What obligations does an Exit franchisee have regarding pre-opening purchases (Item 9) and how are these affected by restrictions on suppliers (Item 8)?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in Franchise Agreement | ITEM in Disclosure Document |
|---|---|---|
| b. Pre-opening Purchases/Leases | 3 | 5, 6, 7 |
You must purchase all stationery, merchandising material and/or anything else that is utilized by you that contains EXIT's logo and/or Marks from EXIT's Approved Suppliers or Suppliers that sign a Confidentiality and License Agreement with EXIT. EXIT, through its Affiliate, Ah$um America, Inc., maintains a list of Approved Suppliers. If you wish to have a supplier designated as "Approved," you may submit information about the supplier and its relevant products or services to Ah$um America, Inc. for review. Ah$um America, Inc. will not unreasonably withhold its approval of any supplier that meets the quality standards set forth in the EXIT Training Manual and agrees to sign Ah$um America, Inc.'s then current Terms and Conditions document for Approved Suppliers. Ah$um America, Inc. will notify you of its decision within 60 days of your submission. Ah$um America, Inc. reserves the right to re-inspect the products or services of any Approved Supplier and revoke its approval if the service or product fails to meet the quality standards set forth in the EXIT Training Manual. Ah$um America, Inc. will send written notice of any revocation to the Approved Supplier. Ah$um America does not impose a fee or cost for Supplier approval.
EXIT is the only approved supplier for certain computer software for the Franchise report system known as MEMO. You must purchase a compatible computer for the Franchise MEMO system. The computer requirements are described in ITEM 11. The MEMO system has been developed and will be licensed by EXIT to you. There is no initial cost for the system. You must pay a monthly license fee of $250.00. If you own more than 1 EXIT Franchise, and those are operated by the same legal entity and use the same trade name, the monthly license fee for the second and subsequent Franchise Agreements shall be reduced to 25% of the monthly license fee charged at the time the subsequent Franchise Agreement(s) is signed.
We estimate that the required purchases described above are 3.0% to 12.0% of the cost to establish and operate the EXIT Franchise (this includes the exterior sign(s), office supplies, yard signs and MEMO fees).
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees have obligations regarding pre-opening purchases/leases as detailed in Section 3 of the Franchise Agreement and Items 5, 6, and 7 of the disclosure document. Item 8 outlines restrictions on sources of products and services, stating that franchisees must purchase stationery, merchandising material, and anything with Exit's logo from approved suppliers or suppliers who sign a Confidentiality and License Agreement with Exit.
Exit, through its affiliate Ah$um America, Inc., maintains a list of approved suppliers. Franchisees can submit information about potential suppliers to Ah$um America, Inc. for review, and approval will not be unreasonably withheld if the supplier meets Exit's quality standards and agrees to the terms and conditions. Ah$um America, Inc. will notify the franchisee of its decision within 60 days of submission. Ah$um America, Inc. can re-inspect and revoke approval if a supplier's products or services fail to meet quality standards, providing written notice of any revocation.
Exit is the only approved supplier for certain computer software for the Franchise report system known as MEMO. Franchisees must purchase a compatible computer for the Franchise MEMO system, with computer requirements described in Item 11. There is no initial cost for the MEMO system, but franchisees must pay a monthly license fee of $250.00. If a franchisee owns more than one Exit franchise operated by the same legal entity and using the same trade name, the monthly license fee for the second and subsequent Franchise Agreements will be reduced to 25% of the monthly license fee charged at the time the subsequent Franchise Agreement(s) is signed. The FDD estimates that these required purchases are 3.0% to 12.0% of the cost to establish and operate the Exit Franchise, including exterior signs, office supplies, yard signs, and MEMO fees.