During what period must an Exit franchisee allow other Exit affiliates to solicit their sales representatives?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
- (K) Franchisee shall allow other EXIT Affiliates to solicit Franchisee's Sales Representative for transfer to other operating EXIT offices.
During the ten (10)-day period prior to termination or non-renewal of this Agreement, immediately upon the termination or non-renewal becoming effective and continuing thereafter, Franchisee shall allow other EXIT affiliates to solicit Franchisee's Sales Representatives for transfer to other operating EXIT offices.
Franchisee shall assist in effectuating such transfers and shall permit and facilitate the assignment of the Sales Representatives' listings and pending transactions to the EXIT Affiliate as the Sales Representative's new broker.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, an Exit franchisee must allow other Exit affiliates to solicit their sales representatives during a specific period related to the termination or non-renewal of the franchise agreement. This period includes the ten days leading up to the termination or non-renewal date, immediately upon the termination or non-renewal becoming effective, and continuing thereafter.
This requirement means that as an Exit franchise agreement nears its end, or upon its actual termination, other Exit offices have the right to actively recruit the franchisee's sales representatives. The franchisee is not only required to allow this solicitation but also to assist in the transfer process. This assistance includes facilitating the assignment of the sales representatives' listings and pending transactions to the new Exit broker.
This provision could significantly impact an Exit franchisee whose agreement is ending, as it allows other affiliates to potentially poach their sales team and ongoing business. Prospective franchisees should consider the implications of this clause, especially if they plan to eventually sell or not renew their franchise, as it could affect the value of their business and the stability of their sales team during and after the transition period. Understanding the dynamics of sales representative recruitment and retention within the Exit system is crucial for managing this risk.