Does the Exit Franchise Agreement include a schedule that describes the protected territory?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
ent and agrees to immediately notify Subfranchisor of any changes in the information through the term of this Agreement.
2. GRANT OF FRANCHISE
2.1. Grant of Franchise.
Subfranchisor grants to Franchisee, and Franchisee accepts, the right to use the federally registered service mark "EXIT" and such other Proprietary Marks (as defined in Section 43 of this Agreement) as Subfranchisor may designate from time to time for the purpose of operating a real estate brokerage/real estate service office within the specific geographic area (the "Protected Territory") outlined in the Description of Protected Territory (Schedule 3 of this Agreement) during the term of this Agreement, upon the terms and conditions of this Agreement and in accordance with guidelines established by Subfranchisor and EXIT (the "Franchise").
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the Franchise Agreement includes a schedule that outlines the protected territory granted to the franchisee. Section 2.1 of the agreement states that the subfranchisor grants the franchisee the right to operate a real estate brokerage office within a specific geographic area, referred to as the "Protected Territory." This territory is detailed in Schedule 3 of the agreement, titled "Description of Protected Territory."
This protected territory grants a degree of exclusivity to the franchisee. As long as the franchisee adheres to the terms of the agreement, neither Exit nor the subfranchisor can establish another real estate service franchise or an Exit-owned real estate service office within the franchisee's protected territory. However, this exclusivity can be revoked if the franchisee defaults on the agreement and fails to correct the issue in a timely manner. In such cases, the agreement becomes non-exclusive, and the subfranchisor reserves the right to operate or sell franchises within the previously protected territory.
It is important to note that while a franchisee has a protected territory, they are not restricted from listing or selling properties or representing clients outside of this area. Similarly, other Exit franchisees are allowed to list and sell property or represent clients who reside within the protected territory of another franchisee. To maintain the protected status of their territory, the franchisee must comply with all terms of the agreement, particularly those related to maintaining a minimum number of affiliated associate brokers and sales representatives who hold valid real estate licenses in the state where the protected territory is located.
Schedule 3 is not the only relevant schedule. Schedule 1 contains Franchisee information, Schedule 2 describes the Exit Formula, Schedule 4 contains the Guaranty and Agreement to be bound by the terms and conditions of the Franchise Agreement, and Schedule 5 contains the Associate Profile.