What is the Exit franchisee's obligation regarding the quality of the sales force they hire?
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).
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Exit franchisees are expected to develop a high-quality sales force. While franchisees have control over hiring decisions, they are encouraged to make every effort to hire sales representatives who will assist the public in buying and selling real estate ethically and professionally. The "Sponsoring" process, which involves introducing new recruits to the Exit system, is specifically designed to help franchisees attract this type of high-quality workforce.
To further ensure quality, all non-licensed individuals under contract with a franchisee, subfranchisor, or Exit must virtually attend and successfully complete Exit's E-Boss online training course before they can participate in Exit's Sponsoring program. This requirement aims to provide a baseline level of training and understanding of the Exit system for those new to the real estate business.
Additionally, franchisees must maintain a written Sales Representative Agreement with each sales representative, using a form approved by the subfranchisor or Exit. Franchisees must also provide the subfranchisor and franchisor with the version of the Sales Representative Agreement they are using. Franchisees are also obligated to promptly and accurately report and enter all Exit Associates into Exit's proprietary software program, MEMO, and ensure the Exit Associate roster is up to date regularly. Reporting must 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.