What was the change in notes receivable for Exit in 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company grants development rights to sub-franchisors within specific geographic regions. These sub-franchisors locate and secure franchisees that will open and operation EXIT Realty offices. Notes receivable represent balances due on the sale of Canadian and U.S. regions from sub-franchisors. The notes bear interest between 3.00% and 10.00%, mature between 2024 and 2033, and are secured by performance contracts in the franchisor agreements.
Regions reacquired for nonperformance amounted to $2,369,911 for the years ended December 31, 2023 and Interest income on these notes totaled $397,640 for the year ended December 31, 2023
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
Based on Exit's 2025 Franchise Disclosure Document, the company grants development rights to sub-franchisors within specific geographic regions. These sub-franchisors then locate and secure franchisees that will open and operate Exit Realty offices. Notes receivable represent balances due on the sale of Canadian and U.S. regions from sub-franchisors. These notes bear interest, mature at various dates, and are secured by performance contracts in the franchisor agreements.
The FDD mentions that regions reacquired for nonperformance amounted to $2,369,911 for the year ended December 31, 2023. Interest income on these notes totaled $397,640 for the year ended December 31, 2023.
However, the 2025 FDD does not provide a specific beginning and ending balance for notes receivable in 2023, nor does it detail the exact changes or transactions that affected the notes receivable balance during that year. A prospective franchisee should request a complete financial statement, including the beginning and ending balances for notes receivable, to fully understand the changes during the year.