As a condition of transfer, does Exit Realty Upper Midwest require the new franchisee to qualify?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| l. EXIT Realty Upper Midwest’s approval of transfer by Franchisee | 18 | EXIT Realty Upper Midwest has the right to approve all transfers but will not unreasonably withhold approval. |
|---|---|---|
| m. Conditions for EXIT Realty Upper Midwest approval of transfer | 18 | New Franchisee qualifies, transfer fee (10% of the then current initial franchise fee, not to exceed 25% of the Initial Franchise fee paid) paid, purchase agreement approved, training arranged, Assignment signed and current Franchise Agreement signed by new Franchisor or Franchisee (also see the non-competition section below). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 27–31)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a franchisee wants to transfer their franchise, Exit Realty Upper Midwest approval is required. While Exit Realty Upper Midwest has the right to approve all transfers, they will not unreasonably withhold approval.
To gain approval for the transfer, the new franchisee must meet certain qualifications. The specific requirements include the new franchisee qualifying, payment of a transfer fee (which is 10% of the current initial franchise fee, but will not exceed 25% of the initial franchise fee originally paid), an approved purchase agreement, arrangement of training for the new franchisee, and the signing of an assignment and a current Franchise Agreement by the new franchisor or franchisee.
These conditions ensure that any new franchisee taking over an existing Exit franchise is properly vetted and prepared to maintain the standards of the franchise system. The transfer fee compensates Exit for the administrative costs associated with the transfer and the need to evaluate and approve the new franchisee. The training requirement ensures the new franchisee is competent to operate the Exit franchise.