Where can I find information about Exit's Commission Payments and Tax Compliance?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPT]
All payments of referral fees and shares of commission, shall be in compliance with applicable law, shall be made by EXIT [Trade Name], and all monies withheld for that purpose shall be withheld from commissions received by EXIT [Trade Name].
Sales Representative acknowledges that as an independent contractor (non-employee) affiliated with EXIT [Trade Name], Sales Representative is responsible for the payment of all Sales Representative's own federal income taxes and self-employment taxes (FICA) together with any and all corresponding state, county and local taxes, if any, and Sales Representative agrees to meet those responsibilities. Sales Representative waives any claims Sales Representative has or may have against EXIT [Trade Name] now or in the future related to taxes or the right of EXIT [Trade Name] not to withhold, pay or contribute to taxes on behalf of Sales Representative.
All fees and commissions earned in connection with the sale, lease or rental of real estate and any interest in or service related to real estate are made payable to EXIT [Trade Name].
Franchisee shall accurately report to Subfranchisor and EXIT, all transactions upon which Franchisee or its agents or sales representatives receive commission, including, by way of example and not limitation, rentals, leases and sales of land, commercial buildings, residential units, condominiums and mobile homes, and shall timely remit and pay transaction fees and other continuing fees due with respect to each transaction. Franchisee shall ensure that all sales representatives accurately report all such transactions to Franchisee and that all sales representatives who perform services with or through joint sales and marketing groups, or "teams," accurately report such activity, participation and their transactions in MEMO. Franchisee, or if Franchisee is an entity, all equity holders of Franchisee, must also ensure that all their transactions are accurately reported in MEMO and that all applicable fees, including but not limited to Company Development Fees, are paid.
The payment details entered into the MEMO system must agree with the payment details that are reported to government tax agencies.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Item 23 covers aspects of commission payments and tax compliance for sales representatives. Specifically, Exit ensures that all payments of referral fees and commission shares comply with applicable laws and are made by Exit. Monies withheld for these purposes are deducted from the commissions received by Exit.
The FDD also clarifies that sales representatives, as independent contractors, are responsible for paying their own federal income taxes, self-employment taxes (FICA), and any corresponding state, county, and local taxes. Sales representatives waive any claims against Exit related to taxes or the right of Exit not to withhold, pay, or contribute to taxes on their behalf. All fees and commissions earned from real estate transactions are payable to Exit, which may then be shared with other sales representatives under contract with Exit or with cooperating real estate sales representatives or brokers not associated with Exit, provided Exit is notified in writing of the terms.
Furthermore, the FDD states that Exit's franchisees must accurately report all transactions upon which they or their agents/sales representatives receive a commission. This includes rentals, leases, and sales of various types of properties. Franchisees are responsible for remitting transaction fees and other continuing fees due with respect to each transaction. The payment details entered into Exit's proprietary software program (MEMO) must align with the payment details reported to government tax agencies. This ensures transparency and compliance with tax regulations within the Exit system.