How are commissions computed for Exit franchisees?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenue from commissions and transaction fees is recognized in the period in which the franchisee earns the revenue upon which this fee is based and collectability from the customer is reasonably assured. Commissions are computed as a percentage of net sales earned by the franchisee. Transaction fees are flat fees for each transaction, the rates of which vary based on the amount of revenue generated by the franchisee.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, commissions are calculated as a percentage of the net sales earned by the franchisee. The revenue from these commissions is recognized during the period the franchisee earns the revenue, provided that collectability from the customer is reasonably assured.
This means that an Exit franchisee's earnings are directly tied to their sales performance. The commission structure incentivizes franchisees to maximize their sales, as their income grows proportionally with their net sales. This is a common practice in franchise systems, particularly in real estate, where individual performance heavily influences revenue.
In addition to commissions, Exit franchisees may also encounter transaction fees. These are flat fees applied to each transaction, and the rates can vary depending on the amount of revenue generated by the franchisee. Therefore, franchisees need to understand both the commission percentage and the applicable transaction fee structure to accurately forecast their potential earnings.