If a portion of the commission is payable to another Sales Representative for an Exit transaction, what information must be submitted to the Franchise and when?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
13. The EXIT Referral System
- a) It is recommended that the Commission split for EXIT referrals remain uniform. The standard rate of Commission to be paid for an EXIT listing referral is 40% of the listing Commission received. The standard rate of Commission to be paid for an EXIT buyer referral is 25% of the selling Commission received. All referrals must be confirmed in writing on documentation supplied or approved by EXIT.
- b) Should a transaction be a referral whereby a portion of the Commission is payable on closing to another Sales Representative, then all pertinent data must be submitted to the Franchise prior to the finalization of the Transaction Record Sheet.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a transaction involves a referral where a portion of the commission is payable to another Sales Representative upon closing, all pertinent data must be submitted to the Exit franchise. This submission must occur before the Transaction Record Sheet is finalized.
This requirement ensures that Exit has a clear record of all commission splits and referral arrangements. By mandating the submission of pertinent data before finalizing the Transaction Record Sheet, Exit aims to maintain accurate financial records and ensure proper commission disbursement. This also helps in resolving any potential disputes related to commission sharing.
For a prospective Exit franchisee, this means they need to establish a system for collecting and submitting all relevant data related to commission splits whenever a referral arrangement exists. This includes details about the other Sales Representative involved and the agreed-upon commission percentage. Failing to comply with this requirement could lead to delays in finalizing transactions or potential disputes with Exit regarding commission payments.