What was the long-term portion of Exit's notes receivable in 2022?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Total notes receivable | $ 9,011,701 | $ 9,761,196 | $ 13,194,836 |
| Less: current portion | 1,409,859 | 1,056,201 | 1,355,483 |
| Long-term | $ 7,601,842 | $ 8,704,995 | $ 11,839,353 |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the long-term portion of the company's notes receivable in 2022 was $11,839,353. Notes receivable represent balances due to Exit on the sale of Canadian and U.S. regions from sub-franchisors. These notes are a crucial asset for Exit, reflecting the financial arrangements made when granting development rights to sub-franchisors. These sub-franchisors are responsible for finding and securing franchisees to open Exit Realty offices. The notes receivable are secured by performance contracts within the franchise agreements.
The notes bear interest between 3.00% and 10.00%, and they mature between 2024 and 2033. The long-term portion of these notes represents the amount not expected to be collected within the next year, indicating a longer repayment schedule from the sub-franchisors. The notes receivable are secured by performance contracts in the franchisor agreements, which provides Exit with a degree of financial security.
For a prospective franchisee, understanding the nature and management of these notes receivable is important. It provides insight into Exit's financial dealings with its sub-franchisors and the overall financial health of the franchise system. The fact that Exit tracks and reports on both the total, current, and long-term portions of these notes suggests a level of financial diligence that may be reassuring to potential franchisees.