Besides failing to comply with the Franchise Agreement or failing to maintain the required number of sales representatives, are there any other circumstances that permit Exit Realty Upper Midwest to modify an Exit franchisee's territorial rights?
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:
Source: Item 12 — TERRITORY (FDD pages 24–25)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, there are very specific conditions under which Exit Realty Upper Midwest can modify an Exit franchisee's territorial rights. The document explicitly states that the franchisee's exclusive rights to a Protected Territory may be terminated or modified if the franchisee fails to comply with the terms and conditions of the Franchise Agreement. Additionally, the exclusive area rights will terminate if the franchisee fails to attain and retain the prescribed number of Sales Representatives within the designated period.
Beyond these two scenarios—non-compliance with the Franchise Agreement and failure to maintain the required number of sales representatives—the FDD states clearly that there are no other circumstances that permit Exit Realty Upper Midwest to modify a franchisee's territorial rights. This provides a level of assurance to the franchisee that their territory is secure as long as they meet these obligations.
The number of sales representatives that an Exit franchisee must maintain is based on the active Realtor population in the geographic territory, market conditions, and area competition. Exit Realty Upper Midwest analyzes these factors to determine the minimum number of sales representatives required, and this number is provided to the franchisee at least 7 calendar days before the Franchise Agreement is executed. This prior notification is designed to ensure that the franchisee is fully aware of the expectations before committing to the franchise. The specific minimums are laid out in a table based on territory density, with higher density territories requiring more sales representatives.