Re/Max sues competitor eXp Realty over efforts to lure away agents
Denver-based real estate agent Re / Max has sued a competitor who lured some of its agents away.
Re / Max filed a lawsuit against eXp Realty in Washington in the Denver District Court on Thursday, accusing the company of “illegally disrupting existing contracts.”
Re / Max’s franchise model is key to the argument. The company, which claims to have over 135,000 agents, notes that its offices are independently owned and operated. The franchise agreements are “not arbitrary and contain specific termination provisions”, including specific end dates.
According to Re / Max, eXp had several Re / Max franchisees give up their franchise before the agreed term expired and contacted numerous others to do the same. The disorder is said to have been on for several years, but “eXp’s efforts have intensified over the past few weeks.”
“We welcome fair competition within the industry, but this type of behavior is not,” said Adam Contos, CEO of Re / Max, in a letter to the affiliates provided by a company spokeswoman for BusinessDen. “Misleading agents and encouraging franchisees to break their contracts are illegal business practices. We’re not going to stand idly by as they try to tarnish our brand. “
EXp calls itself the “fastest growing cloud-based brokerage in the world” and has 50,000 agents worldwide. There is no such thing as a franchise model.
“The lawsuit and allegations are unfounded and we plan a strong defense,” eXp said in a statement to BusinessDen.
Re / Max said eXp “wrongly induced” an unspecified South Carolina franchisee to quit in late 2020 or early 2021, and the company learned in March that eXp attracted 23 employees from an unspecified California franchisee who has also thought about a task.
However, the company’s lawsuit is primarily focused on several New Jersey franchisees.
Re / Max has signed a franchise agreement with McWernli Properties and its owners Christopher Walsh and Christian Giamanco to operate offices in Middletown and Holmdel through 2023 and 2025 respectively. But the company and its owners sent an “alleged formal abandonment notice” last month and came to eXp according to the lawsuit.
The same happened to KFM LLC and owners Allison and Gene Krutyansky, who, according to the lawsuit, have reached an agreement to operate Re / Max offices in North Brunswick and Monroe Township through late 2021 and March 2022, respectively. They sent their notice of termination on May 3rd.
In addition to the lawsuit against eXp, Re / Max has sued McWernli Properties and KFM LLC together with their owners separately.
Re / Max is aware of eXp’s ongoing efforts to get franchisees in Texas and Florida to give up too. And it accuses the company of posting misleading information about Re / Max’s compensation model.
Wheeler Trigg O’Donnell’s lawyers Kathryn Reilly, Thomas Olsen and Melissa Romero are representing Re / Max in the litigation. The company was founded in Denver in 1973 and is headquartered at 5075 S. Syracuse St.