What is considered 'rural 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.
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a 'rural density' territory is defined as having a population of less than 5,000 people. This population density affects several aspects of the franchise, most notably the initial franchise fee.
The initial franchise fee for an Exit franchise varies based on the population density of the protected territory. For a rural density territory, the initial fee is $7,500, which is the lowest initial fee. In contrast, higher density territories require significantly larger initial fees, up to $25,000 for areas with populations exceeding 50,000. This tiered fee structure allows franchisees to enter markets with lower population densities at a reduced initial investment.
Furthermore, the required office space also differs based on the density of the territory. For a rural density territory, a minimum of 750 square feet is required. This is less than the square footage required for low, medium, and high-density territories, which require 1,000, 1,500, and 2,000 square feet, respectively. This reduced space requirement can lead to lower rental costs for franchisees in rural areas. However, the number of sales representatives required under the Franchise Agreement is based on the active Realtor® population in the geographic territory.