After the Exit franchise agreement terminates, am I allowed to solicit sales representatives of other Exit franchisees?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
similar manner to the EXIT System; or
- (b) within a ten (10) mile radius of Franchise's office own, operate, lease, franchise, conduct or engage in, be connected with, have any interest in or assist any person or entity engaged in any real estate brokerage business, provided the foregoing shall not apply if this Agreement expired at the end of its term.
- (c) solicit or induce any person who is, at the time of termination or expiration of this Agreement, retained as a sales representative (as the phrase "sales representative is defined in the EXIT Formula attached to this Agreement, which may from time to time be amended at the discretion of EXIT) of any EX
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if your franchise agreement is terminated or expires, you are prohibited from soliciting or inducing any person who is a sales representative of any Exit franchisee to stop serving as an agent for that party. The term "sales representative" is defined in the Exit Formula attached to the agreement, which may be amended from time to time at Exit's discretion. This restriction is in place to protect Exit franchises.
This means that after your Exit franchise agreement ends, you cannot actively try to persuade sales representatives working for other Exit franchisees to leave their current positions and join your new business or another brokerage. This restriction applies regardless of whether the termination was due to expiration, breach, or any other reason.
The Exit FDD states that the covenants are independent and are reasonable and necessary to protect the Subfranchisor and other Exit franchises if the Agreement expires or is terminated for any reason. This non-solicitation clause is designed to prevent former franchisees from unfairly poaching talent from the Exit system, which could harm the existing franchisees and the overall brand.
As a prospective franchisee, it's important to understand the scope and duration of this restriction, as violating it could lead to legal consequences. You should carefully review the Exit Formula and any amendments to fully understand the definition of "sales representative" and the specific activities that are considered solicitation or inducement.