Is an Exit franchisee prohibited from soliciting sales representatives of other Exit franchisees after termination?
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 EXIT franchisee to stop serving as an agent for that party;
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee is restricted from soliciting or inducing sales representatives of other Exit franchisees to discontinue their affiliation. Specifically, after termination or expiration of the franchise agreement, the franchisee cannot solicit or induce any person who is, at the time of termination or expiration, retained as 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 at Exit's discretion.
This restriction is designed to protect the relationships between Exit franchisees and their sales representatives, preventing former franchisees from poaching talent and disrupting ongoing business operations within the Exit system. This clause remains in effect immediately after termination or non-renewal of the agreement.
However, Exit affiliates are allowed to solicit the franchisee's sales representatives for transfer to other operating Exit offices during the ten-day period prior to termination or non-renewal of the agreement, immediately upon the termination or non-renewal becoming effective, and continuing thereafter. The franchisee is required to assist in these transfers, facilitating the assignment of the sales representatives' listings and pending transactions to the Exit affiliate as the sales representative's new broker. This appears to create a period where the franchisee is restricted from soliciting sales representatives from other franchisees, but other Exit affiliates are allowed to solicit the franchisee's own sales representatives.