When is the Company Development Fee paid by the Exit franchisee to Exit?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
enue is $2,500.00 or less.
e) Payment
EXIT Formula (U.S. Version Rev. 03.23.25)
Regional Development Fees are payable by Franchise to EXIT. Regional Development Fees are payable at the finalization of the Transaction Side and are deducted from the Sales Representative's portion of Commission.
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The maximum Regional Development Fees paid per calendar year per Sales Representative is $500 (pro-rated in the first calendar year).
8. Company Development Fee
- a) Franchise shall pay EXIT a Company Development Fee of ten percent (10%) of the first $100,000 of gross Commissions per calendar year earned and received by the Franchise for transactions generated by each Sales Representative, including the Broker and
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the Company Development Fee is paid by the franchisee to Exit at the finalization of each transaction side via electronic funds transfer. This fee is equivalent to 10% of the first $100,000 of gross commissions earned per calendar year by the franchisee for transactions generated by each sales representative, including the broker and franchisee. The maximum Company Development Fee per calendar year per sales representative is $10,000, which is pro-rated in the first calendar year.
This means that as an Exit franchisee, you'll need to ensure that the Company Development Fee is transferred to Exit each time a transaction closes. This fee is a percentage of the commissions earned by your sales representatives, so it's directly tied to their productivity. It is important to note that commissions of $250.00 or less are not subject to Company Development Fees.
The electronic funds transfer requirement means franchisees must have systems in place to track and remit these fees promptly. The fact that all Company Development Fees are deposited into a designated trust account by Exit upon receipt provides some assurance that these funds are managed responsibly. This structure is fairly typical in franchising, where franchisors collect fees to support the overall brand and system.
The pro-rated aspect for the first calendar year suggests that Exit understands it may take time for a new franchise to ramp up its sales. The maximum fee of $10,000 per sales representative provides a cap on the amount Exit can collect, which could be beneficial for high-performing sales representatives.