What factors determine the Initial Fee for an Exit Realty Upper Midwest franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
red to be disclosed in this ITEM.
ITEM 5 INITIAL FEES
When you sign the Franchise Agreement, you must pay EXIT Realty Upper Midwest an Initial Fee that ranges from Seven Thousand Five Hundred Dollars ($7,500) to Twenty-Five Thousand Dollars ($25,000), depending on the geographical size and population (including seasonal residents) of the Protected Territory provided to you with the Franchise Agreement. The Initial Fee for a Franchise Agreement is determined according to the following formula:
- (a) Population in excess of 50,000 persons Fee of $25,000 (high density);
- (b) Population between 15,000 and 50,000 persons if the Protected Territory is more than 2 miles from an area with a population of more than 50,000 – Fee of $15,000 (medium density);
- (c) Population of less than 15,000 persons if the Protected Territory is more than 2 miles from an area with a population of more than 5,000 persons – Fee of $7,500 (rural density).
EXIT Realty Upper Midwest retains 75% of the Initial Fee paid for a Franchise Agreement. EXIT is paid the remaining 25% of the Initial Fee.
The Initial Fee for a Franchise Agreement will be uniformly imposed on all Franchisees
Source: Item 5 — INITIAL FEES (FDD page 12)
What This Means (2025 FDD)
According to Exit Realty Upper Midwest's 2025 Franchise Disclosure Document, the initial franchise fee ranges from $7,500 to $25,000. The fee is determined by the geographical size and population density of the protected territory granted to the franchisee.
The FDD outlines a formula that Exit uses to calculate the initial fee. A territory with a population exceeding 50,000 is considered high density and carries a $25,000 fee. A medium-density territory, defined as having a population between 15,000 and 50,000 and located more than two miles from an area with over 50,000 residents, has a $15,000 fee. Rural territories, with populations less than 15,000 and located more than two miles from an area with over 5,000 residents, have the lowest fee of $7,500.
It's important to note that Exit Realty Upper Midwest retains 75% of the initial fee, while Exit receives the remaining 25%. The initial fee is uniformly imposed on all franchisees and is non-refundable. This means that regardless of whether the franchisee's business succeeds or if the agreement is terminated early, the initial fee will not be returned.