Can the Broker's Council establish membership fees and other charges for Exit franchisees?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall join, maintain membership at its own expense, and actively participate in a Brokers' Council, as established by Subfranchisor. This Broker's Council will meet on a regular basis, as determined by Subfranchisor. The geographical area and meeting location of each Broker's Council may change, from time to time, based on the establishment of franchises throughout the State. Notifications of these meetings will be sent, in advance, to each Franchise. Franchisee shall abide by all rules and regulations as may be established by the Broker's Council,
including any decision reached in accordance with the rules and regulations of the Broker's Council directed to EXIT franchisees. The Broker's Council may establish membership fees and other charges in order to be an active participant in the Broker's Council. The establishment of rules, procedures and membership fees and charges shall be determined by at least 2/3 of the Franchisee members and shall not be calculated on a per transaction basis. Representation in the Broker's Council will be limited to two (2) participants at regular meetings. Each Franchise, in good standing, shall have one (1) vote with respect to decisions considered by the Broker's Council.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees are required to join and actively participate in a Broker's Council established by the subfranchisor, bearing all associated expenses. This council convenes regularly as determined by the subfranchisor, with meeting locations potentially changing based on franchise establishment within the state. Franchisees receive advance notifications of these meetings and must adhere to all rules and regulations set forth by the Broker's Council.
The Broker's Council has the authority to establish membership fees and other charges for active participation. However, these fees and charges cannot be determined on a per-transaction basis. The establishment of these rules, procedures, and fees requires approval from at least two-thirds of the franchisee members.
Representation in the Broker's Council is limited to two participants at regular meetings, with each franchise in good standing holding one vote on decisions. This structure ensures that franchisees have a direct say in the financial and operational aspects of the council, preventing arbitrary or unfair fee structures.