What were Exit's accumulated stockholders' deficits as of December 31, 2024, 2023, and 2022?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
s payable Less: current portion Non-current portion 41,553 1,592,382 (149,748) $ 1,442,634 41,553 1,696,522 (87,060) $ 1,609,462 41,553 2,719,271 (326,323) $ 2,392,948
Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest 20 Notes to Financial Statements (continued) December 31, 2024, 2023, and 2022
NOTE 3 – NOTES PAYABLE (continued)
Future maturities of notes payable are as follows:
| For the Years Ending December 31 | Amount |
|---|---|
| 2025 | $ 149,748 |
| 2026 | 143,672 |
| 2027 | 148,082 |
| 2028 | 163,446 |
| 2029 | 190,422 |
| Thereafte |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the company has sustained net losses and negative working capital, resulting in accumulated stockholders' deficits. As of December 31, 2024, the accumulated stockholders' deficit was $933,970. For the year ending December 31, 2023, the deficit was $827,221, and as of December 31, 2022, the deficit totaled $758,031. These figures reflect the cumulative losses of the company over these periods, reducing the total equity available to stockholders.
These deficits are significant for prospective franchisees because they provide insight into Exit's financial stability and historical performance. While a deficit does not automatically indicate failure, it suggests that the company has faced challenges in generating profits and managing its finances. The FDD notes that these deficits should be considered in the context of broader market conditions, strategic initiatives, and operational challenges. This implies that Exit may have strategies in place to address these deficits and improve its financial health.
It is important for potential franchisees to investigate the reasons behind these accumulated deficits. Understanding the factors that contributed to these losses can help franchisees assess the risk associated with investing in an Exit franchise. Additionally, prospective franchisees should inquire about Exit's plans to improve its financial performance and whether these plans are likely to succeed. Consulting with a financial advisor is recommended to fully understand the implications of these deficits and to evaluate the overall financial viability of the franchise opportunity.
While the FDD provides the unadjusted stockholders' deficit, it also mentions that these figures can be adjusted for earnings before interest, taxes, depreciation, and amortization (EBITDA) to provide a clearer picture of operational performance. However, the FDD excerpt only provides the adjusted figures for Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest, not for Exit Realty Corp. International. Prospective franchisees may want to request the EBITDA-adjusted figures for Exit Realty Corp. International to gain a more comprehensive understanding of the company's financial health.