As a condition of transfer, does Exit Realty Upper Midwest require training to be arranged?
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 seeks to transfer their franchise, Exit Realty Upper Midwest requires that training be arranged for the new franchisee as part of the approval process. Other conditions for approval include ensuring the new franchisee meets Exit's qualifications, payment of a transfer fee, approval of the purchase agreement, and the signing of both an Assignment and a current Franchise Agreement by the new franchisor or franchisee. The transfer fee is calculated as 10% of the then-current initial franchise fee, but it cannot exceed 25% of the initial franchise fee originally paid.
This requirement ensures that any new franchisee taking over an existing Exit franchise is properly trained and equipped to operate the business according to Exit's standards. By mandating training, Exit aims to maintain consistency and quality across its franchise network, which can protect the brand's reputation and ensure customer satisfaction. This is a fairly standard practice in franchising, as franchisors typically want to ensure that new operators are capable of running the business effectively.
Prospective franchisees should carefully consider these transfer conditions, as they will need to ensure that any potential buyer is willing to undergo the required training and meets all other qualifications set by Exit Realty Upper Midwest. Additionally, the transfer fee could represent a significant cost, impacting the financial aspects of selling the franchise. Understanding these requirements is crucial for franchisees planning their exit strategy and for potential buyers evaluating the investment.