Can Exit deduct indebtedness owed to them from commissions payable to Sales Representatives?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- c) Deduction of Fees and Charges. Sales Representative irrevocably directs EXIT [Trade Name] to deduct from any commissions payable to Sales Representative, the amount of any indebtedness owed to EXIT [Trade Name] or EXIT, as outlined in this Agreement and the EXIT Formula.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Exit has the right to deduct any debts owed to them from the commissions payable to their Sales Representatives. Specifically, Sales Representatives give Exit irrevocable direction to deduct these amounts. This covers any indebtedness outlined in the agreement and the EXIT Formula.
This means that if a Sales Representative owes Exit money for any reason, Exit can legally withhold that amount from their commission payments. This could include expenses for optional services and materials that the Sales Representative uses, such as long-distance telephone services, internet, copying, advertising brochures, personalized stationery, postage, yard signs, or rental equipment. Exit will provide a statement of these expenses, which the Sales Representative is expected to pay immediately.
This policy protects Exit by ensuring they can recover any outstanding debts from their Sales Representatives. For a prospective Sales Representative, it's crucial to understand what constitutes 'indebtedness' and to keep track of any expenses incurred that could be deducted from their commissions. It would be prudent to clarify with Exit exactly what charges can be levied against commissions and to ensure all expense statements are promptly addressed to avoid any surprises in commission payouts.