Good morning, and welcome to the RE/MAX Holdings Third Quarter 2019 Earnings Conference Call and Webcast. My name is Sharon, and I will be facilitating the audio portion of today's call. At this time, I would like to turn the call over to Andy Schulz, Vice President of Investor Relations. Mr. Schulz?

Thank you, operator. Good morning, everyone, and welcome to RE/MAX Holdings third quarter 2019 earnings conference call. Please visit the Investor Relations page of remax.com for all earnings-related materials and to access the live webcast and the replay of the call today. If you are participating through the webcast, please note that you will need to advance the slides as we move through the presentation. Turning to Slide 2. Our prepared remarks and answers to your questions on today's call may contain forward-looking statements. Forward-looking statements include those related to agent count, franchise sales, financial measures and guidance, brand expansion, competition, technology, housing market conditions, dividends, strategic and operational plans, and business models. Forward-looking statements represent management's current estimates. RE/MAX assumes no obligation to update any forward-looking statements in the future. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in forward-looking statements. These are discussed in our third quarter 2019 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures on today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our Web site. Joining me on our call today are Adam Contos, our Chief Executive Officer; and Karri Callahan, our Chief Financial Officer. Ward Morrison, President of Motto Mortgage and Nick Bailey, RE/MAX Chief Customer Officer will join us for the Q&A. With that, I'd like to turn the call over to RE/MAX Holdings' CEO, Adam Contos. Adam?

Thank you, Andy, and thanks to everyone for joining our call today. The successful launch of our booj technology platform, greater stability in our U.S. agent count, continued double-digit growth in international agent count, and ongoing Motto Mortgage expansion, all were key contributors to our third quarter results. We're starting to see positive traction from the multiple strategic moves we've made the past two years. And although it's still early, our recent performance coupled with the improving housing markets in both the U.S. and Canada gives us added confidence that we'll end 2019 and enter the new year with good momentum. Highlights of the quarter included; global RE/MAX agent count increased 3.5% exceeding 128,000 agents for the first time in our history, revenue of 71.5 million, adjusted EBITDA of 28.2 million, adjusted EPS of $0.61 per share, the successful launch of the RE/MAX technology platform powered by booj with more and more agents adopting it each week, and the continuing growth of the Motto Mortgage brand which recently sold its 150th franchise. Let's start here. Looking at Slide 3. Motto was launched three years ago with the aim of disrupting the mortgage industry by providing more options, transparency and convenience for consumers. Motto not only creates additional business for current real estate brokerage owners and teams, but also offers opportunities for mortgage professionals seeking to open their own businesses as well as independent investors interested in financial services. Our Motto Mortgage brand continues to expand at an encouraging clip and the Motto team’s focus on ongoing improvement continues to pay dividends. Recent Motto franchisees are opening their stores at an accelerated rate with almost half of the 29 franchises sold this year through September 30 having already opened their doors. Furthermore, the average days open is now approximately 90 days,…

Thank you, Adam. Good morning, everyone. Overall, we are pleased with our third quarter results. A better than expected housing market contributed to stronger than anticipated broker fee revenue. Our solid top line results combined with lower than planned tech training expenses and other costs, driven in part by favorable timing, helped to deliver strong profit performance. Moving to Slide 10. Revenue increased to 71.5 million during the third quarter, due to the acquisition of the marketing funds on January 1st. The expansion of Motto, healthy international RE/MAX agent growth and an improving housing market helped offset lower revenue caused by reduced U.S. agent count. Excluding the marketing funds, organic growth dipped 2.3% and adverse foreign currency movements had a negligible impact. Continued attrition of booj’s legacy customer base adversely affected revenue by about 400,000 in the third quarter. By excluding that impact, our organic growth would have declined just 1.5%. Recall that at the time of purchase, booj’s existing client base generated annual revenue of approximately 7 million. We strategically elected not to grow this customer base and chose to focus on building product for RE/MAX while continuing to service booj’s existing clients. We expected booj’s legacy client base to decrease over time, because of industry consolidation and other reasons. However, it has declined more rapidly than anticipated. More on that in a moment. Looking at Slide 11. Selling, operating and administrative expenses were 24.5 million in the third quarter of 2019, a decrease of 3 million or 10.9% compared to the third quarter of 2018 and represented 45.7% of revenue, ex the marketing funds, compared to 50.1% in the prior year period. SO&A expenses decreased primarily due to lower equity-based compensation expense and other personnel expenses and professional fees, partially offset by increases in training expenses for the…

Thanks, Karri. Moving to Slide 14. With continued strength in Motto Mortgage stabilizing RE/MAX agent count in the U.S. and the ongoing rollout of our landmark booj technology platform, we are starting to see positive traction because of the many strategic moves we have made over the past two years. Sentiment is high within the networks of both of our brands and we are looking to finish 2019 with good momentum going into 2020. With that operator, let's open it up for questions.

[Operator Instructions]. In the interest of time, please limit yourself to one question and one follow-up question. Your first question comes from Jason Deleeuw with Piper Jaffray.

Thanks for taking the questions. Good to see some stabilizing U.S. agent counts. Can you just characterize the competitive environment for agents right now? And then regionally, are there any callouts of areas that are stronger or weaker?

Hi. Good morning, Jason. It’s Adam. We’re really excited about talking about this because of the initiatives that we’ve put in place and with us bringing on Nick Bailey as the Chief Customer Officer and I’ll let him jump in on the answer here in a moment. But ultimately what we see and we’re excited about is we implemented several new initiatives recently for brokerage growth and we’re aggressively pursuing that. Really, we have two key pillars that we’re pursuing. One is, obviously, agent growth throughout the network obviously particularly in the company-owned regions that we operate from headquarters here as well as continuing to implement the exciting new booj platform that’s been picked up so well and with such excitement by our offices throughout our regions. So, I’ll let Nick kind of jump in and talk a little bit more about agent growth.

Thanks, Adam. Hi, Jason. I’ll tell you what, as the new guy here for two months, I couldn’t be more thrilled coming into this role talking about growth for a couple of reasons. One, people ask me all the time, what were you surprised about the most? The investment, the organization is made to set our value proposition to have something good to grow with. And so immediately, as an example, we launched a growth campaign in October for U.S. and Canada. And it’s early but it is safe to say that October showed some of the best gains of any month yet this far and especially looking at it being in fourth quarter. It’s too early to forecast on it, but at the same time we know that recruiting is a contact sport. And when we take the value proposition that this organization has invested in, in the last years and we partner directly with our franchise owners to help drive growth in their organizations, they’re hungry for it, they’re excited about it, they love it and we’re seeing results of it, and it will be the foundation of what we not only do in this quarter but build on it moving into 2020. As far as your question about regions and areas, it is also more competitive out there than it’s ever been, but that’s not surprising. We had approximately a 12-year run up in a seller’s market. And when that happens, you see a lot of new entrance into the industry. History has proven that and there are markets as Phoenix as an example, the competitive ground-zero test market for the U.S. and we remain very, very strong there. Our offices continue to grow. And we see that not only there but across the country.

That’s great to hear. Thanks for all that. And then the shelf registration, I’m just looking for a little bit more color. There was mention of strategic bolt-on acquisitions. Is this looking at other brokerages or is this just other technology that you’re looking to acquire or is it just the independent regions, just trying to better understand what you’re thinking with the shelf?

Hi. Good morning, Jason. It’s Karri. So with regards to the shelf, we really looked at this as a blocking and tackling exercise. With bringing on Nick and really having leaders of both brands cemented in place, we wanted to make sure that the company had all of the necessary financial flexibility to allocate capital to those initiatives that would really derive the most value. And so as we look at things from a technology perspective, as Adam mentioned, we do believe that booj is truly the foundation. We think that it will be a great product and the best product for our unique culture of highly productive agents. However, there may be opportunities from a bolt-on technology perspective that we could look to enhance that platform and potentially do a pay-as-you-go type of model to create a better service offering and a differentiated value proposition that would really satisfy what some of our strategic goals are around increasing our already very strong per agent productivity and helping our agents deliver a better consumer experience.

Sounds good. Thank you very much.

Next question comes from Brad Berning with Craig-Hallum.

Hi. Good morning and congrats team on the longer-term investments. It’s starting to lead to the agent results. It’s great to hear. I wanted to follow up on the margins side of the equation. You’ve obviously had investments in Motto and you’ve had investments in booj. You talked about a couple of the different kind of one-off items for the year ahead a little bit, but maybe you can talk about the trajectory that you’re starting to see from those investments and how do you think about the opportunity from margin expansion versus the opportunity to accelerate other investments to drive future growth? How do you think about those trade-offs going forward on the margin outlook?

Hi. Good morning, Brad. It’s Adam. Yes, it’s exciting what we’re seeing because long-term investments obviously take a long time to start to feel the movement on in the impatient marketplace that a lot of times we play in. You just got to sit there and keep grinding away in order to make these things happen. And we’ve been really excited around here. We have a great team working on this with RE/MAX, Motto and booj to make sure that we maintain that consistency. Ultimately, what we’re looking for is providing clarity of value to our customer base and I think that is really shining through right now with these investments. I’ll let Karri address the margins here. But ultimately I’m happy with the direction we’re seeing these things go. Obviously bringing Nick onboard has given us a second brand leader. He’s the RE/MAX brand leader, Ward is the Motto brand leader and that allows us to be very focused on driving towards growth in both of those verticals. So, Karri?

Yes. Just building on what Adam was talking about in terms of growth of both verticals, in September and October we actually had some of the best months and strongest months from Motto franchise sales. And then as Nick was mentioning, between his arrival as well as the deployment of the booj platform, we are seeing some better performance in terms of agent talent recruiting and retention. However, it is very early days. Obviously, those are the two biggest drivers of the top line and there’s a lot of golf to be played with respect to the reminder of 2019 and we head into 2020. We’ll definitely have more information as we get into the end of February for next year. But the strength of the business model is foundational to one of our competitive advantages and there is inherent leverage in the model. So if we can really get acceleration in those top line drivers, the long-term possibility from margin expansion is absolutely there. To Adam’s point, we will continue to invest appropriately to help continue to differentiate the value proposition. And we do have some of those headwinds that we talked about in the scripted remarks. But overall, it’s really good to see some of the momentum that we’ve got going right now.

I appreciate that. And then maybe, Nick, one other broader, bigger picture follow up. Maybe you can spend just one or two minutes here real quickly and give your bigger picture thesis of why you think RE/MAX is a winner in the real changes that are going on and fundamentally changing this industry? And obviously you came back here, so help us understand what you see is the real opportunity set within this changing landscape?

Brian, I love the question. First and foremost, I was here for a while and I was on the outside and I’d tell audiences this. You know how hard it is to complete against RE/MAX when you’re not with them? And I mean that. It’s true. The value associated with the professionalism and the per person productivity of a RE/MAX agent is unmatched. Coming back and walking into this, we talk about the investments that the organization has made, I truly believe that the value proposition of this organization is the strongest that I have ever seen it since I have been in this industry in 23 years. So when I look at the long-term piece of it, and we’re giving you examples of growth, what we launched in October is just one piece of what we’re thinking about on a much bigger scale for next year on direct growth initiatives. But we also have to look at we didn’t have something like that in three years. And now we can take what is such a very strong value proposition and partner with our owners in a much more direct way, and that’s what’s going to lead to growth, because our agent count growth comes through our owners. And we’re identifying very quickly the obstacles that they have not only for competitors but the activities associated with what they need to do to grow their businesses and we are then going to fill the gaps and help and be right there with them as business partners. That’s just focus. And it’s not rocket science in a way. But when you have the value proposition like this to build on, it’s incredible. When Karri talks about some of the things that I see that are so important, yes, we can talk about per person productivity, but there are some fundamental things in the industry that drive agent success. Most the successful agents have their business based on repeats and referrals. We see it over and over again and that is the foundation of a RE/MAX agent. At the same time we know that there are areas in which agents in general miss out on repeat and referral business. And so when we talk about booj, there are pieces that we’re looking at, at a micro, micro level to say, how do we fill the gaps of what is a systemic issue for agents to move the number and close more deals and increase that per person productivity number. So a lot of things in that answer, but I think what we have now; value proposition, direct growth, help with our business partners and then we are dissecting the challenges that get in the way for brokers and for agents and filling those in. And I just believe that’s a winning formula for us moving into next year.

Exciting stuff. Thank you.

Next question comes from Tony Paolone with JPMorgan.

Thank you. Just a question on the legal and stepping up the cost there it sounds like going into next year. Is there more to that than I guess the moral lawsuit? And can you give us any color as to how that’s all progressing or how you’re looking at this stuff?

Hi. Good morning, Tony. This is Karri. It is related to industry-related litigation. We don’t comment on specific litigation matters that are outstanding. What I can tell you building on what Nick was saying is the strength of the RE/MAX network is in the quality of our agents and the global footprint and the overall brand recognition that the network has. And given those strengths, we do believe that the company is positioned regardless of any potential outside changes that may have to weather those storms.

Okay. And then just another detail question, I don’t know, can you provide us how many Motto Mortgage franchise were actually sold in 3Q or how many have been sold to date to just get a sense as to what the pipeline of openings looks like?

Sure. This is Ward. Pipeline is very, very robust. I think some of the changes that we made we’re still on course for about 50 Motto sales just like we did last year right now. But September and October have been two of our best months this year. And I think that’s tied to some initiatives that we rolled out that I think will continue to further grow. So we rolled out a referral program to our existing broker owners to try and get them involved in the excitement and the growth of the network. Also, we just had a Meet Motto, which is our discovery day where we had 25 prospects out. The interesting thing about that was that only 10% of them were RE/MAX. The rest 90% were outside the RE/MAX family, so that very exciting to see and I think that could lead to an inflection point of having more and more independent real estate companies, independent teams, investors and LOs start to look more closely at the product. So we’re continuing to look at the same type of forecast as last year, not tens of Mottos, but starting to see some great excitement around it.

Okay. Can you give a sense like how many were sold as of the end of 3Q?

29, I think – 29 or 30, right around there.

So in the quarter itself?

No, sorry, year-to-date at that time.

Got it, okay. Thank you.

Next question comes from Vikram Malhotra with Morgan Stanley.

Thanks for taking the question. So just first on the international side, I’d be interested to hear kind of what Nick has to say as well. You’ve got now critical mass in some markets there and I’m wondering how do you convert more of this to higher revenue and maybe change the revenue instead of on a per office basis to more like the U.S. and Canada where it’s driven by the agent productivity and number of agents?

Hi. Good morning, Vikram. It’s Adam. I just got back from the European convention where I spoke with about 35 different countries and understood a little closer some of their different business models. And obviously 35 countries, essentially we have 35 different ways of doing real estate business or even more than that, because each country also has its subareas just kind of like in the U.S. where real estate rules and laws or traditions are different. So ultimately what we’re continuing to strive for is increasing our count of productive agents in those different countries and helping them build out the real estate infrastructure. We’re seeing it very effective. And I don’t know that we even approach critical mass in most of those areas, because you look at Portugal which is one of the smaller countries involved; yet is massively one of our most populated with RE/MAX agents and continues to be a strong growth catalyst in Europe for us. We discussed on the scripted call before this that some of the other countries that we’re seeing also are showing strong growth and continue to do so. And those you look and you might think, oh, we’ve got critical mass in like Israel or India or some of these other places, but actually we continue to grow. So really it’s about expanding our footprint, evangelizing the brand because we are in a global marketplace now and we see a lot of flow of purchase going across borders which is a huge advantage of our brand with our expansive global footprint and the close connectivity of our network and our ability to communicate so seamlessly with each other. So, as far as ancillary monetization, we’re exploring different opportunities for that, particularly how can you monetize the technology or the data or things of that nature. But ultimately that continued to be a long-term projection as we continue to build out the footprint and look at those opportunities.

Adam, I’ll jump in on that. I’ll add a couple of things. In my past, I have some experience with a global real estate network. And as you know, you’re seeing double-digit growth coming from our global side. And yet when you start breaking it down country by country, there are some that are completely untapped that we have a long runway to be successful with. And so the idea that we are limited in the global is not even on the table. We are just identifying very specifically what countries have the most demand and how do we provide our team more focused to growing those countries specifically into next year.

That’s reasonable. So just on the U.S. you mentioned sort of the recent trends and more stabilization in Canada. U.S. continues to see somewhat negative growth, and I’m wondering if you can sort of maybe bifurcate or give us a bit more color as you look at the attrition you’ve seen, kind of what’s driving that? How much of that is to competition? How much is just people not succeeding? And then how do you plan to kind of – is there a plan to kind of have different approaches for maybe different groups of agents in terms of hiring?

It’s kind of been a holistic approach for us to reinvigorate agent count. When you look at what causes a business to grow or start to stall out in growth, I think the leading indicator is sentiment of the people involved and the clarity of the value proposition. And we’ve been focusing very heavily as has Nick in clarifying our value proposition completing defining how our agents continue to grow their businesses. And we see the sky just opening up with opportunity for our agents when it comes to their individual growth. And when they start seeing that, understanding it and putting the tools that provide some of that assistance in the place, particularly like the booj platform as well as our market dominance and expertise, you start to see change moving in a positive direction driven by that sentiment and attitude in daily activities, because this is an entrepreneurial contact sport. We know that and that’s what we have to light the fire under and that’s what we’ve been doing just an amazing job with, with our executive team all the way down to the partners that we have and our amazing brokerages. So, I’ll the rest over to Nick to kind of add a little bit more color to that. But I think a lot of it really starts with what’s in their heart and getting up in the morning and pursuing the business and that’s what we’re seeing some reinvigoration in as well.

Yes, two things. One thing I failed to mention a little bit earlier when we talked about this early growth that we’re seeing as a result of these initiatives, it’s coming from our U.S. company-operated regions. And so that’s a good sign because we’re so directly involved in being able to monitor exactly to your question, where it’s coming from and why? The second thing that we’re looking at though is pouring fuel on utilizing data to understand geographically a more micro level of areas of opportunity. And so this is something that’s been worked on, that we have been focusing on not only franchise sales but agent count opportunity and using the data to help us drive specific areas of opportunity. It’s going to be a big part of our playbook going into next year.

Great. That sounds good. Thank you so much.

Next question comes from Ryan McKeveny with Zelman & Associates.

Hi. Thanks so much and good morning and great job. So just to clarify on the U.S. agent count and kind of setting expectations around that for the coming fourth quarter. So the recent gains, the growth initiatives all sound great. But I think, Adam, you alluded to the fourth quarter typically is softer just from a seasonality perspective in terms of agent count and historically it does decline in 4Q versus 3Q. So just as far as kind of setting the expectations for the U.S. for the fourth quarter, when we look at 3Q and 2Q down 2.8, down 2.7, can you help us just think about the fourth quarter? Are we to expect that that year-over-year decline should be lessening or could it still be in a similar range as the last couple of quarters and then potentially the growth come through more in 2020? Any clarification there on the fourth quarter would be very helpful. Thank you.

Hi, Ryan. Good morning. It’s Karri. So, yes, we do think the comp should be easier here as we get into the fourth quarter. Obviously, from an overall macro perspective, we’re on a little bit more solid footing now than we were this time a year ago. And from an agent count perspective – U.S. agent count performance perspective in Q4 of '18, it was just pretty tough. As Nick and Adam have mentioned, we’ve seen some positive traction here in October. Contrast that to October of last year where we were down hundreds of agents. And so I think it should be some easier comps, very early days still and so kind of looking for maybe along the historical trends of slight degradation in agent count, but not as bad as what we saw in Q4 of '18.

Got it. That’s very helpful, Karri. And then one more, maybe Karri or Ward, apologies if I missed this. But on the Motto side of things, can you frame what the contribution to revenue has been year-to-date in 2019? And then secondarily with I think the recent press release said 150 have been sold versus the 100 open. So what’s kind of the timeline for the actual kind of revenue contribution to flow in from the Motto franchises that have been more recently sold? Is that still a function of kind of discounted fees initially and then get onboard a bit later, just any update there would be helpful? Thank you.

Yes. So the runway for those offices that are being sold, we’re still looking at about a 12-month period of ramp up before they’re paying the full complement of monthly fees and kind of still looking kind of in that mid-single digits of revenue contributions on an annualized basis.

Got it. Thank you.

Next question comes from John Campbell with Stephens.

Hi, guys. Good morning.

Good morning, John.

Good morning.

Good morning. So congrats on the launch of booj. I know that’s exciting for you guys. We’re anxious to see how the impact kind of plays out there. But I don’t know if the launch helped drive some of the better agent kind of growth translate in the quarter. It sounds like that could have played maybe a minor role. But maybe, first, if you could comment on that? And then staying on booj and you guys talked to it kind of being geared towards agent productivity and better customer experience, but over the next few quarters how do you guys define success around that? Like what are your KPIs you’ve kind of established around that.

John, it’s Adam. First of all, obviously, the best gauge of success initially with the technology launch is adoption rate. So the booj platform was centered around the CRM and we look at a couple of things. One is how many people have signed up for it, how many people log into it and then how many people are actually utilizing it and putting their contacts in there and what’s that volume of contact placement that we’re seeing as well as the frequency log in, things of that nature. But ultimately the cool part about this having been through these different technology launches in our space before that we’ve done a few years ago, this one we find to be incredibly powerful. We’re very excited about it because the sentiment that we’re seeing in the pickup rate, the adoption, the conversation and the sentiment going on about this, we have a lot of raving fans now. We’ve trained hundreds of trainers, brokers, agents here at headquarters that impact tens of thousands of agents and we’re seeing a very good adoption rate, in fact above what we expected really. So that in and of itself has a deep psychological impact on somebody in an entrepreneurial environment and sales, frankly, when you can really attach yourself to a lever to grow your business. So really this is an efficiency play for the agents and brokers in order for them to really leverage our business and spend more time with their customers and more effective time with their customers through the communication, through transparency, through clarity and really has a great deal of impact on our relationship with them and the retention that provides us and our network. So, obviously, retention leads to a lever in agent growth because we’re losing less, we’re keeping more and thus we can gain more effectively. So, overall, this whole thing has been a great success for us. We’re very excited about it. The interesting part is you see when somebody has a question about something and they hop online and ask a question, a lot of times our agents and our brokers will answer the question before we answer that question. So it’s kind of a leeway of a great deal or bad we can see out there for it as well and I just haven’t seen this in the past in a real estate technology launch. So I’ll pass it to Nick and let him kind of fill in any gaps that he may see as far as future leverage of this platform. But I see this as being a continued win through the future.

Agree. Customer experience, that’s the focus of it. You hear all the time end-to-end platforms are integrated. We’re focusing on the customer experience, because quite honestly when you look at surveys in the industry and buyers and sellers, after they buy or sell a house, some of you on the call may have personally dealt with this and you say would you like to go through it again. And a lot of consumers say no. And this is where we can take technology and leverage it for the consumers which helps empower the agent. The better that the agent sits, the more productivity the more agents at the offices have. And then the second piece when we talk about productivity, we’re early stages in launch. Getting people on it is step one. Then getting them involved with their contact and some of the pieces that we have planned create a world in which we have seen in a period of seven years online leads go from approximately 4.5 million to last year being 89 million. The space of leads is overwhelming agents. And we need this product then to take that very full funnel and spit out and help drive agents to who they should be focusing on to buy and sell. So we’re taking the landscape of what the industry’s doing with leads, getting as many people on it as possible but then also the next step is more to come on how we use it to drive business to the agents that they might be missing because there are so many leads flying around in their world.

That makes sense. Thanks for all that color. And then, Adam, this is a bit of a more high-level question, maybe a somewhat loaded question. But I just want to get your view on this. Clearly, there’s a lot of industry chatter around pocket listings and some attempts to maybe snuff them out. Where do you stand – where does RE/MAX stand kind of on pocket listings going forward?

It’s a great question and you look at the chatter in the industry and it’s interesting because you have different MLSs with different rules and you have different companies trying different things. Ultimately, we’re focused on transparency in our space. We think that the consumer needs to know what’s going on with their product. And a good high-quality agent like a RE/MAX agent is transparent upfront with, okay, here are the options for us to maximize the value of your investment here when it comes to the listing or when it comes to a buyer explain where the listing came from and why this is a good opportunity for us to go take a look at it. So I think the MLSs are very fragmented. Fundamentally that’s the foundation for a lot of issue is we need some consistency in how a consumer see this, because you could hop online as a consumer and read an article and go, oh, I see these pocket listings going on in this other MLS, but I can’t do this over here. Why not? And it’s confusing to the consumer. It allows this unknown to occur within this large financial transaction for the consumer and we’re not for that. We’re for the consumer to have full knowledge of what’s occurring there. It’s not a binary response from us. It’s not a yes or no. On these, it’s a, hey, let’s get our act together in the industry. Let’s become consistent with our rules and our regulations and act in the best interest of the consumer with transparency. So that’s been – our stated position on it is consumers’ transparency first through consistency in the rules and regulations in the MLSs.

Okay, good deal. Thanks, guys.

Next question comes from Bose George with KBW.

Hi, guys. This is Tommy on for Bose. Karri, I just want to make sure I heard you correctly. The 2020 comps that you gave, those figures – that was strictly relating to the booj legacy client runoff? Is that right?

That’s correct. The 3 million and then there's some incremental legal cost as well of about an incremental 1.5 million.

Okay, got it. And then you guys mentioned the possibility of bolt-on acquisitions related to booj. Are those intended to produce potentially more premium offerings that could potentially be monetized with agents that are willing to pay for those?

Hi, Tommy. Yes, the answer – short answer is yes. We've built out the platform. We're creating an app store around that that has an offering of some additional monetized product and that's the direction where that whole thing is going.

Do you have any examples in mind?

Not at this time. We're always looking in the marketplace, but we don't have anything specific to point out at this time.

Okay. And then lastly, we've seen some competitors announcing various partnerships in the industry. Is that something that RE/MAX is exploring kind of those similar types of partnerships?

We’re always looking for different partnerships that are beneficial to our partner brokers, the agents and the consumer. Obviously, we haven't rolled any out in recent times but we're always exploring. We have a lot of great friends in the industry in these different businesses and we continue to have conversation with them.

Okay. Thanks, guys.

[Operator Instructions]. And we have a question from Stephen Sheldon with William Blair.

Hi. Good morning. Can you provide a high-level update on the timing of the booj rollout with one additional capability, including the consumer-facing portions of the platform; and then, two, kind of geographic availability?

Hi, Stephen. So throughout the fall we've been launching the CRM to the company-owned regions which we wanted to get everybody involved with utilizing the platform, logging in, working with their customer base in there and really kind of loading up their contacts in the CRM, beginning to manage any deals that they haven’t processed and marketing that they have within that platform. So we're already deep into that in the company-owned regions which is roughly two-thirds of the U.S. We just announced in Canada the other day that we're going to be going to beta in Western Canada for them to begin testing the product that the U.S. is using. And we continue to roll out consumer-facing portions of this through the next, we'll call it, two to three months, if you will, that really integrates deeper the consumer into that process utilizing this specific set of technology.

Okay, that's helpful. And then it sounds like you're focusing heavily on training, et cetera, to drive adoption and utilization of booj which makes a lot of sense. How much more do you need to do in that area? And would you expect the training expenses related to this to ramp up as we look out over the next year or so?

All hands on deck on training, yes, and we're looking at various options of in-person using staffs that we currently have. And we're also looking at how we can deliver it virtually. We know that in – likely in the first half of next year, we will invest in both of those areas, in person and digital and get the vast majority of the initial training to drive the initial adoption done in the first half. And then as we do that, we'll be looking through efficiencies of training via an LMS system, via virtually. There are a number of ways that we'll be able to deliver ongoing training and personalized training as features continue to develop and roll out.

Great. Thank you.

At this time, I will turn the call over to the presenters.

Thanks, Sharon. Thanks to everyone for joining us on the call today. That concludes the call. Have a great weekend.

This concludes today’s conference call. Thank you for participating. You may now disconnect.