What is considered 'high density' for an Exit Realty Upper Midwest franchise regarding population?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement grants you the right to establish a real estate sales office in a specified geographic territory ("Protected Territory") that is described by boundary streets, highways, cities, counties, or other recognizable demarcations and can be further delineated by a map attached as a part of the Franchise Agreement. You are granted the exclusive right to establish an EXIT realty office within the Protected Territory. You are not restricted from selling real estate services outside your Protected Territory. There is no minimum Protected Territory granted, although the Protected Territory is generally as follows: High density – over 50,000 population; Medium density – 20,000-50,000 population and Rural density – less than 5,000 population. You receive exclusivity for the location of your office. You will not receive an exclusive Territory for EXIT listings and/or sales. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a high-density territory for an Exit Realty Upper Midwest franchise is defined as having a population exceeding 50,000 people. This population density is a factor in determining the initial franchise fee, which is $25,000 for high-density territories. The population calculation also includes seasonal residents.
This definition of territory density has practical implications for prospective franchisees. The higher the population density of the protected territory, the larger the potential customer base but also the higher the initial investment. Additionally, the required office space increases with population density; for a high-density territory, a minimum of 2,000 square feet is required. This larger space requirement will also impact rental costs, which Exit estimates can range from $36,000 to $60,000 annually for a larger office.
It is important to note that while Exit grants an exclusive territory for the location of the franchisee's office, it does not provide an exclusive territory for Exit listings or sales. Franchisees may face competition from other franchisees, company-owned outlets, or other distribution channels, even within their protected territory. Therefore, a franchisee needs to carefully evaluate the competitive landscape and market conditions within their potential territory, even if it meets the population requirements for high, medium, or rural density.