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Statistics from a RE/MAX Press Release: RE/MAX Firms Command REALTrends 500 Survey Again (May 10, 2004)

March 5, 1989 Professor Milton Friedman Senior Research Fellow Hoover Institution Stanford University Stanford, CA 94305 Dear Milton: I apologize for the delay in responding to your letter of January 5, 1989. Unfortunately, the demands on my time have been more excessive than usual. I thoroughly agree with you that American Jews should be more interested in strengthening Israel in ways other than giving money. I also agree that the Israeli government has too much power and authority. Thus, I cannot help but believe that the Israel Center for Social and Economic Progress can be a very worthwhile organization. Nevertheless, as will become obvious to you from the following, it is impossible for me to undertake involvement in this project at this time. I do promise to revisit this topic as soon as the demands on my time have been suf ciently reduced. What is occupying my attention outside the normal time demands is a thing called Globex, perhaps I have already mentioned this before. In my opinion, Globex is about to change the way the world markets work. What 268

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a few overseas countries. During the next five-year interval, RE/MAX reached just under 90,000 agents with offices in 45 countries. By the end of 2004, that number will reach 100,000 agents in 52 countries. Dave Liniger s stratosphere balloon may not have made it around the world, but the RE/MAX balloon certainly did. As if overnight, RE/MAX became one of the most successful franchises in the world. Surely, people must wonder, Is this 20-year period of tremendous growth the real story Shouldn t the point from which the business finally took off be the moment that we begin to learn about what RE/MAX did differently Well, that in a nutshell is our problem. Because when we analyzed what RE/MAX did differently during the 20 years when it grew like crazy (compared to the first 10 years when it barely survived), we find ourselves at a loss for explanation. You see, RE/MAX did nothing differently. Yes, RE/MAX had become a much more sophisticated organization. It had the best technology, the best training, the best brand, and the best agents. But none of those leaps were revolutionary; they were just progressions along a path that had long been taken. Indeed, the RE/MAX growth story is just as remarkable for what did not happen. RE/MAX did not change its core leadership team. Although new leaders did come on board, they did so gradually and organically, becoming part of the original family over time, growing into their roles as family members do. How many companies retain their core leadership over a 30-year period We know of very few. RE/MAX did not change its core strategy. The core strategy evolved according to changing conditions; but the premise of agent-by-agent growth, driven by broker owners in regional territories, remained fundamentally the same. RE/MAX did not change its dream. The vision had always been to become the biggest real estate network in the world by providing agents with maximum commissions. The shift from a straight 100 percent commission split to a system in which 95 percent of the commission goes to the real estate agent and 5 percent to the broker/owner is, in our view, completely consistent with that dream. In 1973, when RE/MAX started, the cost of launching a real estate office was no more than $10,000. As the industry changed and became

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