What was the net income (loss) for Exit in 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Revenue | $ 15,421,227 | $ 15,991,792 | $ 17,858,393 |
| Operating expenses | |||
| Advertising and promotion | 2,335,585 | 2,858,751 | 2,880,073 |
| Amortization and depreciation | 65,563 | 92,338 | 125,888 |
| Ancillary expenses | 155,129 | 159,378 | 209,692 |
| Credit loss (recovery) expense | 351,755 | 1,304,738 | 382,936 |
| Bank charges | 261,316 | 246,186 | 234,654 |
| Commissions | 68,380 | 198,365 | 111,540 |
| Contract services | 951,910 | 883,805 | 972,546 |
| Fees and dues | 27,450 | 30,231 | 33,494 |
| Information technology | 504,587 | 519,057 | 470,750 |
| Insurance | 158,867 | 146,300 | 97,700 |
| Office and general | 83,168 | 64,051 | 83,463 |
| Postage and delivery | 50,372 | 77,943 | 102,833 |
| Professional fees | 921,810 | 512,417 | 334,687 |
| Rent | 302,011 | 305,396 | 293,000 |
| Repairs and maintenance | - | 2,787 | 8,364 |
| Salaries and benefits | 7,692,843 | 7,205,125 | 7,900,241 |
| Telephone | 18,920 | 25,306 | 26,585 |
| Trade shows and conventions | 1,778,283 | 2,020,763 | 2,845,425 |
| Training and development | 712,731 | 1,078,879 | 1,452,332 |
| Travel | 87,949 | 147,007 | 136,233 |
| Vehicles | 7,335 | 5,902 | 7,405 |
| Miscellaneous | 36,710 | - | - |
| Total operating expenses | 16,572,674 | 17,884,725 | 18,709,841 |
| Loss from operations | (1,151,447) | (1,892,933) | (851,448) |
| Other income (expense) | |||
| Gain on sale of property and equipment | 2,125,033 | - | 20,291 |
| Impairment of digital assets | - | - | (1,820,185) |
| Legal settlement | (1,500,000) | - | - |
| Interest | 137,304 | 78,187 | 170,816 |
| Total other income (expense) | 762,337 | 78,187 | (1,629,078) |
| Loss before provision for income taxes and non-controlling | |||
| interests | (389,110) | (1,814,746) | (2,480,526) |
| Benefit for income taxes | (459, |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the net income (loss) for the company in 2023 was ($1,327,749). This figure is part of the consolidated statements of operations and comprehensive loss. It is important to note that this loss occurred within a period where the company also faced challenges such as negative working capital and accumulated stockholders' deficits, as detailed in the notes to the financial statements.
For a prospective franchisee, this substantial net loss in 2023 indicates potential financial instability or significant investment in growth initiatives that had not yet yielded profits. It is crucial to understand the reasons behind this loss, such as increased operating expenses or decreased revenue, by examining the detailed statements of operations. Additionally, the FDD notes that the company restated its 2023 financial statements due to incorrectly accounting for receivables related to advertising costs, which further emphasizes the need for careful scrutiny of the financial reporting practices.
It is also important to consider the adjustments made to reconcile the net loss to net cash, including items like amortization and depreciation, credit loss expenses, and deferred tax expenses. These adjustments provide a clearer picture of the actual cash flow situation of Exit during that year. The document also mentions that the company applied for and received reimbursements from Exit Realty Corp. International for advertising costs, which are netted against advertising costs in the statements of income (loss).
Given these factors, a potential franchisee should conduct thorough due diligence, including consulting with a financial advisor, to assess the long-term financial viability of Exit. Understanding the context of the 2023 net loss within the broader financial performance and strategic decisions of the company is essential for making an informed investment decision.