What is the Exit franchisee's obligation regarding the hiring of sales representatives?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
y Franchise to EXIT at the finalization of each Transaction Side via electronic funds transfer. All Company Development Fees shall be deposited into a designated trust account by EXIT upon receipt.
- c) All Commissions of $250.00 or less, are not subject to Company Development Fees.
9. Sponsoring Bonus
- a) The introduction of a person ("Recruit") to the EXIT System, who is subsequently hired by a Franchise as an EXIT Associate, is a process known as "Sponsoring."
- b) Franchisees control the actual hiring of Sales Representatives. Every effort should be made by Franchisees to develop a high-quality sales force to assist the public in the sale and purchase of real estate in an ethical and business-like manner. The Sponsoring process is intended to assist Franchisees in attracting this type of high-quality work force.
- c) A Sponsoring Bonus is paid to the person or persons responsible for the introduction that results in the recruitment of a new Sales Representative into the EXIT System (the "Sponsor"). Each EXIT Associate is eligible to receive a Sponsoring Bonus for Sponsoring equal to 10% of the gross Commissions generated by the Recruit.
- d) All non-licensed persons under written contract with a Franchisee, a Subfranchisor or EXIT are required to virtually attend and successfully complete EXIT's E-Boss online training course before being eligible to participate in EXIT's Sponsoring program.
- e) The Sponsoring Bonus is paid by EXIT up to a maximum of $10,000 per Recruit per calendar year (pro-rated in the first calendar year), less applicable Sponsoring Bonus Fees (defined in subsection 9.m) below).
- f) It is mandatory that each Sales Representative be sponsored into the EXIT System. Sales Representatives cannot be designated as their own Sponsor nor can two Sales Representatives sponsor each other. The Sponsorship must be acknowledged and verified by each Recruit, in a manner satisfactory to EXIT via EXIT's online "EXIT Associate Profile".
- g) In the event that a Recruit is introduced to the EXIT System by two Sponsors, then the Sponsoring Bonus will be split evenly between the Sponsors. A Recruit cannot be sponsored into the EXIT System by more than two Sponsors.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding the hiring and management of sales representatives. Exit franchisees control the actual hiring of sales representatives and should make every effort to develop a high-quality sales force to assist the public in the sale and purchase of real estate in an ethical and business-like manner. Franchisees must also maintain a written Sales Representative Agreement with each of their sales representatives, using a form approved by Exit or the subfranchisor, and provide a copy of this agreement to both the subfranchisor and franchisor.
Exit uses a system called "Sponsoring" to encourage recruitment, where individuals who introduce a new sales representative to the Exit system can receive a "Sponsoring Bonus" equal to 10% of the gross commissions generated by the recruit, up to a maximum of $10,000 per year. It is mandatory that each sales representative be sponsored into the Exit system, and sales representatives cannot sponsor themselves or each other.
Furthermore, franchisees are required to promptly and accurately report all Exit Associates (including sales representatives) into Exit's proprietary software program, MEMO, and ensure the roster is regularly updated. Reporting should occur when sales representatives are registered in the Multiple Listing Service (MLS) system and when non-licensed persons meet the qualification requirements outlined in the Exit Formula. This ensures that Exit maintains an accurate and up-to-date record of all individuals associated with the franchise.