents affiliated with the Re/Max franchise network generally pay a pre-agreed fee that helps pay for overhead and other fixed costs of the brokerage, retaining “a high percentage of commissions” in return. That’s a model “that is highly attractive to high-producing agents,” the company said.

On average, agents working with Re/Max-affiliated brokerages were involved in 17 transactions in 2012, about twice the industry average, the company said, citing Real Trends survey data.

2012 transactions per agent at franchisor-affiliated brokerages


Source: Real Trends via Re/Max regulatory filing.

At $63,482, the median annual commission income for U.S. Re/Max agents in 2012 was 46 percent higher than the median annual income for U.S. Realtors, the company said, citing statistics compiled by the National Association of Realtors.

The company also said its LeadStreet referral system, which provides information on prospective buyers and sellers free of referral fees “is a major competitive advantage in that no other national real estate brand provides their agents with comparable access to free leads.”

LeadStreet generates leads when consumers visit the franchisor’s websites, which include,, and Collectively, those sites attracted more than 52 million visits in 2012, the company said, citing Experian Marketing Services Hitwise data. Since 2006, the websites have generated more than 12.4 million leads to Re/Max agents.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription