What geographic limit defines the area where an Exit franchisee can operate a real estate brokerage/real estate service office?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
ent and agrees to immediately notify Subfranchisor of any changes in the information through the term of this Agreement.
2. GRANT OF FRANCHISE
2.1. Grant of Franchise.
Subfranchisor grants to Franchisee, and Franchisee accepts, the right to use the federally registered service mark "EXIT" and such other Proprietary Marks (as defined in Section 43 of this Agreement) as Subfranchisor may designate from time to time for the purpose of operating a real estate brokerage/real estate service office within the specific geographic area (the "Protected Territory") outlined in the Description of Protected Territory (Schedule 3 of this Agreement) during the term of this Agreement, upon the terms and conditions of this Agreement and in accordance with guidelines established by Subfranchisor and EXIT (the "Franchise"). This grant is conditioned upon (i) Franchisee obtaining and maintaining a valid real estate broker's license in the state containing the Protected Territory to enable Franchisee to perform the full range of real estate services to be provided under the System, (ii) Franchisee not defaulting under this Agreement, and (iii) this Agreement not being terminated, canceled or abandoned.
2.2. Exclusivity
- (A) So long as Franchisee is not in breach of this Agreement, neither Subfranchisor nor EXIT shall establish another real estate service Franchise or EXIT owned real estate service office within the Protected Territory using the Proprietary Marks.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a franchisee is granted the right to operate a real estate brokerage/real estate service office within a specific geographic area referred to as the "Protected Territory." This territory is outlined in Schedule 3 of the Franchise Agreement, called the "Description of Protected Territory."
The Exit franchisee's ability to maintain the protected status of their territory is conditional. To keep this status, the franchisee must adhere to all terms of the Franchise Agreement, particularly those concerning the maintenance of a minimum number of affiliated associate brokers and sales representatives. These representatives must possess valid real estate licenses for the state where the Protected Territory is located.
However, Exit franchisees are not restricted from listing and selling property or representing clients outside their Protected Territory, provided they comply with any limitations imposed by state licensing authorities. Similarly, other Exit franchisees are allowed to list and sell property or represent clients within the boundaries of another franchisee's Protected Territory. This means that while a franchisee has an exclusive territory for establishing an office, they can still conduct business outside of it, and other franchisees can conduct business within it.