If an Exit franchisee fails to attain and retain the prescribed number of Sales Representatives, what section of the Franchise Agreement is relevant?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement. Your exclusive rights to a Protected Territory may be terminated or modified by EXIT Realty Upper Midwest if you fail to comply with the terms and conditions of the Franchise Agreement. In addition, the exclusive area rights will terminate, and you will be in default under your Franchise Agreement and your Franchise Agreement may be terminated, if you fail to attain and retain the prescribed number of Sales Representatives within the designated period of time. There are no other circumstances that permit EXIT Realty Upper Midwest to modify your territorial rights. The number of Sales Representatives to be maintained is based on the active Realtor® population in the geographic territory that includes the Protected Territory and based upon market conditions and area competition. There is no formula to determine the minimum number of Sales Representatives to be maintained in a Protected Territory. Once the location of the Protected Territory is determined and EXIT Realty Upper Midwest analyzes the active Realtor® population, market conditions and area competition in and around the Protected Territory, the minimum number of Sales Representatives is determined by EXIT Realty Upper Midwest and provided to you not less than 7 calendar days prior to your execution of the Franchise Agreement. See Section 9.8 of the Franchise Agreement. Subject to the foregoing Requirements for minimum number of Sales Representatives are as follows:
| Territory Size | Minimum # of Sales Representatives After 1st Year | Minimum # of Sales Representatives After 2nd Year | Minimum # of Sales Representatives After 3rd Year and Thereafter |
|---|---|---|---|
| Rural Density Territory | 3 | 5 | 7 |
| Low Density Territory | 5 | 7 | 10 |
| Medium | 6 | 12 | 20 |
| Density Territory | |||
| High Density Territory | 10 | 20 | 30 |
Source: Item 12 — TERRITORY (FDD pages 24–25)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Section 9.8 of the Franchise Agreement is relevant if an Exit franchisee fails to attain and retain the prescribed number of Sales Representatives within the designated period. If this occurs, the franchisee will be in default under their Franchise Agreement, and the Franchise Agreement may be terminated.
The required number of Sales Representatives is determined by Exit Realty Upper Midwest based on the active Realtor population in the geographic territory, market conditions, and area competition. This number is provided to the franchisee no less than 7 calendar days before they sign the Franchise Agreement.
The minimum number of sales representatives required varies depending on the territory size. For example, in a Rural Density Territory, the minimum number of sales representatives required is 3 after the first year, 5 after the second year, and 7 after the third year and thereafter. In a High Density Territory, the minimum number of sales representatives required is 10 after the first year, 20 after the second year, and 30 after the third year and thereafter.
This requirement is a critical aspect of the franchise agreement, as failure to meet these minimums can lead to termination of the agreement and loss of the exclusive territory rights. Prospective franchisees should carefully consider their ability to recruit and retain the required number of sales representatives before entering into a Franchise Agreement with Exit.