Related-Party Transactions

12 Months Ended

Dec. 31, 2016

Related Party Transactions

Related-Party Transactions

17. Related-Party Transactions

The Company’s owned real estate brokerage operations paid advertising fees to regional and national advertising funds, which promote the RE/MAX brand. These advertising funds are corporations owned by a majority stockholder of RIHI, who is also the Company’s Chief Executive Officer, Chairman and Co-Founder. This individual does not receive any compensation from these corporations, as all funds received by the corporations are, as a result of contractual commitments in our franchise agreements, required to be spent on advertising and technology for the respective regions.  During the years ended December 31, 2016,  2015 and 2014, the Company’s owned real estate brokerage operations paid $11,000,  $917,000 and $1,152,000, respectively, to these advertising funds. These payments are included in “Selling, operating and administrative expenses” in the accompanying Consolidated Statements of Income.

The majority stockholders of RIHI, including the Company’s current Chief Executive Officer, Chairman and Co-Founder and the Company’s Vice-Chairman have made and continue to make a golf course they own available to the Company for business purposes. During the years ended December 31, 2016,  2015 and 2014, the Company used the golf course for business purposes at minimal charge.

The Company provides services, such as accounting, legal, marketing, technology, human resources and public relations services, to certain affiliated entities, and it allows these companies to share its leased office space. During the years ended December 31, 2016,  2015 and 2014, the total amounts allocated for services rendered and rent for office space provided on behalf of affiliated entities were $1,969,000,  $1,720,000 and $2,186,000, respectively.  Such amounts are generally paid within 30 days and no such amounts were outstanding at December 31, 2016 and 2015. In addition, affiliated regional franchisors have current outstanding continuing franchise fees, broker fees and franchise sales revenue amounts due from the Company of $145,000 and $66,000 as of December 31, 2016 and December 31, 2015, respectively. Such amounts are included in “Accounts payable to affiliates” in the accompanying Consolidated Balance Sheets.