RE/MAX Holdings, Inc. operates as a franchisor in the real estate industry.
The company franchises real estate brokerages globally under the RE/MAX brand (‘RE/MAX’) and mortgage brokerages in the U.S. under the Motto Mortgage brand (‘Motto’). It also sells ancillary products and services to its franchise networks, including loan processing services to its Motto network and other third parties through its wemlo brand. The company organizes its business based on the services it provides in Real E...
RE/MAX Holdings, Inc. operates as a franchisor in the real estate industry.
The company franchises real estate brokerages globally under the RE/MAX brand (‘RE/MAX’) and mortgage brokerages in the U.S. under the Motto Mortgage brand (‘Motto’). It also sells ancillary products and services to its franchise networks, including loan processing services to its Motto network and other third parties through its wemlo brand. The company organizes its business based on the services it provides in Real Estate, Mortgage, and its collective franchise marketing operations, known as the Marketing Funds. RE/MAX and Motto are 100% franchised. The company maintains a low fixed-cost structure, which, combined with its recurring fee-based models, enables it to capitalize on the economic benefits of the franchising model, yielding high margins and significant cash flow. The company is focused on operating its business as efficiently and effectively as possible, maintaining a growth mindset, and delivering the absolute best customer experience. It provides education, and technology products, valuable marketing, and leverages its size and scale to continue to build the strength of its brands and enhance its competitive advantages.
Brands
RE/MAX: The RE/MAX strategy is to capitalize on the strength in real estate. The RE/MAX brand is built on the strength of its global, entrepreneurial franchise network and its agent-centric model that helps to attract, develop, and retain trusted, productive, and professional agents by maximizing their opportunity to retain a larger portion of their commissions.
Motto: The Motto franchise model offers U.S. real estate brokers, real estate professionals, mortgage professionals, and other investors access to the mortgage brokerage industry. Motto is highly complementary to the RE/MAX real estate business and is designed to improve the profitability of real estate brokerages and professionals by providing diversified revenue and income streams. Residential real estate brokerage owners and teams who own and operate a Motto franchise offer potential homebuyers an opportunity to find both real estate agents and independent Motto loan originators at offices near each other. Motto loan originators offer homebuyers competitive financing choices by providing access to a variety of quality loan options from multiple wholesale lenders. In addition, Motto provides powerful technology, including the proprietary Loan Brokering System (‘LBS’) through wemlo, which has been specifically designed and tailored to loan originators operating in the mortgage brokerage channel. The LBS and other technology offerings are designed to simplify the mortgage process and help franchisees and loan originators comply with complex mortgage regulations. Motto franchisees are mortgage brokers. Likewise, as a franchisor of the Motto brand and network.
wemlo: The wemlo platform is a fintech solution, and the first cloud service for mortgage brokers, which combines third-party loan processing with the all-in-one digital LBS platform to add to the mortgage value proposition and growth opportunity. Wemlo was created to solve one of the biggest challenges in the mortgage brokerage channel – inefficient loan processing. In addition to being the system of record for its Motto franchise network, the LBS also has automated tasks with an intuitive framework that enables loan processors of varying levels of experience to manage the workflow and efficiently provide a high level of service to the loan originators they support.
Franchising Model and Offerings
The RE/MAX Franchise Offering: RE/MAX is a 100% franchised business, with all RE/MAX branded brokerage office locations being operated by franchisees. The company franchises directly in the U.S. and Canada, in what it calls ‘Company-Owned Regions.’ Franchisees (or broker-owners), in turn, enter into independent contractor relationships with real estate agents who represent real estate buyers and sellers.
In the early years of the company’s expansion in the U.S. and Canada, the company sold regional franchise rights to independent owners for certain geographic regions, in what it calls ‘Independent Regions,’ pursuant to which those Independent Regions have the exclusive right to sell franchises. It has pursued a strategy to acquire those regional franchise rights from Independent Regions in the U.S. and Canada. Its remaining Independent Regions cover nine states, portions of one additional state, and the province of Quebec.
The Motto Franchise Offering: Mortgage brokers are familiar with the latest loan programs, products, and choices available through various wholesale lenders. In 2024, approximately 19% of mortgage originations were handled by mortgage brokerages.
Motto is the first and only national mortgage brokerage franchise brand in the U.S. The company is a mortgage brokerage franchisor, not a lender, banker, or mortgage brokerage. Its franchisees are brokers, not lenders or bankers, and so neither the company nor its franchisees fund or service any loans. As a franchisor, the company helps its Motto franchisees establish independent mortgage brokerage companies, with a model designed to comply with complex regulations, essentially providing a ‘mortgage brokerage in a box.’ This model not only creates an ancillary business opportunity for current real estate brokerage firms and professionals, but also offers opportunities for mortgage professionals seeking to open their own businesses and other independent investors interested in financial services. The Motto model offers value to its franchisees by offering: Setup Guidance; Compliance, Education, and Support; Access to Multiple Lenders; Technology; Loan Processing; and Franchising Expertise.
The company’s Motto brokerage franchisor, Motto Franchising, LLC, offers seven-year agreements with franchisees. Motto sells franchises directly throughout the U.S. as there are no regional franchise rights in the Motto system. Its customers are both RE/MAX and non-RE/MAX real estate brokers, real estate professionals, independent mortgage professionals, and other investors seeking access to the mortgage brokerage industry.
Competition
RE/MAX
The company’s national competitors in the U.S. and Canada include the brands operated by Anywhere Real Estate Inc. (Century 21, Coldwell Banker, ERA, Sotheby’s, Corcoran, and Better Homes and Gardens), Berkshire Hathaway Home Services, eXp Realty, Keller Williams Realty, Inc., and Royal LePage (in Canada). Its franchisees also compete to attract and retain agents against real estate franchisors that offer 100% commissions and low fees to agents from firms like HomeSmart and Realty ONE Group. National brokerage models that operate both with and without a physical footprint, including Compass, eXp Realty, the REAL Brokerage, LPT Realty, and Fathom Realty have gained market share in recent years as competition for highly productive agents and teams has continued to intensify.
Segment
The company has three reportable segments: Real Estate, Mortgage, and Marketing Funds.
Real Estate comprises the company’s real estate brokerage franchising operations under the RE/MAX brand name and corporate-wide shared services expenses.
Mortgage comprises the company’s mortgage brokerage franchising operations under the Motto brand and mortgage loan processing software and services under the wemlo brand.
Marketing Funds represents the company’s marketing campaigns designed to build and maintain brand awareness for both of its franchise brands and the costs of agent marketing technology, such as BoldTrail. Other Revenue contains all other operations, which are quantitatively insignificant.
The majority of the company’s revenue is recurring in nature and driven by the number of agents in the RE/MAX network and the number of open offices in the Motto network. Its recurring revenue streams include continuing franchise fees, which are fixed contractual fees paid monthly by regional franchise owners in Independent Regions or franchisees in Company-Owned Regions based on the number of RE/MAX agents in the respective franchised region or office or by Motto franchisees based on the number of open offices, and annual dues, which are paid annually by RE/MAX agents.
The remainder of the company’s revenue is derived from franchise sales and renewals, preferred marketing arrangements, event-based revenue, mortgage loan processing revenue, and digital advertising revenue.
Real Estate: The amount of revenue recognized varies significantly depending on whether RE/MAX affiliates are in Company-Owned Regions in the U.S. and Canada, Independent Regions in the U.S. and Canada, or Global Regions outside of the U.S. and Canada. The company receives a higher amount of revenue per agent in its Company-Owned Regions than in its Independent Regions in the U.S. and Canada, and more in Independent Regions in the U.S. and Canada than in Global Regions. It receives the entire amount of the continuing franchise fee, broker fee, and initial franchise and renewal fee in Company-Owned Regions, whereas it receives only 15% or 30% of the amount of such fees in Independent Regions, which is a fixed rate in each Independent Region established by the terms of the applicable regional franchise agreement. It bases its continuing franchise fees, annual dues, and broker fees outside the U.S. and Canada on the same structure as its Independent Regions, except that the aggregate level of such fees is substantially lower in these markets.
Mortgage: The company’s revenue is derived in the U.S. from fixed monthly fees, franchise sales and renewals, and mortgage loan processing.
Marketing Funds: The company’s Marketing Funds revenue is derived primarily from RE/MAX franchisees in Company-Owned Regions based on the number of RE/MAX agents in the respective franchise, with smaller contributions by Independent Region owners and Motto franchisees. Marketing Funds revenues are fixed contractual fees paid monthly by RE/MAX and Motto franchisees based on the terms outlined in the franchise agreement.
Intellectual Property
The company’s RE/MAX trademark has been in use for over fifty years. It has registered the RE/MAX trademark in the U.S., Canada, and over 150 other countries and territories, and has registered various versions of the RE/MAX balloon logo and real estate property sign design in numerous countries and territories as well. It has registered Motto and Motto Mortgage as trademarks in the U.S. and registered Motto as a trademark in other countries as well. It has also registered the wemlo trademark in the U.S. and Canada. Its franchisees, Independent Regions, and Global Regions actively use the RE/MAX and Motto trademarks pursuant to their franchise or regional agreements with the company. The company also is the registered holder of remax.com, remax.ca, mottomortgage.com, and a number of other domain names that include ‘remax,’ ‘motto,’ or ‘wemlo,’ including domains that it offers to its Global Regions to use as their primary internet address.
Seasonality
The company’s results of operations are somewhat affected by seasonal trends. Its Adjusted EBITDA margins are often lower in the first and fourth quarters (year ended December 31, 2024) due primarily to the impact of lower broker fees and other revenue as a result of lower overall sales volume, as well as higher selling, operating, and administrative expenses in the first quarter for expenses incurred in connection with the RE/MAX annual agent convention.
History
RE/MAX Holdings, Inc. was founded in 1973. The company was incorporated in 2013.
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