How much did Exit receive in assignment fees in 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
e to be issued, the Company continues to sell franchises, and is generating franchise commissions revenues from open and operating franchisees. The Company believes that the combination of the actions taken, along with the decrease in interest rates that are projected to induce housing market stimulation, will enable the Company to meet its funding requirements for one year from the date these financial statements were available to be issued. If necessary, stockholders of the Company intend to provide any financial assistance needed by the Company should its cash flows from operations combined with its cash balances no
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the company received $8,625 in assignment fees during 2023. This figure is part of a table summarizing changes in deferred revenues. Assignment fees are generated when a franchisee transfers their rights or obligations, or ownership interests, to another franchisee. The revenue is recognized when the transfer is complete and Exit has met its obligations under the agreement.
For a prospective Exit franchisee, this indicates that assignment fees are a relatively small source of revenue compared to initial franchise fees and renewal fees. In 2023, initial franchise fees received were $33,750 and renewal fees were $19,500, both exceeding the assignment fees. This suggests that the majority of Exit's revenue comes from establishing new franchises and renewing existing ones, rather than from the transfer of existing franchises.
The table also provides a broader financial context, showing deferred revenues at the beginning and end of the year, as well as revenue recognized during the year and any amounts deemed uncollectible. This information can be useful for understanding the overall financial health and revenue recognition practices of Exit. The reduction for amounts deemed uncollectible in 2023 was $10,100, which is more than the assignment fees received, indicating that Exit does face some challenges in collecting all of its receivables.
Overall, the assignment fee income provides a glimpse into the secondary market activity within the Exit franchise system. While not a primary revenue driver, it reflects the transfer of franchise rights and ownership, and the associated fees contribute to Exit's overall financial performance.