Why Re/Max shelled out $100M for regional franchise rights this year

Fee structure in company-owned regions boosts the bottom line
  • Re/Max has spent more than $100M this year buying back its master franchise regions, mostly recently in Georgia, Kentucky, Tennessee and southern Ohio.
  • The franchisor gets to keep 100 percent of the franchise fees in its company-owned regions, which means that per-agent revenue in those regions is nearly three times greater than for independent regions.
  • Re/Max's Dave Liniger says centralization makes the company more efficient.

Dave Liniger founded real estate franchisor Re/Max in January 1973 when there were no cell phones, fax machines were rare and the Internet had yet to be invented. Liniger grew his company by selling master franchises across the country, giving independent entrepreneurs the right to sell and service new Re/Max franchisees for a cut of royalty fees.