Who executes the Franchise Agreement for an Exit franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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You may become a Franchisee by entering into a Franchise Agreement with EXIT Realty Upper Midwest, which sets forth your obligations and the obligations of EXIT Realty Upper Midwest. The EXIT Franchise Agreement is attached to this Disclosure Document as Exhibit A-2. EXIT Realty Upper Midwest and you are the only two parties to the Franchise Agreement. The fee structure is outlined in the EXIT Formula (part of the Franchise Agreement).
Every Franchise must possess a bonafide real estate broker's license in good standing under the laws of the state where the Franchise is located. Franchisees are expected to provide first class real estate service to the buying and selling public. The Franchisee has the responsibility to hire and recruit real estate sales representatives and to compete in the real estate brokerage business. The number of sales representatives required under a Franchise Agreement is based on the active Realtor® population in the geographic territory that includes your Protected Territory (see ITEM 12 of this Disclosure Document) and based upon market conditions and competition.
EXIT's agents for service of process are disclosed in Exhibit B of this Disclosure Document.
Source: Item 1 — THE FRANCHISOR AND SUBFRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the Franchise Agreement is executed between EXIT Realty Upper Midwest, acting as the subfranchisor, and the franchisee. This means that as a prospective Exit franchisee, your contractual relationship will be directly with EXIT Realty Upper Midwest, not with EXIT Realty Corp. International, the franchisor.
EXIT Realty Upper Midwest is responsible for providing support and services to franchisees within their assigned geographical territory. As the franchisee, you are obligated to fulfill the terms and conditions outlined in the Franchise Agreement, which includes operating a real estate office using the Exit system and trademarks.
It is important to understand that EXIT Realty Upper Midwest functions as an independent contractor and not as an agent of EXIT. Therefore, franchisees must look to EXIT Realty Upper Midwest for performance under the Franchise Agreement. This distinction is crucial for prospective franchisees to recognize, as it clarifies the specific entity responsible for upholding the franchisor's obligations.