What portion of fees from each sale or lease transaction is allocated to advertising and other funds for Exit?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
mum and/or maximum prices at which Franchisees must sell services.
4. Advertising.
From the fees generated from each sale or lease transaction, a portion of the fees is allocated to advertising and to other funds. See ITEM 6 of this Disclosure Document and Section 7.6 of the Franchise Agreement.
Advertising. The advertising fees are allocated to the following Advertising Funds (the "Funds"): United States Creative Fund, United States Promotional Fund and Regional Development Fund.
The United States Creative Fund is used to create concepts and programming used for national and local advertising of EXIT. EXIT uses the creative fund to pay its employees and subcontractors for the advertising services that it provides.
The United States Promotional Fund is used to advertise and promote in radio, television, internet, newspaper, trade magazines and other advertising and promotion mediums.
The Regional Development Fund is used to purchase advertising services within the Region within which the Regional Development Fund fees are generated.
EXIT is not required to spend any amount on advertising in any particular area or Region, except the Regional Development Fund which is used solely for regional development in the Region in which the funds are generated. These funds are intended for the benefit of the EXIT name and the EXIT system, and not necessarily for the direct benefit of any specific franchisee, although it is anticipated that all Franchisees will benefit from increased awareness and visibility of the EXIT name and the EXIT system.
Source: Item 11 — FRANCHISOR'S AND SUBFRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–24)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a portion of the fees generated from each sale or lease transaction is allocated to advertising and other funds. The advertising fees are specifically allocated to the United States Creative Fund, the United States Promotional Fund, and the Regional Development Fund. The FDD does not specify the exact percentage or amount of fees allocated.
The United States Creative Fund is used for creating advertising concepts and programming for both national and local advertising efforts. Exit uses this fund to compensate its employees and subcontractors involved in providing advertising services. The United States Promotional Fund is used for advertising and promotion across various mediums such as radio, television, internet, newspapers, and trade magazines. The Regional Development Fund is designated for purchasing advertising services within the specific region where the fees are generated.
In addition to advertising funds, a portion of the fees is also allocated to two other funds: the United States Charitable Fund and the Administrative Fund. As of December 31, 2024, the Charitable Fund had a balance of $1,221,981.49, and it is used by Exit to make donations to selected U.S. charities. The Administrative Fund, with a balance of $232,307.93 as of the same date, is used to pay year-end bonuses to the support staff employed by franchisees.
For prospective franchisees, it's important to note that Exit is not obligated to spend any specific amount on advertising in any particular area or region, except for the Regional Development Fund, which is used solely for regional development in the region where the funds are generated. Franchisees should request the annual financial statements and an accounting of the Funds from Exit to understand how these funds are being managed and utilized. The FDD indicates that in the most recently concluded calendar year, Exit spent 11.87% of the Funds on production, 2.01% on media placement, 0% on administrative expenses, 57.5% on Exit's website and internet marketing, 16.43% on promotions, and 40.51% for regional development.