What is the initial franchise fee for a medium density Exit franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
to Financial Statements December 31, 2024, 2023, and 2022**
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
Business description
Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest, located in Lakeville, Minnesota, is registered as a sub-franchisor of Exit Realty Corp. International and has purchased the rights to sell Exit Realty Franchises and operate in the states of Minnesota, North Dakota, South Dakota, Iowa, Wisconsin, Michigan, Illinois, Colorado, Indiana, Kansas, Missouri, Nebraska, and Wyoming. The franchises were granted by Exit Realty Corp. International and expire in 2033. The sub-franchisor agreements can be
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the initial franchise fee for a medium density franchise is $15,000. This fee is nonrefundable and must be paid upon the execution of the franchise agreement. The payment grants the franchisee no rights regarding other licenses, franchises, or additions to the protected territory. No rights or privileges under the agreement exist until the initial fee is paid.
This initial fee is a standard practice in franchising, serving to compensate Exit for the grant of the franchise and the initial services provided to the franchisee. These services typically include training, site selection assistance, and access to Exit's brand, systems, and proprietary information. The fee is recognized as revenue on a straight-line basis over the term of the franchise agreement.
For a prospective Exit franchisee, understanding the initial fee is crucial for financial planning. The franchisee should also inquire about what specific services and support are included in exchange for the initial fee. Additionally, it's important to note that this fee is separate from other potential costs, such as ongoing royalty fees, training expenses, and other operational costs.