What must an Exit franchisee allow other Exit Affiliates to do regarding its Sales Representatives after termination?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall allow other EXIT Affiliates to solicit Franchisee's Sales Representative for transfer to other operating EXIT offices.
During the ten (10)-day period prior to termination or non-renewal of this Agreement, immediately upon the termination or non-renewal becoming effective and continuing thereafter, Franchisee shall allow other EXIT affiliates to solicit Franchisee's Sales Representatives for transfer to other operating EXIT offices.
Franchisee shall assist in effectuating such transfers and shall permit and facilitate the assignment of the Sales Representatives' listings and pending transactions to the EXIT Affiliate as the Sales Representative's new broker.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee must allow other Exit affiliates to solicit its Sales Representatives for transfer to other operating Exit offices both during the ten days before termination or non-renewal of the agreement, immediately upon the termination or non-renewal becoming effective, and continuing thereafter.
This requirement means that an Exit franchisee losing their franchise must actively cooperate in the transfer of their sales team to other Exit locations. The franchisee must assist in making these transfers happen and facilitate the assignment of the Sales Representatives' listings and pending transactions to the Exit affiliate that becomes the Sales Representative's new broker.
This obligation could significantly impact a former franchisee's ability to continue in the real estate business independently, as their sales team, client listings, and pending deals could be absorbed by other Exit offices. This provision ensures the continuity of the Exit brand and network, but it places a considerable burden on the departing franchisee. Prospective franchisees should consider the implications of this requirement, especially if they plan to remain in the real estate industry after their franchise agreement ends.