What is the basis for determining the number of Sales Representatives to be maintained by an Exit franchisee?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement. Your exclusive rights to a Protected Territory may be terminated or modified by EXIT Realty Upper Midwest if you fail to comply with the terms and conditions of the Franchise Agreement. In addition, the exclusive area rights will terminate, and you will be in default under your Franchise Agreement and your Franchise Agreement may be terminated, if you fail to attain and retain the prescribed number of Sales Representatives within the designated period of time. There are no other circumstances that permit EXIT Realty Upper Midwest to modify your territorial rights. The number of Sales Representatives to be maintained is based on the active Realtor® population in the geographic territory that includes the Protected Territory and based upon market conditions and area competition. There is no formula to determine the minimum number of Sales Representatives to be maintained in a Protected Territory. Once the location of the Protected Territory is determined and EXIT Realty Upper Midwest analyzes the active Realtor® population, market conditions and area competition in and around the Protected Territory, the minimum number of Sales Representatives is determined by EXIT Realty Upper Midwest and provided to you not less than 7 calendar days prior to your execution of the Franchise Agreement. See Section 9.8 of the Franchise Agreement. Subject to the foregoing Requirements for minimum number of Sales Representatives are as follows:
| Territory Size | Minimum # of Sales Representatives After 1st Year | Minimum # of Sales Representatives After 2nd Year | Minimum # of Sales Representatives After 3rd Year and Thereafter |
|---|---|---|---|
| Rural Density Territory | 3 | 5 | 7 |
| Low Density Territory | 5 | 7 | 10 |
| Medium | 6 | 12 | 20 |
| Density Territory | |||
| High Density Territory | 10 | 20 | 30 |
Source: Item 12 — TERRITORY (FDD pages 24–25)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the number of Sales Representatives an Exit franchisee must maintain is based on the active Realtor® population within the franchisee's geographic territory, as well as market conditions and area competition. Exit Realty Upper Midwest analyzes these factors to determine the minimum number of Sales Representatives required. This number is provided to the franchisee at least 7 calendar days before the Franchise Agreement is executed.
The specific minimum number of sales representatives also depends on the territory size. For a Rural Density Territory, the minimum number of sales representatives is 3 after the 1st year, 5 after the 2nd year, and 7 after the 3rd year and thereafter. For a Low Density Territory, the minimum number of sales representatives is 5 after the 1st year, 7 after the 2nd year, and 10 after the 3rd year and thereafter. For a Medium Density Territory, the minimum number of sales representatives is 6 after the 1st year, 12 after the 2nd year, and 20 after the 3rd year and thereafter. For a High Density Territory, the minimum number of sales representatives is 10 after the 1st year, 20 after the 2nd year, and 30 after the 3rd year and thereafter.
It is important to note that failure to attain and retain the prescribed number of Sales Representatives within the designated time can result in termination or modification of the franchisee's exclusive rights to their Protected Territory and may lead to default under the Franchise Agreement. There is no specific formula provided to determine the minimum number of Sales Representatives, as it depends on the analysis conducted by Exit Realty Upper Midwest based on the factors mentioned above.
Prospective franchisees should carefully consider the Realtor® population, market conditions, and competition in their desired territory to understand the potential challenges in meeting the minimum Sales Representative requirements. They should also discuss with Exit Realty Upper Midwest how the minimum number of Sales Representatives is determined for their specific territory and what support is provided to help franchisees meet these requirements.